A national snapshot of income growth among states in USA Today this week shows Maine growing ahead of the national average since 2000, though it continues to trail in per-capita income. While far from a definitive work, the article’s list does show the economic picture is complicated and that the state should be careful what it wishes for.
Among other things, the story examines long-term growth – since 1980. As the Maine Heritage Policy Center pointed out, Maine’s growth has lagged the rest of New England, with the order descending from Massachusetts, New Hampshire, Connecticut and Vermont (tied), Rhode Island and Maine (tied).
The center’s point is that New Hampshire did so well because of its low tax burden. But Connecticut did nearly as well with a very high tax burden, and Massachusetts has done better than both with a burden that has been above and below average. Since 2000, Maine’s income growth has exceeded New Hampshire’s rate considerably despite its high taxes.
Some states aren’t faring especially well, and it’s worth noting that three of them are Georgia (35th in income; 49th in income growth since 2000), North Carolina (37th in income; 45th in growth) and South Carolina (43rd in income; 34th in growth). Well-intentioned pro-business groups spent a fair part of the late 1990s informing Maine it should be more like the Southeast by emphasizing low-regulation, lower-wage manufacturing as that region had.
The Southeast has multiple employment challenges beyond broad manufacturing loss, and its struggles are no reason to cheer. They are reason, however, to re-examine whether emulating that region will bring about prosperity here and the extent to which models from other states are useful, given the number of variables.
But if eliminating the tax burden and slicing work regulations don’t guarantee rising incomes, what might? The USA Today story has the answer – Virginia since 2000 has become one of the wealthiest states and one with the fastest-growing incomes.
How did it do it? “Record federal spending over the past five years has caused the Washington, D.C., suburbs in Northern Virginia to rank first in the nation in job creation,” says the article. A free-spending federal government to the rescue.
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