The Long Way Up

2006: Louisiana had biggest jump in income per person

3/27/2007, 2:23 p.m. CT
By ALAN SAYRE The Associated Press

NEW ORLEANS (AP) — Louisiana recorded the nation's largest growth in per capita income in 2006, a gain coming from wage increases following hurricanes Katrina and Rita and the loss of 200,000 residents, many from lower-income ranges, the U.S. Commerce Department reported Tuesday.

The 25.5 percent increase last year follows a 9 percent drop in 2005, a year in which there was massive unemployment following the two storms, according to preliminary figures.
LSU economist Loren Scott said the figures provide evidence that the displaced population was predominantly low-income. And, he said the bump in wages provided by post-hurricane construction, infastructure repair and other projected construction projects should sustain the higher wages for anywhere from three to five years.

After that, sustaining the higher income provided by one-time construction projects will depend largely on the state's success in attracting new industry. "The state's recruiting efforts remain vital," he said.

In the meantime, even with the post-Katrina boost, the 2006 per capita income figure in Louisiana — $30,952 — only pushed the state from the bottom to 41st in the United States.
"The wide swing in its growth rate reflects the consequences of the property lost in the hurricanes and the state's subsequent recovery," the report said.

In addition to what the Commerce Department called solid wage gains, the agency also noted that many of the displaced Louisiana residents, who are now counted in the states where they relocated, were low income. The report did not quantify how much of the gain was due to higher pay — and how much could be attributed to poor residents leaving the state.
Connecticut had the highest per capita income in 2006 with $49,852 — 37 percent above the national average of $36,276. Mississippi had the lowest per capita income of all the states: $26,535, or 27 percent below the national average.

National per capita income grew 5.2 percent in 2006, up from 4.2 percent in 2005.
Michigan's per-capita income grew the slowest of all the states last year, at 3.1 percent, primarily because of employment cutbacks in the automobile industry that created waves in construction and real estate, the Commerce Department said.

Behind Louisiana in the bottom 10 were Montana, Idaho, New Mexico, South Carolina, Kentucky, Utah, Arkansas, West Virginia and Mississppi. The rest of the top 10 behind Connecticut were New Jersey, Massachusetts, Maryland, New York, Wyoming, New Hampshire, Colorado, Virginia and Delaware.

Factors that could keep wages up, Scott said, include the Army Corps of Engineers' plans to spend a billion dollars a year in Louisiana over the next four years as levee improvements are made. He also noted that repair and replacement of homes continues in south Louisiana and that there are plans for high-rise condominium developments in New Orleans, as well as the recently announced $3.2 billion expansion of the Marathon oil refinery in Garyville.

"There's a bunch of things that ought to keep the construction idustry strong for the next three to five years," Scott said.