Forecast Fundamentals

Arkansans’ income figures stagnant

when compared with national average

Charles Venus recently dared utter the dreaded word “recession” in front of a Northwest Arkansas audience.

But then, he explained, it was self-protection.

If he’s wrong, Venus explained, the audience won’t want to hear from him in another year. And if he’s right, they certainly won’t want to hear from him again.

It’s doubtful he’s right on that point because the audience seemed to enjoy Venus’ comments about his adopted state. An Arkansas economist who’s lived in the state since 1956, Venus spoke to 650 people who attended the Business Forecast 2000 on Feb. 18. The event has been sponsored annually by the University of Arkansas’ Sam M. Walton College of Business Administration since 1995.

Arkansas, Venus said, made wonderful strides in improving its per-capita income compared to the national average between 1956 and 1978. The state’s per capita income was about 60 percent of the national average back in 1956. At that point, the state’s economy was largely agricultural, and agricultural jobs typically pay about 60 percent of the national per-capita income average, he explained.

As manufacturing became a more important part of the Arkansas economy, the per capita income rose by 1978 to nearly 80 percent of the national average, remarkable progress, Venus said. That, too, was to be expected since manufacturing jobs pay better than agricultural jobs.

But that’s where the state’s progress peaked. In the 22 years since, the state per-capita income has stagnated and even lost ground as compared to the national average, Venus said. States that have been more successful at increasing wages turned to the services sector earlier than Arkansas did.

He made it even more interesting by indicating the terms of the people who have served as governor and the progress (or lack thereof) on each.

“The biggest loser got out just in time and became president,” he quipped.

That may be a bit of hyperbole since much of the rebound the state has experienced in the past 22 years also happened on Bill Clinton’s watch, according to Venus’ chart. But the longest stretch of growth seems to have begun during the Winthrop Rockefeller years and then continued into Dale Bumpers’ early term.

Help people or state?

Venus likes to talk about a section of Arkansas highway between Brinkley and Helena. It’s where Interstate 49 and Arkansas 1 join. The signs and map say Interstate 49 is heading south at that point. Arkansas 1 is headed north. Thus, one can travel north and south at the same time, he says. But check out the compass direction and you’re really heading due east.

The sentiment behind commonly heard admonishments to help the state may be similarly direction-less.

Venus suggested that the Delta, for example, will do just fine. Any place where the top soil measures 70 feet deep is bound to fare well.

More important to consider, he said, are the people who live in the state and how they fare.

The heirs of the plantation owners are all doing just fine, he says. They’re doctors, lawyers, dentists, engineers — and they’re all living in Little Rock.

And there are other large groups of Arkansans, each of them earning above the national average and doing well for themselves. But they’re living in Dallas and Houston and Chicago, Venus said.