Where You Live Is Important

BRad Edmundson

In this feature from the latest PLMALive! Brad Edmondson breaks down the household income and its variance state to state.

Where You Live Is Important

The income figures for 2014 are out, and they show the median income for households in the United States is $53,647. Now that number is not statistically different from 2013, but if you look below the surface, you’ll see a lot of changes.  State-level income estimates show that some parts of the country are doing great, while other states still haven’t recovered from the Great Recession.

We looked at changes in median household income for each state between 2013 and 2014, adjusted for inflation, and then we looked at how each state did in the seven-year stretch from 2007 to 2013, when median household income declined almost everywhere.  Here’s what we found.

The twelve states in red are two-time losers, where income declined between 2007 and 2013, and then kept declining in the last year.  The map shows that six years after the recession officially ended, the incomes in a lot of households in the Deep South are still headed down. But in some red states, the news is actually improving. Median household income in Nevada declined 18 percent between 2007 and 2013, and that was the worst loss of any state.  But last year’s decline was only 2 percent. So even though working people in the Silver State are still losing ground, the economy there looks like it might be turning around.

The picture is a lot darker in Rhode Island, where household income dropped 4 percent last year after a 10 percent decline over the last seven years.  With high taxes, a crumbling infrastructure, and not much political clout, it’s going to take a while for this red dot to change color.

Median household incomes were unchanged in the 13 pink states last year. This group includes Illinois, the fifth most populated state in the country; Pennsylvania, which is number six; and New Jersey, number 11. Most of the two-time loser states in bright red have smaller populations.  If you add these two groups together, there are 25 states and they are home to one-third of Americans. In other words, one-third of Americans are still waiting for the economy to recover.

Most Americans live in the green states, where median household income did increase in 2014. This is good news, although in the biggest states —California, Texas, Florida, New York, Ohio, and Georgia —the increase was a tiny one percent.

The turnaround states fall into two subcategories.  Some of them have seen dramatic improvements, like Arizona, where incomes declined 12 percent between 2007 and 2013 before rebounding last year.  Indiana, Michigan, Florida, Georgia, and California have also enjoyed big rebounds.  But there are also bystander states.  The recession was comparatively mild in some western states, like Washington and Colorado. It also never really hurt the urban northeast, so Virginia, New York, and Massachusetts never crashed in the first place.

And there are some places where the recession simply did not happen.

In the Dakotas, median household income did not decline at all during the recession. The Dakotas are the epicenter of a boom in drilling for oil and a lot of their drilling equipment came from Oklahoma. The story is different in Iowa.  Iowa avoided the housing crash because its banks never took big risks, and also because that state bounced back quickly with job gains in agriculture and skilled manufacturing.

On the other hand, the four best-performing states account for just 3 percent of the US population.  There is one other place where incomes are doing just great, and that is Washington D.C.  where incomes increased 4 percent last year after rising 16 percent during the recession years of 2007 to 2013.  If you want to understand why so many Americans are mad at the federal government, this number might be a good place to start.

 



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Christopher Durham

Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan).

Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s.
Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago.

Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.