Study examines Wisconsin income growth

Wisconsin’s per capita personal income grew by 54.5 percent during the 1990s, exceeding the nation’s growth rate of 50.4 percent, according to a recently released study by Jon Udell, UW–Madison emeritus business professor.

The growth rate of total personal income in Wisconsin during the 1990s was higher than that of all other states in the Great Lakes region. Among the other Great Lakes states, Illinois’ per capital personal income grew by 53.4 percent; Indiana by 52.3 percent; Michigan, 52.8 percent; and Ohio, 48.5 percent. The nation’s highest growth rate in per capita personal income was Colorado with 64.7 percent, and the lowest was Hawaii with 12.6 percent.

While the nation’s personal income growth overall slowed during the ’90s, Wisconsin’s slowed less. The state’s real per capita income grew at an annual rate of 1.61 percent during 1990-2000, while the nation’s growth rate was 1.33 percent.

On the darker side of Wisconsin’s economic picture, the state’s farmers suffered a net loss of $273 million in 2000 alone. During the ’90s, total farm production expenses exceeded receipts.

And overall, the state’s $28,066 per capita personal income was below the national average of $29,451.

Udell says the state’s annual growth of total income exceeded the nation in the early years of 1992, 1993 and 1994, but it lagged the nation the other seven years. Wisconsin’s growth fell considerably behind the nation’s in the latter half of the ’90s when the United States averaged 6.07 percent annual growth as opposed to 5.41 percent in Wisconsin. The worst single year in terms of relative growth was 2000, when national personal income grew 6.79 percent as opposed to Wisconsin’s 4.98 percent.

“This undoubtedly was at least partially caused by the advent of a recession in the manufacturing sector during that year,” Udell concludes.

Udell, who has been observing Wisconsin’s economy for 40 years, concludes his most recent study with a list of recommendations to boost the state’s economy. They include:

• Moving toward more competitive tax rates, especially on personal income.
• Supporting education at all levels to build a well-educated work force.
• Upgrading the state’s image among its own corporate leaders and businesses in other states.
• Protecting the quality of the state’s environment and resources.

For a copy of the study, call the UW–Madison School of Business, (608) 262-1550.