No doubt about it, there are poor states and rich states in the USA. Most Southern states are poor I understand. And New York and California are very rich.
But why is this so? We’re supposedly part of the same country. Same economy. Why the disparity?
I know that they used to say the South was still suffering after the Civil War. But that couldn’t still be relevant. Could it?
:):)
I think it’s an issue of the distribution of wealth. I’m not talking about socialism or other bogeymen. A strong economy needs a strong middle class; it’s not enough to produce goods if you don’t have customers to buy them. It’s the Henry Ford principle; he wanted his workers to be paid well enough that they could afford to buy a car.
New York and California are also states with the highest unemployment rates. In fact, only 4 of the bottom 16 states in unemployment rates are in the South.
[Moderating]
I don’t see any way this thread can stay out of Great Debates. Moving.
I think you need to recheck your numbers. California is not at the top. It has been around 8-10 for a while. NY is not even top 10 as the bulk of the state (as far as land goes) is rust belt.
Top 10 states:
Maryland
New Jersey
Hawaii
Massachusetts
Connecticut
New Hampshire
Alaska
California #8
Virginia
Washington
Wikipedia’s list appear to match pretty closely.
**As to reasons, part of it is tied to education rates. The 2 lists are fairly close. **
How do you define a “rich state”? Is it a state with a lot of rich people? A state whose residents have, on the average, a relatively high income in absolute terms? or a relatively high standard of living? Is it a state with a lot of natural resources? Is it a state where the state itself (i.e. the government) has a lot of money?
I live in New Mexico, which is pretty poor. Yet Arizona, right next door is pretty rich, comparatively speaking. So, not much to do with the civil war IMHO. There are poor northern states and rich former confederacy states (Texas springs to mind).
I don’t think there is a single silver bullet answer to this. I think New Mexico is fairly poor because it doesn’t have a really business friendly environment, has a lot of 3rd world type issues (nepotism and corruption), and basically just isn’t that attractive for a booming economy. It COULD be…but it really isn’t (this isn’t true across the board, of course…but that’s almost certainly true of all states wrt rich areas and poor ones). Other states have other issues. There are also race issues that factor into all of this too, of course…and that, too, varies from state to state. Race issues in Mississippi aren’t going to be the same as the ones in South Dakota or New Mexico.
It’s a really big country, so it would be astonishing if we didn’t have rich areas and poor ones, or if we didn’t have states that were richer and states that were poorer, despite the fact that we are all one nation.
I’m not sure Ford cared if his workers could buy a car. He was more interested in reducing the huge turnover occasioned by the terrible rote work on his assembly lines
Some States by Education rankings.
Play with the sort on the columns in the Wiki article.
Other factors are type of industry the state has and attracts. Finance, Insurance, Tech & Pharma tend to pay better generating more wealth. NY State is heavily buoyed by Wall street and the California gets a boost from Hollywood. New Jersey thrives on Pharma. Washington on tech. etc.
Someone has to fill each slot of the list. Adjusted for purchasing power I wonder how the list would look?
But your link states that
Alaska shows as a slightly higher median household income, but California as 38 million more people.
Economy ranking is a bit different. There, Alaska doesn’t make the list.
Different still is the list of States by GDP
Here we see the states we think of as rich. California, New York, Texas…
Good question:
The low cost of living states help a lot but many items like cars & electronics don’t adjust by state.
GDP is an odd measurement if talking individual. GDP will line up fairly close to population in the end.
On your link is GDP per Capita for 2015. NY does much better there and California drops to 10th.
Just saying that a ‘rich state’ definition would have to cover a lot more than median household income.
Fair enough, though I wouldn’t use total GDP by state.
Wealthiest States Lists generally like median household income or median per capita income.
California has the advantages of an ocean coast, the largest population (the higher the population, naturally the larger the total GDP), and a lot of fertile land (albeit some water-supply issues.) New York has had the benefit of a financial center and large city that goes back many many years.
The South is geographically disadvantaged. There’s not much purpose in a foreign trade partner shipping into Southern ports when the Atlantic coast is much more direct access.
…Just waiting, count-down, until someone chimes in with “Rich/poor states are that way because they are politically red/blue” …
Well, for one you just did the politicizing (nobody had mentioned it until you did), and for two, are you seriously arguing that policy doesn’t matter?
:dubious: You’re not waiting, you are the one bringing it up.
And for that matter, since it seems you want to bring up the topic, I see the correlation as being the other way around, in that a wealthier area has more time and resources to be concerned about social issues, and be more willing to share in their wealth than areas that are finding it more of a struggle to make ends meet.
The question calls for a book in response, so a couple of paragraphs feel ridiculous. Yet here I go.
What brings wealth to large populations? Riches for a few have always been possible. Prosperity for the masses, i.e. the creation of a middle-class, requires some preconditions. Entrepreneurship has to be available to the non-elite, social mobility must be allowed, capital must be freely available, and the creation of an educated class of specialists must be supported.
The South historically was far more antagonistic to these issues than the North. It put its resources into farming, which grows gradually, rather than industrial growth, which can grow exponentially. Social mobility was stunted by the control of an aristocratic class, who owned most of the wealth and didn’t use it as venture capital. The flood of immigrants that created huge competition in developing industries was discouraged because they kept a native working class captive. Wealth also follows education (and vice versa) and southern schools were underfunded. Virtually all the elite universities were in the north and these spun off the talent that supported all the new technologies. Needing to create two separate Jim Crow school systems was a gigantic waste of money that crippled half the population’s education and shortchanged the rest through underfunding.
This process went on for many decades. It got disrupted in the 50s and 60s, but the big changes have only had a few decades to work. That’s not enough time to change a whole population. The elite universities are still mainly in the North. The technologies they created still concentrate around them. The Southern states still underfund education, and their school systems rank at the bottom. The massive wealth spun off by machine-age industries is no longer available in a post-industrial era. Southern wealth is often tied to sources that are subject to boom and bust, like oil is.
The North was badly damaged by the collapse of the Rust Belt. People in droves moved South and jobs have therefore followed, but the jobs created are not the high-paying lifelong guaranteed employment with pensions that people remember from the 1950s. Additionally, the South was broadly antagonistic to unions. They lured manufacturers, from the North and abroad, with the explicit promise of lower wages. Other Southern base industries, like tourism, are historically low-paying as well.
So the South is trying to compete with the established base of wealth generation weighed down by multiple handicaps and needs to do so in a time when wealth concentrates in the few instead of the many. That means the real question is not why the Southern states are poorer but how they managed to get so relatively wealthy as they are.