Graphed below are the ten states with the highest income per capita, and the ten with the lowest. At the top is an entity that technically isn’t a state, the nation’s capital. If it were a state, it would be the third smallest, behind Wyoming, also in the top ten, and Vermont.
The richer states of the northeast are heavily represented, as are two energy-rich states, Wyoming and Alaska. At the bottom are mostly southern and interior western states. DC has a per capita income more than twice the poorest state, Mississippi.
There is also substantial variations in how the states have done in the last decade. The next two graphs show the growth in per capita income between the most recent business cycle peak, 2007Q$, and the previous one, 2001Q1.
Between the 2007 peak and the end of 2013, by far the fastest growing state has been North Dakota, riding an energy boom. There are a few other energy states in the top ten. It’s not surprising to see the three housing bust states at the bottom of the list: incredibly, Nevada’s per capita income is almost 5% below where it was when the Great Recession hit.
What’s striking about the longer term rankings is the even greater role of mining and other natural resource extraction in the big gainers. Seven of the top 10 gainers were heavy mining states, defined as having a mining share of total income more than twice the national average. North Dakota’s gain was close to five times that of the weakest state, Nevada.
But for all the economic changes, the rankings have remained remarkably stable. The correlation coefficient between the states’ income rankings in 2001 and 2013 was a rather high 0.83, and almost all the mobility came from the outperformance of the mining states. Of the ten richest states in 2001, 7 were still there in 2013. California, Colorado and Illinois fell out, to be replaced by Alaska, North Dakota, and Wyoming. Of the 10 poorest 2001 states, 8 were still there 12 years later, Energy-rich Louisiana and Montana fell off, replaced by Idaho, despite it’s growth in tech, and housing-bust Arizona.
Income mobility over time is generally lower than most people realize; the same is apparently true of states, unless you are sitting on generous deposits of carbon.