Sunday, August 31, 2014

Real Per Capita Income by State

John Hinderaker of Power Line posts the real per capita income for the 50 states and the District of Columbia, as calculated by the Bureau of Economic Analysis. Real per capita income is the total real personal income for that jurisdiction divided by its midyear 2012 population.

Any guesses which unit has the highest real per capita income? How about the District of Columbia? No? Well, you're wrong if you thought not. D.C.'s real per capita income is $59,759. Second comes the oil boom state of North Dakota with $57,367, third is NYC bedroom community Connecticut with $51,559. No other unit has a real per capita income greater than $50,000.

Believe it or not, fourth is our home state Wyoming with $49,587, just nosing out Massachusetts with $49,354 in fifth place. All of the numbers shown in Hinderaker's post are means (averages) and as such greatly affected by income inequalities. As he notes:
If we saw the same data using medians instead of averages, the Dakotas, Wyoming, Nebraska, etc. would look even better. The average person is remarkably better off in those states.
A median is that value above which 50% of people earn, and below which the other 50% earn; it is what Mr./Ms. Average earns.

Meanwhile, more than half the states have greater real per capita income than California, at $38,888. Remember, we divide total income by population. Having 1/3 of the nation's welfare caseload, plus a horde of illegal immigrants, pulls down CA's average as it increases the divisor.