‘Thank God for Mississippi’ or National Contender? What is your perception of Arkansas’ economy? Last week’s local personal income release from the U.S. Bureau of Economic Analysis is a powerful reminder of the economic progress Arkansas has achieved in the last decade.
Benton County – at 155.5% of the U.S. – ranked 35th among 3,113 counties nationwide in per capita personal income in 2016, according to data accompanying the BEA release. PCPI – personal income divided by population – is “a useful metric for making comparisons of the level of personal income across counties,” the federal bureau notes.
Here’s the significance of that news: income growth in Benton County, home of Wal-Mart Stores and J.B. Hunt, has driven Arkansas’ national income rank to historically high levels for five consecutive years. A ‘Thank God For Mississippi’ mindset overlooks this development.
Arkansas ranked 41st (2012), 43rd (2013), 42nd (2014), 43rd (2015) and 43rd (2016) in the U.S during that five-year period. That’s a country mile from the 48th place rank Arkansas held as recently as 2006 after decades of ‘Thank God for Mississippi’ reasoning.
Other regional states trailing Arkansas in income rank in 2016 are South Carolina, Alabama, Kentucky, West Virginia and Mississippi. In sum, Arkansas has moved from the bottom tier in the 12-state southeast region to the middle-range occupied by Louisiana, North Carolina and Georgia. Virginia, Florida and Tennessee lead the region.
Disposable (after-tax) income has also attained new heights, reaching 83% of the U.S. for five consecutive years. Lower taxes on groceries, capital and income have contributed to this development.
But a bigger factor has been the presence of public companies like Wal-Mart. It’s no coincidence that the three Arkansas counties (Benton, Pulaski, and Union) with the highest per capita income are also home to a majority of the state’s publicly-traded firms. Arkansas benefits from the dynamism of these home-grown companies in international markets.
The biggest challenge ahead: Improving Arkansas’ income rank so that it achieves 100% of the U.S. average, a feat achieved last year in only 20 states and the District of Columbia. Academics and business leaders have worked on solutions to this problem for more than a decade. Benton County is already a national contender, topping 98.9% of counties nationwide in last week’s BEA release. Only 19 states include counties with higher PCPI readings.
These also include all but five counties in the southeast region. Only Williamson County, Tenn.; three Virginia counties (Arlington, Goochland, Alexandria); and Collier County, Fla., recorded higher income readings than Benton County in 2016.
Another way to view last week’s release: Benton County PCPI is higher than the home counties of large American cities such as Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami and Philadelphia.
Arkansas’ future involves contending nationally on more economic fronts, not being grateful for avoiding last place.
Editor’s note: Greg Kaza is executive director of the Arkansas Policy Foundation, a think tank founded in 1995 in Little Rock.