Coastal States’ Income Outpaces Rest of Nation

Reversing a 50-year trend, regions of the United States have been growing apart economically in this decade as income growth in booming coastal states outstripped the rest of the country, the government said Thursday.

The Commerce Department said that, from 1929 until 1979, the differences in individual incomes in different geographic areas had been narrowing. However, since 1979, these differences have widened dramatically, it said.

States dependent on farming, energy production and traditional smokestack industries have lagged behind the income growth in areas such as New England and California, which are enjoying fast growth in service and high-technology industries.

The new report supports findings of a study last year by the Democratic staff of the Joint Economic Committee of Congress. Titled “The Bi-Coastal Economy,” that report said the nation was being divided between healthy economies on both coasts and a problem-plagued heartland.

The study said economic growth during the Reagan Administration had been concentrated in California and on the Atlantic Coast.

By contrast, many of the other states had been held back by their dependence on agriculture, oil and declining smokestack industries.

The new study by the Commerce Department’s Bureau of Economic Analysis generally agreed with those findings.

“We are seeing a falloff in the industrial, agricultural and mineral heartland of the country while services, defense and high-tech industries have prospered,” said Rudolph DePass, a Commerce Department analyst.

In 1979, the nationwide average income for every man, woman and child was $9,033. Only one region of the country was more than 5% below the national average. The Southeast, traditionally the poorest section of the nation, had a per-capita income of $7,676 that year, 15% below the national average.

By 1986, the differences had widened. Three regions--the Southeast, Rocky Mountains and Southwest--had per-capita incomes 10% or more below the national average.

The Great Lakes states of Illinois, Michigan, Ohio, Wisconsin and Indiana, a region with a heavy concentration of smokestack industries, fell below the national income average for the first time on record.

In 1979, the region with the highest average was the Far West, with a per-capita income of $10,321, 14% above the national average; followed by the Mid-Atlantic states, where incomes were 6% above the national average, and New England and the Great Lakes, tied with incomes 4% above the national average.

In 1979, the Plains states had incomes 1% below the national average; followed by the Rocky Mountain states, with incomes 4% below; the Southwest, with incomes 5% below the national average, and the Southeast, 15% lower than the national average.

The differences in incomes between the wealthiest and the poorest sections of the country in 1979 were the smallest they had been since the government began keeping income statistics in 1929.

In 1929, the Mid-Atlantic region of New Jersey, New York, Maryland, Delaware, Pennsylvania and Washington had the highest per-capita income, 38% above the national average, while the Southeast was the poorest region, with incomes 47% below.

In 1986, New England took over as the wealthiest region, with incomes 17% above the national average, which rose last year to $14,641. New England was followed by the Mid-Atlantic region, with incomes 13% above the national average, and the Far West, where incomes were 12% higher. Connecticut, with an income of $19,600, enjoyed the highest per-capita income of any state in the nation last year.

In addition to the Great Lakes, where incomes were 1% below the national average, other below-average regions last year were the Plains states, with incomes 4% below; the Rocky Mountains and the Southwest, with incomes 10% below, and the Southeast, with incomes 13% below the national average.

REGIONAL RANKINGS Here is a regional ranking of per-capita incomes for 1986, including each region’s income level and the percentage change from 1985.

Rank Region Income Change 1. New England $17,166 +7.7 2. Mid-Atlantic $16,565 +6.6 3. Far West $16,348 +5.5 4. Great Lakes $14,467 +5.4 5. Plains $13,992 +5.7 6. Southwest $13,195 +0.8 7. Rocky Mtns. $13,146 +3.6 8. Southeast $12,694 +5.4