Notes on a high-performing Delta county

by Greg Kaza ([email protected]) 626 views 

A long-standing goal of Arkansas policymakers has been achieving 100% income parity with the U.S. average. A release this week from the U.S. Bureau of Economic Analysis shows how far Arkansas has advanced, and the distance it still needs to travel to achieve that worthy goal.

During the Great Depression, Arkansas per capita personal income (PCPI) reached an all-time low, falling to 36.1% of the nation in 1930, according to the BEA. PCPI is calculated by dividing total personal income by population.

By World War II’s end Arkansas PCPI had reached 59.7% of the U.S.  An expansion of manufacturing activity lifted Arkansas PCPI from 61.6% (1955) to 76.3% (1974). Little progress occurred for a quarter-century, with Arkansas PCPI not reaching 79% until 2009. But it has exceeded 80% three times in the ensuing decade.

A decade ago Arkansas ranked 48th in the U.S. Today, “Thank God for Mississippi” is an anachronism. Arkansas ranked 45th in 2018, ahead of Alabama, Kentucky, New Mexico, West Virginia and Mississippi, according to this week’s BEA release.

An overlooked dimension of this story are the contributions made by individual Arkansas counties.,One example is Arkansas County, which ranked fourth (4th) in the state in PCPI in 2017, trailing only Benton, Pulaski and Union counties. Arkansas County has played an important, albeit overlooked role in the progress that has occurred in the past decade. The Delta-based county is one of Arkansas’ original counties with a commercial center in Stuttgart, about 45 miles southeast of Little Rock.

Arkansas County’s PCPI was $43,376, an amount greater than the state average ($41,046) and 71 other counties.  The county recorded personal income of nearly $780 million with a population of 17,967 that ranked 40th in the state. Arkansas’ top three counties were Benton ($81,533), Pulaski ($48,838) and Union ($43,836).

PCPI can also be analyzed as a percentage of the U.S. average. Arkansas County improved from 76.1% of the U.S. at the dawn of the 21st century to 84% (2017). Other top counties were Benton (157.9%), Pulaski (94.6%), and Union (84.9%).

Counties can also be compared to the state total. Arkansas County has exceeded 100% of the state average in the last decade, and registered 105.7% in 2017, the most recent year that data is available.

One popular narrative holds that economic growth has shifted away from Arkansas’ 15 Delta counties. Indeed, no other Delta county ranks in the state’s top 10 in terms of PCPI. So why is Arkansas County an anomaly?

An important contributing factor is manufacturing including non-durable food production. First, manufacturing jobs tend to generate bigger paychecks. A higher percentage of Arkansas County employees (37%) worked in manufacturing than the state average (13%) in 2017, U.S. Bureau of Labor Statistics records show. They also tended to be paid more than their statewide counterparts.

Second, Arkansas County’s manufacturing sector contributed a higher percentage of total earnings than the state average, BEA records show.

Finally, a non-manufacturing factor: net earnings for all Arkansas County industry sectors were greater (62%) than the state average (54%) and near the U.S. norm (63%), BEA records show.

Policymakers should not overlook Arkansas County’s contribution in a state where only a handful of counties have achieved or approached 100% parity with the U.S. in the 21st century.

Editor’s note: Greg Kaza is executive director of the Arkansas Policy Foundation, a think tank founded in 1995 in Little Rock. Opinions expressed are those of the author.