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Arkansas Improves Economic Ranking (Greg Kaza Commentary)

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Two decades into the 21st century, it’s clear Arkansas’ national economic ranking has changed in a fundamental way.

Consider two broad economic metrics: income and employment.

For much of the 20th century, Arkansas ranked 48th or 49th in per capita personal income, calculated by dividing total income by a state’s population. Arkansas was second- or third-lowest among states for 64 of 71 years dating to 1929, according to U.S. Bureau of Economic Analysis records.

Some observers opined the state’s unofficial motto was “Thank God for Mississippi,” the only state to trail Arkansas every year in that period.

A different picture has emerged this century. To understand how far Arkansas has traveled on the income front, consider the following: The state’s income was 36.1% of the national average (1930), did not reach 50% until World War II (1942) and did not exceed 60% until 1955, the year Winthrop Rockefeller was named chairman of the Arkansas Industrial Development Commission.

In 1971, Arkansas income exceeded 70 percent for the first time but it took another 41 years (2012) to reach 80 percent.

Yet in the last decade, Arkansas ranked as high as 41st. For the last four years, Arkansas has ranked 45th in the U.S. in per capita personal income, a first.

A major source of progress are the four counties that recorded income levels above the state average nearly every year in the last decade: Benton, Pulaski, Union and Arkansas.

These counties accounted for more than one-third of Arkansas’ total personal income in 2018.

Five of Arkansas’ best-known publicly traded companies are based in three of these counties: Walmart, Tyson Foods, J.B. Hunt, Dillard’s and Murphy USA.

Employment presents another example of Arkansas’ improvement in economic ranking.

Arkansas’ job creation rate topped 21 states in the national expansion that started in June 2009 and ended earlier this year in February, U.S. Bureau of Labor Statistics records show.

Arkansas’ 10.4% growth rate in the period topped the following states: Alabama, Alaska, Connecticut, Illinois, Iowa, Kansas, Louisiana, Maine, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Vermont, Wisconsin, West Virginia and Wyoming.

In the first economic expansion of the 21st century (November 2001 to December 2007), Arkansas’ jobs creation rate topped 22 states, according to research by Dylan Saettele, an analyst with our nonprofit’s Post-Millennial Project.

These were Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, and Wisconsin.

These employment rankings are a country mile from near-worst (49th place) in the nation.

Policymakers continue to address factors including tax rates, an education system that produces a skilled workforce, infrastructure and efficient, transparent government.

Others are likely to emerge.

Arkansas clearly has the potential to further advance its national economic ranking.


Economist Greg Kaza is executive director of the Arkansas Policy Foundation, a Little Rock think tank founded in 1995.
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