Not Mississippi II

In my last post I asked the question “do higher growth rates predict that Mississippi will have higher per capita income than Minnesota?”  I picked the two states because the Mackinac Center argues that, due to higher growth rates, Mississippi should be a model for Michigan and we at Michigan Future have argued for Minnesota being a model.

Lets look at what happened to per capita income in the two states from 1990.

In the Nineties (1990 through 1999) per capita income in Mississippi rose by sixty four percent compared to fifty five percent in Minnesota. Predictive of future prosperity?  In a word no! Mississippi started and ended the decade as the poorest state in the nation. Minnesota went from fifteenth to tenth. Even though it had a lower growth rate, per capita income in Minnesota (because it started with a much higher base) rose more than $12,000 as compared to less than $9,000 in Mississippi.

So far this decade (2000-2008), the same story. Mississippi growing by forty one percent, Minnesota by thirty two. But Mississippi is still the poorest state in the nation, Minnesota the eleventh richest. And for the decade so far, Minnesota per capita income grew more than $10,000, Mississippi’s up less than $9,000.

So at the end of nearly  two decades of superior per capita income growth, Mississippi remains the poorest state in the nation and Minnesota one of the richest. The gap between the two grew from $6,600 to $12,600. Its clear that higher per capita income growth rates – even over a period as long as two decades – are a poor measure of a state’s current or future economic well being. Who would prefer to have Mississippi’s economy – today or in the foreseeable future – rather than Minnesota’s?

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