State Population Growth Over Time

As part of the new Decennial population estimates, the U.S. Census Bureau put together this interactive map that shows the change in population by state for each Census over the past 100 years.  Very cool.

Also, note the dramatic decline the number of states showing growth of over 25 percent between 1910 (where nearly half the country is dark blue) and 2010 (where only 1 state is dark blue).  Expect more of a downshifting in population growth as Demographic Winter continues to set in across the country.

For example, last year the Census reported that Maine lost population for the first time since the 1960s (on a single year basis, not over the decade).  Yet, I wouldn’t be surprised if this map in 2020 shows Maine as negative over the decade.  Why?  Because the birth rate is currently not that  much higher than the death rate.  And since Maine is already the oldest state in the union, a rebound in the birth rate is unlikely while at the same time the death rate will continue to rise–unless the older folks move to Florida first in which case it will show up as out-migration.  In the end, it means that Maine will face Demographic Winter before the rest of the country so keep an eye on them to get a foreshadowing of what’s to come.

Should Census Funding be Cut?

Jonathan Parker over at Everything Finance brings up a good point . . . should the U.S. Census Bureau be the target of budget cuts?  Here is what he has to say:

With the house returning to Republican hands, economists are worried about the quality of economic data suffering due to cost cutting.  There is a very small constituency for using scarce taxpayer moneys to pay to collect economic statistics, especially when that means bothering said taxpayers with phone calls and surveys.  I just filled out and mailed in the American Community Survey – it took me two tries and several trips to the file cabinet.  But this survey is a very valuable way for us to keep track of how the economy is evolving and to develop more efficient ways to spend government money.  But as recently pointed out by the governmental relations committee of the American Economic Association, the Republican National Committee has threatened to change the survey so as to either undermine it or increase its cost.  The RNC resolution is here, some facts about the Survey are here. The Census has experimented with making the survey voluntary, has studied the results, and concludes here that there are serious quality/cost problems with making the survey voluntary.  The recent crisis should have emphasized the importance of having high-quality, timely economic statistics and I would encourage Congress to protect our ability to conduct economic policy in real-time and to study and improve our existing approaches. [Note: I have stripped the links because for some reason they do not work, even on their blog post]

I have to agree with him on this point, but for a slightly different reason.  My problem is that having high quality census data is a Constitutional mandate necessary to fulfill essential functions in the Republic such as redistricting.  I thought Republicans support Constitutional functions?

In the end, I do believe that the Census Bureau provides a public good that would be hard to fulfill by the private sector.  That being said, who knows how technological change will change this equation in the future?  The Economist magazine this week has an excellent series called “It’s a Smart World” about the evolving ability to monitor the physical world virtually.  Perhaps the U.S. Census Bureau will one day become obsolete.

Per Capita versus Per Household Personal Income

For state-to-state comparisons, per capita personal income is the standard-bearer.  Its simple to calculate and simple to understand; however, as I recently discovered it’s also simply misleading.

Why?  States where the average household is larger are penalized under a per capita ranking  because children don’t earn anything.  I discovered this problem when I noticed what an outlier Utah was in the per capita personal income rankings where Utah ranks as the 49th highest in 2009 at $31,612.  However, Utah also has the largest average household size at 3.23 people.  And there is a large variance among states with the lowest household size belonging to North Dakota at 2.32 people.

As such, failing to hold constant the difference in the size of households rewards states with small households and penalizes states with large household using a per capita personal income metric.  To illustrate, let’s look at Maine versus New Hampshire.

In 2009 per capita terms, Maine ranks as the 30th highest at $36,479 while New Hampshire ranks as the 10th highest at $42,585.  New Hampshire’s per capita personal income is 16.7 percent higher or $6,107 dollars for every man, woman and child.

However, the average household in New Hampshire is larger than it is in Maine.  New Hampshire’s households average 2.62 people (the 24th highest in the country) while Maine’s households average 2.42 people (the 49th highest in the country).

After adjusting personal income by household, New Hampshire ranks as the 14th highest per household personal income at $111,402 while Maine ranks as the 41st highest per household personal income at $88,261.  New Hampshire’s per household personal income is 26 percent higher, or $23,141, than Maine’s . . . adjusting for household size makes a big difference.  Also note that Maine’s relative economic performance falls from 30th under per capita to 41st under per household . . . another big difference.

My take away from this is that per capita personal income is a seriously flawed metric.  A state can, in the short-term, enjoy a bonus to its per capita income by simply having fewer children which shrinks the average household size.  However, as Maine is now discovering there is a long-term price to be paid called Demographic Winter.  Last year the U.S. Census Bureau reported that Maine’s population in 2009 fell for the first time since at least the 1960’s.  Think economic development in Maine is already tough . . . try doing it with a shrinking population base!

I will be posting another blog soon that further illustrates why per household personal income is the better metric.