Red states = Poor (Welfare) States

America’s Poorest States

September 20, 2012 by 247Editors LINK

Source: Wikimedia Commons / Creative Commons

 

Median household income in the United States declined for the second straight year, according to data released from the U.S. Census Bureau today. Income was $50,502 in 2011, more than 8% below the 2007 pre-recession peak.

While the trend is generally down, some states fared far better than others. Median income ranged from $36,919 in Mississippi to $70,004 in Maryland, positions both states have held since before the recession. Based on the 2011 Census Bureau American Community Survey, 24/7 Wall St. identified the states with the highest and lowest median household income.
Between 2010 and 2011, Vermont was the only state where median income increased. Income fell in 18 states and remained statistically unchanged in 31.  In Hawaii, which remained one of the wealthiest states in the country, median income decreased by more than $3,000 between 2010 and 2011 alone.
Not surprisingly, poverty rates continued to be high. The percentage of Americans living below the poverty line increased in 17 states between 2010 and 2011, the third consecutive increase for ten of these states. Of the states with the lowest income, eight had among the 10 highest poverty rates. Mississippi had the highest poverty rate in the country, at 22.6% of residents, compared to the national rate of 15.9%.
The poorest states in the country are almost entirely found in the South, with the exception of New Mexico. The wealthiest states can be found all across the country, including three in New England, four in the Mid-Atlantic, and two outside the contiguous 48 states.
Of course, not all residents of the wealthiest states earn as much as the median. According to the Census Bureau’s Gini Coefficient, which measures income inequality, there was a significant increase in the divide between the rich and poor in 20 states. The measure remained unchanged in the rest.
Though income inequality affects rich and poor states alike, the poorest states struggle with it most. Inequality was high in only three rich states: California, Massachusetts and Connecticut. Meanwhile, with the exception of West Virginia, all of the poorest states had among the highest income inequality scores, with six in the top 15.
In an interview with 24/7 Wall St., Brookings Institution fellow Elizabeth Kneebone explained that income inequality at a state level is often influenced by differences between the state’s high- and low-income cities and between urban and rural areas. “These are metropolitan economies that drive a lot of these [state] trends.” This was especially the case in California, where the Bay Area’s wealthy suburbs have incomes fueled by the tech industry and the low-income areas in other parts of the states are agricultural-based economies.
At least one positive development involves health insurance coverage, which increased in 37 states. While the poorest states improved, coverage remained relatively low. Three of the poorest states were among the 10 with the lowest coverage. In New Mexico, nearly 20% were not insured in 2011, much higher than the 15.1% national average. In the wealthiest states, coverage was among the highest, with four states having greater than 90% insured.
While most of the states with the lowest incomes suffer from weak economies, unemployment was not a significant problem. Only two states were among the worst 10 for unemployment in 2011. In fact, five of the worst-off states had unemployment rates lower than the national rate of 8.9% last year. In Oklahoma, one of the poorest states, unemployment was 6.2%. In the states with the highest median incomes, the results were similarly varied.
According to Kneebone, it is not a surprise that unemployment and income appear unrelated.  ”Earnings for middle and lower-wage workers have fallen or stagnated over time,” Kneebone explained. “So you can have a situation where jobs are being created … but the types of jobs matter. If those are jobs that pay low wages, even if you’re working full time, that might not be enough to lift you above the poverty line.”
To identify the states with the highest and lowest median household income, 24/7 Wall St. reviewed state data on income, poverty, and health insurance from the U.S. Census Bureau’s 2011 American Community Survey (ACS). Based on Census treatment, median household income for all years is adjusted for inflation. We also reviewed unemployment data provided by the Bureau of Labor Statistics and additional 2011 ACS data on individual cities. Because the cost of living has a direct bearing income, 24/7 Wall St. considered cost of living data for Q4 2011 from the Council for Community and Economic Research.
These are America’s poorest states.
America’s Poorest States
10. Oklahoma 
> Median household income: $43,225
> Population: 3,791,508 (23rd lowest)
> Unemployment rate: 6.2% (8th lowest)
> Pct. below poverty line: 17.2% (16th highest)
Oklahoma remarkably low unemployment rate of 6.2% for a state that is among the nation’s poorest. The poverty rate of 17.2% has inched up each year from the 2008 rate of 15.9%. The low median income suggests a need for higher paying jobs as Oklahoma relies heavily on agricultural production. Also, government and military, which tend to be low-paying jobs, account for the highest percentage of jobs in the state. But Oklahoma is also a major producer of oil and gas. Growth in the energy sector, which tends to pay more, would help improve on Oklahoma’s median income of $43,225.
9. South Carolina 
> Median household income: $42,367
> Population: 4,679,230 (24th highest)
> Unemployment rate: 10.3% (8th highest)
> Pct. below poverty line: 18.9% (9th highest)
South Carolina has been hit harder than many states by the recent economic downturn. The state’s sizable tourism industry has slowed as families cut back on vacations. The state’s 10.3% unemployment rate in 2011 was well above the 8.9% national rate. South Carolina’s poverty rate of 18.9% was the ninth highest in the U.S. and significantly higher than the national rate of 15.9%.Moreover, approximately6.5% of families made less than $10,000 a year, the fifth highest proportion in the country. Meanwhile, only 2.9% of families made more than $200,000 a year, the sixth-lowest rate in the country.
Also Read: The World’s Best (and Worst) Economies
8. New Mexico 
> Median household income: $41,963
> Population: 2,082,224 (15th lowest)
> Unemployment rate: 7.4% (18th lowest)
> Pct. below poverty line: 21.5% (2nd highest)
Last year, 7.2% of families in New Mexico earned less than $10,000, a larger proportion than in any state but Mississippi and Louisiana. In addition, 21.5% of residents lived below the poverty line, well above the national rate of 15.9%. As a result of poverty and limited job benefits, many New Mexicans cannot afford health insurance. Last year, 19.8% of the state’s residents were uninsured. This was significantly higher than the national rate of 15.1% even though the cost of healthcare in New Mexico was slightly below the national average.
7. Louisiana 
> Median household income: $41,734
> Population: 4,574,836 (25th highest)
> Unemployment rate: 7.3% (16th lowest)
> Pct. below poverty line: 20.4% (3rd highest)
Louisiana is located at the center of the poorest region in the country — the Deep South along the gulf coast. When Hurricane Katrina struck the region in 2005, the southern part of the state was decimated, particularly the city of New Orleans. Six years later, the city was still recovering with almost 17% of families earning less than $10,000 per year, more than triple the national rate of 5.1%. By many measures, conditions are actually getting worse in the state. As of 2011, for the first time since Katrina, more than one in five residents lived below the poverty line, only slightly better than Mississippi and New Mexico. Louisiana’s median income fell by more than the country as a whole, falling more than $2,000 between 2010 and 2011.
6. Tennessee 
> Median household income: $41,693
> Population:  6,403,353 (17th highest)
> Unemployment rate: 9.2% (16th highest)
> Pct. below poverty line: 18.3% (12th highest)
In Tennessee some 6.1% of families, or about a third of families in poverty, made less than $10,000 in 2012, a percentage point higher than the national figure. Poverty in many of Tennessee’s largest cities is even worse than the state as a whole. In Memphis, the state’s largest city, 27.2% of the population lived below the poverty line, including 13.1% of households earning less than $10,000 a year. In Chattanooga, 28.7% of the population lived below the poverty line, including 16.3% of households earning less than $10,000 annually. While the state’s median income was lower than most, Tennessee had the second-lowest overall cost of living in and the lowest cost of living for housing among all states in 2011.
5. Alabama 
> Median household income: $41,415
> Population: 4,802,740 (23rd highest)
> Unemployment rate: 9% (18th highest)
> Pct. below poverty line: 19% (7th highest)
In 2011, Alabama’s median income was more than $9,000 below the nation’s median income, while 6.4% of families lived off less than $10,000 a year — higher than in all but five states. For the second year in a row, Alabama’s poverty rate was 19%, remaining more than three percentage points above the national rate. Despite struggling with poverty, only 14.3% of Alabamians did not have health insurance last year — slightly better than the national figure of 15.1%. It is likely that Alabama’s cheap health care–the least expensive in the country for the fourth quarter of 2011–resulted in more insured residents.According to Gallup, since August of 2011 almost 23% of state residents reported not having enough money to buy food at least once.
4. Kentucky 
> Median household income: $41,141
> Population: 4,369,356 (25th lowest)
> Unemployment rate: 9.5% (13th highest)
> Pct. below poverty line: 19.1% (5th highest)
Kentucky’s unemployment rate of 9.5%, while not as high as states such as South Carolina and Mississippi, was well above the national rate of 8.9%. The employment rate will likely stay high in the near future as mining, a major industry in Kentucky, has declined in the past year due to a drop in natural gas prices. Severe poverty plagues the state, as 6.9% of families earned less than $10,000 in 2011, the fourth lowest of all states. Meanwhile, a mere 3% of Kentucky families earned more than $200,000 a year, the seventh-lowest rate in the country.  Fortunately for those with lower incomes, Kentucky has the fourth-lowest cost of living in the U.S., including the second-lowest cost of living for groceries.
Click here to see how all fifty states do with 24/7 Wall St.’s new interactive state tool.

3. Arkansas 
> Median household income: $38,758
> Population: 2,937,979 (19th lowest)
> Unemployment rate: 8% (tied-25th lowest)
> Pct. below poverty line: 19.5% (4th highest)
While the national median household income fell to $50,502 in 2011, Arkansas was just one of three states where median income remained below $40,000 for the year. Despite an unemployment rate of 8% in 2011, nearly one percentage point below the national rate, the 19.5% of families lived below the poverty line, one of the nation’s highest rates. Poverty was slightly less of a problem in Little Rock, the state’s largest city, which had a 16.4% poverty rate and a median income of $40,976. Despite having the third-lowest cost of health care nationwide at the end of 2011, 17.1% of residents lived without health insurance last year–well above the national figure of 15.1%.
2. West Virginia 
> Median household income: $38,482
> Population: 1,855,364 (14th lowest)
> Unemployment rate: 8% (tied-25th lowest)
> Pct. below poverty line: 18.6% (10th highest)
West Virginia’s median income of $38,482 was well off the median income of $40,093 in 2007. The state’s unemployment rate of 8% was well below the 8.9% nationwide. But, like Kentucky, a softening mining sector in 2012 could weaken West Virginia’s economy. The proportion of West Virginia residents without health insurance grew 4.9%, the third-largest increase in the U.S. Fortunately for cash-strapped residents, although the state’s overall cost of living is in the middle of the pack compared to all other states, the cost of groceries is the third lowest in the country.
1. Mississippi 
> Median household income: $36,919
> Population: 2,978,512 (20th lowest)
> Unemployment rate: 10.7% (4th highest)
> Pct. below poverty line: 22.6% (the highest)
The median income of the poorest state in the country, Mississippi, was just slightly less than 53% of the median income of Maryland, the richest state. Mississippi’s median income–like many states– fell each year between 2008 and 2011, dropping $2,677 during that time. Not only did Mississippi have the highest poverty rate in the country, but 7.8% of Mississippi families made less than $10,000 in 2011, which was also the lowest rate in the country. While unemployment declined in most states between 2010 and 2011, Mississippi’s actually rose 0.2 percentage points, one of only two states to see an increase in unemployment.
Michael B. Sauter, Samuel Weigley, Brian Zajac and Alexander E. M. Hess

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http://247wallst.com/2012/09/20/americas-poorest-states-2/ printed on November 7, 2012

Obama, the tax-break president

From Obama, the Tax Cut Nobody Heard Of

By MICHAEL COOPER

New York Times

October 18, 2010 LINK

HUNTERSVILLE, N.C. — What if a president cut Americans’ income taxes by $116 billion and nobody noticed?

It is not a rhetorical question. At Pig Pickin’ and Politickin’, a barbecue-fed rally organized here last week by a Republican women’s club, a half-dozen guests were asked by a reporter what had happened to their taxes since President Obama took office.

“Federal and state have both gone up,” said Bob Paratore, 59, from nearby Charlotte, echoing the comments of others.

After further prodding — including a reminder that a provision of the stimulus bill had cut taxes for 95 percent of working families by changing withholding rates — Mr. Paratore’s memory was jogged.

“You’re right, you’re right,” he said. “I’ll be honest with you: it was so subtle that personally, I didn’t notice it.”

Few people apparently did.

In a troubling sign for Democrats as they head into the midterm elections, their signature tax cut of the past two years, which decreased income taxes by up to $400 a year for individuals and $800 for married couples, has gone largely unnoticed.

In a New York Times/CBS News Poll last month, fewer than one in 10 respondents knew that the Obama administration had lowered taxes for most Americans. Half of those polled said they thought that their taxes had stayed the same, a third thought that their taxes had gone up, and about a tenth said they did not know. As Thom Tillis, a Republican state representative, put it as the dinner wound down here, “This was the tax cut that fell in the woods — nobody heard it.”

Actually, the tax cut was, by design, hard to notice. Faced with evidence that people were more likely to save than spend the tax rebate checks they received during the Bush administration, the Obama administration decided to take a different tack: it arranged for less tax money to be withheld from people’s paychecks.

They reasoned that people would be more likely to spend a small, recurring extra bit of money that they might not even notice, and that the quicker the money was spent, the faster it would cycle through the economy.

Economists are still measuring how stimulative the tax cut was. But the hard-to-notice part has succeeded wildly. In a recent interview, President Obama said that structuring the tax cuts so that a little more money showed up regularly in people’s paychecks “was the right thing to do economically, but politically it meant that nobody knew that they were getting a tax cut.”

“And in fact what ended up happening was six months into it, or nine months into it,” the president said, “people had thought we had raised their taxes instead of cutting their taxes.”

There are plenty of explanations as to why many taxpayers did not feel richer when the cuts kicked in, giving typical families an extra $65 a month. Some people were making less money to begin with, as businesses cut back. Others saw their take-home pay shrink as the amounts deducted for health insurance rose.

And taxpayers in more than 30 states saw their state taxes rise, according to the Center on Budget and Policy Priorities.

That is what happened here in North Carolina. The Treasury Department estimated that the federal tax cut would put $1.7 billion back in the hands of North Carolina taxpayers this year. Last year, though, North Carolina, facing a large budget shortfall, raised a variety of state taxes by roughly a billion dollars.

“It was a wash,” said Mr. Tillis, the state representative.

The guests at the Pig Pickin’ rally here could rattle off the names of the House speaker and the Senate majority leader with ease, if with disdain, and were up on many of the political controversies of the day. They studied the campaign fliers at their tables, and pocketed the 1.5-ounce jars of strawberry preserves with special labels urging them to vote for Judge Bill Constangy for Superior Court (“Preserving Justice,” the labels read).

Many volunteered that they thought the Bush tax cuts should be extended for all taxpayers, even for the wealthy ones whom Mr. Obama would like to exclude. But few had heard that there had also been Obama tax cuts — which will also expire next year unless extended, but have generated far less public debate.

Bob Deaton, 73, who wore a “Fair Tax” baseball cap, was surprised to hear that there were tax cuts in the $787 billion stimulus bill, which was wildly unpopular with many at the rally even though roughly a third of it was in the form of tax cuts.

“Tax cuts?” he asked. “Where were the tax cuts?”

Ron Julian, 50, a Huntersville town commissioner, said he thought his taxes had gone up under Mr. Obama. And Mr. Paratore, a former Hearst executive, said he might have noticed the tax cuts if his paycheck had jumped more in the weeks before he retired last year: “I couldn’t even tell you what it was, to be honest with you.”

The Obama administration wants to extend the little-noticed tax cut next year. Jason Furman, the deputy director of the National Economic Council, said the administration still believes that changing the withholdings was a more effective form of stimulus than sending out rebate checks would have been.

“In retrospect, we think that judgment was right,” he said. “It’s harder to predict what’s good for politics. Ultimately, the best thing for politics is going to be helping the economy.”

But at least one prominent economist is questioning whether the method really was more effective. Joel B. Slemrod, a professor of economics at the University of Michigan, analyzed consumer surveys after the last rebate checks were sent out in 2008 by the Bush administration, and after this tax cut, called Making Work Pay, went into effect under the Obama administration.

After the 2008 rebates, he found that about a quarter of the households surveyed said they would use the money primarily to increase their spending. After the Obama tax cut took effect, he said, only 13 percent said they would use the money primarily to increase their spending. The Obama administration believes that people did spend the money, and cites analyses calling the cut one of the more effective forms of stimulus.

Mr. Slemrod said it was not unheard of for voters to miss tax cuts. Just a few years after a 1986 overhaul of the tax system made significant cuts to most people’s taxes, he said, a survey asked people what had happened to their taxes. “Most people didn’t answer that they went down,” he said.

Rewriting History of Civil Rights

Conservatives Trying to Rewrite the History of Civil Rights

By Adam Serwer on Wed. May 23, 2012 

Mother Jones | Link

Former Sen. Edward Brooke (R-Mass.)Wikimedia

I can't recommend enough Jonathan Chait's rebuttal to National Review's attempt to rewrite the history of the civil rights movement to portray conservatives as its most ardent supporters:

It is true that most Republicans in 1964 held vastly more liberal positions on civil rights than Goldwater. This strikes [Kevin Williamson, the author of the National Review piece] as proof of the idiosyncratic and isolated quality of Goldwater's civil rights stance. What it actually shows is that conservatives had not yet gained control of the Republican Party.

But conservative Republicans — those represented politically by Goldwater, and intellectually by William F. Buckley and National Review — did oppose the civil rights movement. Buckley wrote frankly about his endorsement of white supremacy: "the White community in the South is entitled to take such measures as are necessary to prevail, politically and culturally, in areas in which it does not predominate numerically." More often conservatives argued on grounds of states' rights, or freedom of property, or that civil rights leaders were annoying hypocrites, or that they had undermined respect for the law.

What Chait doesn't say is that Buckley's editorial wasn't just an endorsement of white supremacy, it was an endorsement of vigilante violence, tacitly if not explicitly supported by local authorities, in pursuit of enforcing white supremacy. Elsewhere in the piece, Buckley writes, "sometimes the numberical minority [whites] cannot prevail except by violence: then it must determine whether the prevalence of its will is worth the terrible price of violence." As long as it's up to them.

Amazingly, nowhere in Kevin Williamson's piece does he attempt to reckon with this piece of National Review's legacy, even as he puts forth a revisionist history of the civil rights movement in which conservatives are its most ardent supporters. Buckley, and his declaration of solidarity with Southern white supremacy, is entirely unmentioned. Instead, Williamson adopts the usual sleight of hand Republicans deploy here, using the sort of liberal Northeastern Republicans who have since been purged from the GOP to argue that the civil rights movement was a conservative accomplishment. The Civil Rights Act of 1964 couldn't have passed without Republican votes, but few if any of the Republicans who voted for it could survive a primary challenge today. That Republican votes were necessary for the passage of the Civil Rights Act of 1964 doesn't change the fact that the conservative movement was ardently opposed to it.

The clearest evidence of this legacy is the current Republican Party. The priorities of today's GOP include rolling back the very civil rights accomplishments Williams wants to take credit for. A Republican-appointee-dominated Supreme Court has all but begged for another opportunity to overturn the Voting Rights Act of 1965, and Republican-led states are falling over themselves trying to put a case in front of them. The Bush administration flooded the Civil Rights Division of the Justice Department with Republican partisans, and civil rights enforcement fell almost across the board. The GOP has since engaged in a campaign to delegitimize the entire Civil Rights Division as a font of anti-white racism. When America was rocked by the economic crisis in 2008, Republicans flocked to the explanation that decades-old laws preventing racial discrimination in lending were responsible.

Say that this opposition is all about an ideological commitment to decentralization and federalism, and has nothing to do with race. Fine: But even in unicorn-land where political views are entirely unshaped by history and culture, that philosophy is against the concept of a strong federal government that uses its powers to secure the rights of individuals even when local authorities disagree. In other words, it stands in direct opposition to what Martin Luther King Jr. and his allies were trying to accomplish, and except where gun rights are involved, it remains the prevailing ideological disposition of the modern Republican Party and the conservative movement that dominates it.

Adam Serwer is filling in while Kevin is on vacation.

Myth of Obama's spending spree