# Presentation: 725689

## Who's Making All That $$$$?
An Analysis of Income Trends in Minnesota

**An Analysis of Income Trends in Minnesota**

- Barbara J. Ronningen
- Minnesota State Demographic Center

- March 29, 2005

##  Where Does MN Stand?
How Do Counties Compare?

**How Do Counties Compare?**

- Change over 10-year period (1993 to 2003 for state, 1992 to 2002 for counties)
- Change since last year (annual data is posted on website, analytical report every other year on average)
- Trends in components of income - earnings asset, transfer payment and farm income
- Trends in wages and disposable income

## BEA DATA:
Personal Income Trends 1993 - 2003

**Personal Income Trends 1993 - 2003**

- Minnesota's per capita income was $34,443 in 2003
- Minnesota's per capita income ranked 8th nationwide in 2003
- Per capita income in Minnesota grew 25.4% between 1993 and 2003
- Income growth was the 5th highest between 1993 and 2003
- Income growth in this decade slowed but ranked 11th for 2002-2003

## Slide 4

**Notes:**
Only 7 states - all in the northeast or mid-Atlantic regions - have per capita income higher than Minnesota!
District of Columbia  48342
Connecticut 43173
New Jersey 40427
Massachusetts 39815
Maryland 37331
New York 36574
New Hampshire 34702

Wisconsin	30898
South Dakota 29234
North Dakota 29204
Iowa 29043

## Disposable income is personal income less personal current taxes.
Minnesota ranks 10th nationally.

**Disposable income is personal income less personal current taxes.**
**Minnesota ranks 10th nationally.**

## Disposable income grew fastest in North Dakota, Wyoming and South Dakota.
Minnesota ranked 4th nationally.

**Disposable income grew fastest in North Dakota, Wyoming and South Dakota.**
**Minnesota ranked 4th nationally.**

## Minnesota Income Grew Faster than U.S.
1969 to 2003 (adjusted for inflation)
Source: Bureau of Economic Analysis

**1969 to 2003 (adjusted for inflation)**
**Source: Bureau of Economic Analysis**

**Notes:**
Per capita personal income in Minnesota paralleled per capita income nationally throughout the 1970s and 1980s, but since 1993, growth in Minnesota's income has outpaced the national average. Per capita income which ranked 18th in 1993 ranked 8th in 2003 

## 25.4%

**25.4%**

**29.9%**

**29.3%**

**25.9%**

**D.C.**
**26.9%**

**24.2%**

**24.5%**

**Notes:**
MN was fifth in growth; top 7 states were:

North Dakota
Wyoming
District of Columbia
South Dakota
Minnesota
Massachusetts
Vermont

## BEA DATA:
Income Lags in Greater Minnesota Counties 

**Income Lags in Greater Minnesota Counties **

- Hennepin County (Minneapolis and surrounding areas) per capita income is highest in state at $44,302
- 7-county Twin Cities metro area has highest income and earnings
- Earnings grew fastest in north central counties between 1992 and 2002
- Average wage per job in Greater Minnesota is less than 75% of 7-county metro area wage

## Slide 10

**Notes:**
Hennepin county income is $4,691 higher than the next county, Carver
MN PCI would rank 7th in the state after Hennepin, Carver, Washington, Dakota, Olmsted, Ramsey, Hennepin County per capita income is more than twice income in the 7 lowest counties: Morrison, Wadena, Clearwater, Todd, Red Lake, Lake of the Woods, Mahnomen
Pierce County, WI - $27,676; St. Croix County, WI - $30,756; Polk County, WI - $24,210; Pepin County, WI - $24,495

## Slide 11

**Notes:**
Lowest counties (Norman (-4), Kittson (0.2), Lake of the Woods (1.2), Wilkin(1.4), Traverse(1.9), Marshall (8.7), and Redwood (9.5)
Highest counties - Lake, Becker, Pipestone, Cass, Pope, Pennington, Koochiching, Carver, Kandiyohi, Benton

## Slide 12

**Notes:**
Ramsey County had income growth of 1% 

## BEA DATA:
Trends in Components of Income

**Trends in Components of Income**

- Trends in earnings and wages
- Trends in asset income (dividends, interest and rent)
- Trends in transfer payment income (data includes types of transfer payments: unemployment, Social Security benefits, medical payments, etc)
- Trends in farm income

## Slide 14

**Notes:**
in Traverse County, asset income is almost a third of personal income (31.7 percent), and in Cook and Big Stone counties 29 percent
In 15 counties - all in Greater Minnesota, asset income is more than one-quarter of personal income. Except for Cass, Cook and Lake of the Woods counties, these counties are in rural, agricultural areas
Per capita asset income was highest in small, rural counties - Cook, Traverse and Big Stone counties - and in Hennepin County
Growth in per capita asset income- highest in Greater Minnesota between 1992 and 2002, but asset income in Traverse County (the third highest per capita asset income) declined (after adjusting for inflation) more than 7 percent. Olmsted County asset income declined even more (12.3 percent).  
9 counties had growth in asset income more than twice the state average (20 percent) Anoka, Sherburne, Dodge and Houston, Beltrami, Cass and Cook, Pennington and Lake counties. 

## Slide 15

**Notes:**
social security, medical payments - including Medicare and Medicaid, unemployment insurance, public assistance and public pensions
one-eighth of all personal income, but 29 percent in Mahnomen County
five additional counties, the proportion is one-fourth or higher 
In six of the seven Twin Cities counties, transfer payments make up less than 10 percent of all income. In Ramsey County, the proportion is 13.9 percent
Transfer payments grew on a per capita basis slightly faster than earnings or asset income, increasing 23.7 percent between 1992 and 2002

## Medical Payments Are Biggest Part of Transfer Payments
Source: BEA

**Source: BEA**

**Notes:**
Medical payments and retirement & disability have reversed position over the last 4 years 
Veterans' benefits and income maintenance have changed very little.
Unemployment benefits jumped from 2.2% in 1999 to 5.0% in 2002.
Medical payments increased 2.3% from 38.3% to 40.6%
Retirement & disability dropped from 41.8% to 37.6%

## Non-Metro Lags Metro Earnings
Per Capita by Residence
(adjusted for inflation)
Source: BEA

**Per Capita by Residence**
**(adjusted for inflation)**
**Source: BEA**

**Notes:**
Earnings grew faster in the late 90s  in the seven Twin Cities counties (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington) - 21.2 percent compared with 19.9 percent in the remaining 80 Minnesota counties. 
In the first two years of this decade, earnings declined 2.2 percent in the Twin Cities counties, but grew 0.9 percent in the Greater Minnesota counties
Greater Minnesota counties averaged per capita earnings of $16,986 in 2002 or more than $11,500 less than per capita earnings in the seven Twin Cities counties 
The gap between Twin Cities and Greater Minnesota counties grew by more than $2,000 since 1992 after adjusting for inflation 
Note: Data for the Twin Cities was used in this comparison rather than the metropolitan/non-metropolitan area data from the Bureau Of Economic Analysis because counties included in metropolitan areas change after each census. To maintain consistency, this analysis compares the seven Twin Cities counties and the 80 Greater Minnesota counties. Similar trends appear in the Bureau Of Economic Analysis data for metropolitan and nonmetropolitan areas.

## Slide 18

**Notes:**
The seven Twin Cities metropolitan counties and in Olmsted County were the only counties with earnings greater than the state average

## Slide 19

**Notes:**
In 2002, farm earnings were down in many counties and in eighteen counties farm earnings were negative. In 2001, seventeen counties had negative farm earnings

## Slide 20

**Notes:**
The impact of farm earnings on per capita income in small counties like Kittson County can be extraordinary. In 2001, Kittson County's per capita income was $21,579, in 2002, income jumped to $25,033. Consequently, Kittson County ranked first in per capita income growth, after ranking last the previous year, with a decline of 14.8 percent. Farm earnings in Washington County, a populous metropolitan county, grew more than 8 million dollars between 1992 and 2002, but the impact on per capita income was very small. Total farm earnings in Washington County were three times farm earnings in Kittson County in 2002, but because of the difference in population size, per capita farm earnings were 14 times higher in Kittson County. 

## Slide 21

**Notes:**
Average wage per job in Hennepin County was $45,657 in 2002 or more than twice as much as the $19,840 in Lincoln County. In  1992, Lincoln County's average wage per job was 47 percent of Hennepin County's; by 2002, it was only 43.5 percent
In 60 of Minnesota's 87 counties average wage per job was less than 75 percent of the state average ($36,651), nine more than in 1992

## Slide 22

**Notes:**
Only eight counties had increases greater than the state average: Hennepin, Dodge, Scott, Faribault, Dakota, Carver, Clearwater and Sibley. 
Despite strong growth, the average wage per job in all of these counties except Hennepin and Dakota, remains less than the Minnesota state average. 
The difference between average wage in Hennepin County and the remaining high growth counties ranges from $900 in Dakota County to $22,500 in Sibley County. 
Every county had inflation-adjusted increases in average wage per job, but in Lake, Todd, Itasca, Lac qui Parle and Freeborn counties the gains were less than $1,000

## QCEW DATA:
Regional Analysis of Wages

**Regional Analysis of Wages**

- Disparity across counties can be somewhat misleading
- Regional analysis gives a similar picture but eliminates the skewing of small counties
- Minnesota LMI office publishes data by several different regional cuts
- QCEW gives data by NAICS code at county and regional levels

## Slide 24

**Notes:**
Average weekly wage in Region 6W amounts to an annual salary of $23,452 or 128% of poverty level for a family of four with 2 children. For a 2 person family with no children, it means 194% of poverty. 

## Industrial Sector Does Not Explain Wage Disparities
Difference between Highest and Lowest Economic Development Regions
Source: ES-202

**Difference between Highest and Lowest Economic Development Regions**
**Source: ES-202**

**Notes:**
regional data suggests that factors other than industrial mix are pushing wages higher in the Twin Cities.

## Slide 26

## Norway Has Highest Per Capita Gross National Income

- Norway Has Highest Per Capita Gross National Income

**Notes:**
Denmark		33,750
Japan		34,510
United States	37,610
Switzerland	39,880
Norway		43,350
1`5 countries have PCI less than $300, all but one are in Africa
Ethiopia		90
Burundi		100
Congo, Dem. Rep.	100
Sierra Leone		150
Malawi		170
Niger		200
Mozambique	210
Rwanda		220
Nepal		240
Uganda		240
Chad		250
Central African Republic		260
Madagascar	290
Mali			290
Tanzania		290

## For More Information

*Recession Dampens Minnesota's Personal Income Only Slightly *_http://www.demography.state.mn.us/DownloadFiles/Recession.pdf__* *_
- Bureau of Economic Analysis (Regional Economic Information System) _http://www.bea.gov/bea/regional/statelocal.htm__ _
- Minnesota Labor Market Information  _http://www.deed.state.mn.us/lmi/__ _
- Consumer Price Index (inflation calculator) _http://woodrow.mpls.frb.fed.us/research/data/us/calc/__ _
- World Bank Data (Gross National Income)_http://www.worldbank.org/data/countryclass/countryclass.html_