Monday, September 24, 2007

EDITORIALS>>Still down and out

“Arkansas 8th in U.S. in growth of income” trumpeted the headline above the fold of the Friday edition of the Arkansas Democrat Gazette. A few more such hopeful news items and Arkansas people may feel good about themselves even if the football Razorbacks continue to lose, notwithstanding the University of Arkansas chancellor’s formula for maintaining the self-esteem of Arkansas people. It hinges on winning Razorback teams, he said. Alas, people must not read the news too closely or critically. These headlines have been appearing with some regularity in the public prints for at least 50 years. The aggregate and per-capita rate of growth in personal income in Arkansas is greater than the national average and for short periods its growth percentage ranks among the highest in the United States.

There is a caveat: that word percentage. In the second quarter of the year, personal income in Arkansas grew by 1.6 percent, compared with only 1.2 percent for the nation as a whole. Every couple of years since the Commerce Department began publishing the income and gross domestic product figures by states, Arkansas newspapers have picked up on a higher growth rate for the state. The state Chamber of Commerce often forecast future parity with the rest of the nation as the trend continued.

In fact, rather than catching up, the state was often falling farther behind. If you start with a very low base even a small dollar increase in per-capita income from one year or quarter to the next can loom large compared with the growth in a state with a much higher base, like Connecticut, even though growth in the other state might have been more robust. The chamber finally caught on and no longer calls attention to the encouraging percentages.

Arkansas’s per-capita personal income is about 75 percent of the national average, slightly less than it was three years ago. Each year, Arkansas is either 47th or 48th among the states in per-capita income, just about where it was 50 years ago. Its per-capita income growth has exceeded the national average, percentagewise, most years since 1981. But Arkansas was about $2,500 behind the national average that year and now it is about $8,000 behind. So there is not much to cheer about, except that the agricultural sector is making a little more headway than in much of the country, accounting for much of the quarterly gain.

The chancellor may be right about us. We need the Razorbacks. Go Hogs. Beat Kentucky.