August 30, 2006

Rhode Island Economy

Rhode Island's Poor Regional Performance on Income and Poverty

Carroll Andrew Morse

A just released Census Bureau report (pdf format) ranks that median household income of the fifty states plus the District of Columbia over past 12 months. Most of New England is at or above the national average ($46,242)...

  • Connecticut $60,941 (3rd)
  • Massachusetts $57,184 (5th)
  • New Hampshire $56,768 (6th)
  • Rhode Island $51,458 (12th)
  • Vermont $45,686 (23rd)
  • Maine $42,801 (33rd)
The report also provides data on the percentage of people living in poverty over the past 12 months...
  • New Hampshire 7.5% (1st)
  • Connecticut 8.3% (3rd)
  • Massachusetts 10.3% (11th)
  • Vermont 11.5% (19th)
  • Rhode Island 12.3% (25th)
  • Maine 12.6% (26th)
One grain of salt to take with the poverty data; the report says that "poverty thresholds do not vary geographically" which probably skews the numbers one way or another.

With that qualification, here are two questions worth considering...

  • Why does Rhode Island always do so much worse than Massachusetts and Connecticut on these kinds of lists, when we are all subject to the same regional economic trends?
Plausible factors: Connecticut data is skewed by the part of the state close to New York City. The Boston area is a sufficiently large metropolitan area to make comparisons to less densely populated remainder of New England difficult. But if the higher income numbers in Massachusetts and Connecticut are related to higher costs-of-living in Boston and New York City, doesn't it make their lower-than-Rhode Island poverty rates all the more impressive? And, on top of that...
  • Why then does New Hampshire, about the same size as Rhode Island in terms of population and at about the same proximity to Boston, do so much better than RI in this survey?

8:30 AM
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You'd think, since we've recently been informed that America is great because of its social programs, that Rhode Island, with its wealth of overly-generous social programs would rate much higher...

Posted by: Greg at August 30, 2006 11:24 AM

Rhode Island offers remarkably (indeed, unjustifiably) generous social services, unmatched by New Hampshire, the state referenced by Andrew for comparison. In fact, the social services we offer make us a destination state.

Is this not the simple answer for our lower median income?

Posted by: SusanD at August 31, 2006 11:19 AM

Susan, your neighbors to the North, in Massachusttes have a system of welfare that is generous. It could be in which the way welfare is implemented, more so than the funding of it.

Posted by: George at August 31, 2006 5:05 PM