PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

High-Burden States Experiencing Slowest Personal Income Growth

By at 25 June, 2019, 5:28 pm

by Raymond J. Keating-

According to the latest report from U.S. Bureau of Economic Analysis, state personal income growth slowed in the first quarter of this year – from 4.4 percent (annualized) in the third quarter 2018, to 4.1 percent in the fourth quarter, and to 3.4 percent in first quarter 2019.

The slowdown is worth keeping an eye on, but from quarter to quarter the data can be volatile.

It’s worth noting that in terms of individual states, most of those suffering the slowest rates of personal income growth over the past year happen to also rank among the states facing considerable burdens on entrepreneurship, small businesses and investment.

SBE Council’s “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth” ranks the 50 states according to 62 different policy measures, including assorted tax, regulatory and government spending measures. Among the 10 slowest growth states in terms of personal income, nine ranked in the lower half of states on the Index, and eight ranked among the bottom 16 on the Index. (See the following table.)

Bottom 10 States in Personal Income Growth

  States

Personal Income Growth Rate, 2018Q1 to 2019Q1

SBPI Ranking

 

41     Michigan 2.99 14
42     New Jersey 2.98 50
43     Hawaii 2.94 48
44     Illinois 2.91 35
45     Maryland 2.87 40
46     Massachusetts 2.58 38
47     New York 2.43 47
48     Connecticut 2.40 44
49     Rhode Island 2.12 39
50     New Hampshire 2.03 27

 

Economic and income growth are restrained due to excessive burdens places on the entrepreneurial sector of our economy. One of the best ways to boost income growth is to rein in the burdens of government.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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