By Byron Schlomach, Ph.D.
First the bad news: Arizona’s per capita personal income is eleventh lowest among the states and is 14 percent lower than the national average. But there’s also good news: In the past, Arizona’s per capita income has been closer to the national average and there is no reason it cannot be again.
The chart below compares Arizona’s per capita income to the national average. Arizona’s relatively modest-sized population explains much of the big fluctuations that occur right into the 1990s since any change in large employers could be significantly reflected in the statistics. Another likely explanation is national defense spending. The big blip in 1941 coincides with the buildup to World War II. The next peak in 1952 coincides with Korea. The big rise in the 1960s coincides with Vietnam. During wars, both hot and cold, Arizona’s per capita personal income performed relatively well because we have a decent base of defense industry jobs. The last big drop in Arizona’s personal income occurred with the end of the Reagan defense buildup and the end of the Cold War. Arizona’s personal income then stabilized and we did not see another spike in personal income until the housing bubble.
(Full size chart available here.) There are a couple of lessons that can be learned from this chart. One is that Arizona must look to itself for increased prosperity, not uncertain federal defense spending or money from big banks taking advantage of federal housing programs, or any other government program at any level – federal, state, or local. Another lesson is that Arizonans cannot presently afford the expansive government programs and projects some other states can afford because our incomes won’t support them.
Arizona need not be doomed to always lag the nation in per capita personal income. If we get the basics right – good roads, sound property rights, little red tape, lean and efficient government – Arizonans’ creativity, willingness to take risks, and hard work will make our state the best that it can possibly be.
Dr. Byron Schlomach is the director of the Goldwater Institute’s Center for Economic Prosperity.
Learn more:
Goldwater Institute: Delivering an Anti-Poverty Revolution
Goldwater Institute: How to Win the War on Poverty: An Analysis of State Poverty Trends
Federal Reserve: Changes in U.S. Family Finances from 2007 to 2010 (PDF)
The big problem is education. Silicon valley got it right. We need to increase spending on science and engineering, and create the environment that silicon valley has. Our legislature is composed of half wits who are fearful of an educated populace. They want to cut spending on education, and increase funding for private prisons. Our governor is an idiot. Our Sherrif is a publicity obsessed fool. Our Attorney General is banned for life from trading securities, due to past indiscretions.
We need to kick the lobbyists out of the Capitol, and kick those that put corporate interests before those of their constituents out as well. And we need to start electing intelligent, hard working, honest, moral, responsible and accountable people to public office.
Schlomach is right. I agree – we suck really bad, and have few excuses, but if we believe in ourselves and try really hard, we can make our state the best that it can possibly be… and then monkeys will fly out of his butt. What kind of suck ass plan is that? What a bunch of hooeey. Sounds like he is the master strategist for the Arizona Commerce Authority.
and Bill. What kind of drugged out psycho are you? this is Arizona. We used to run rational people like you out of town. Honest? Moral? Responsible? You obviously have never been anywhere near the elected leaders in AZ.
This is per capita income. Here in Arizona we have a larger portion of young people than in the nation as a whole. 28.4% are under the age of 20 versus 26.9% for the US. We also have a larger portion of the 65 plus crowd – 13.8% versus 13.1%.
Given those demographics, we should have a lower per capita personal income than the US as a whole.
Correct your numbers for demographics and then let’s talk about what to do.
Byron – Great article! I always look forward to seeing the release of your studies. Keep it up my man!