Louisiana was the fastest growing state in per capita personal income in 2007. Louisiana is ranked No. 1 with the highest per capita personal income growth, according to a report released by the U.S. Bureau of Economic Analysis. Louisiana’s per capita personal income increased 9.2 percent, or $2,935, in 2007. Per capita income is the income per person in a given population. Per capita personal income is often used to measure a region’s standard of living. The BEA report said the state’s growth is due to Road Home subsidies given to Louisiana residents. Road Home is a federally funded program that provides compensation for Louisiana homeowners who were affected by hurricanes Katrina and Rita. For Louisiana’s entire population, these subsidies averaged $1,250 per resident. More than 185,000 people have applied but only 155,639 were eligible to receive the subsidies, according to the Road Home Web site. As of March 20, Road Home awarded $6.1 billion, an average of $58,843 to all eligible applicants. Jim Richardson, economics professor, said the the BEA report is “overestimated because it contains a great deal of Katrina relief.” Richardson said if the Road Home subsidies were not included in the BEA report, percentage change in per capita personal income would be around 5 percent – which would rank Louisiana at about No. 28. Despite being ranked No. 1 in per capita personal income growth, Louisiana is No. 31 for total per capita income. BEA reported that Louisiana has a total per capita personal income of $34,756 in 2007. This total is 10 percent less than the national average of $38,611. Kathy Albetski, chief of the Regional Economic Information System of the U.S. Bureau of Economic Analysis, said having a higher per capita personal income could mean more money Louisiana residents have to spend. “If any area is doing well financially, that would contribute to the sum of the U.S. [economy],” Albetski said. She said the construction and rebuilding process of southern Louisiana has contributed to the increased per capita personal income in Louisiana. Albetski said the groups of people who left after the hurricanes were primarily “lower-wage people.” She said with a lower population and people earning higher average incomes, the per capita personal income of Louisiana residents would increase. Richardson said the growth in per capita personal income in Louisiana will not help ward off a recession. He said we are as susceptible to feeling the impact of a recession as any other region. Louisiana may not feel the impact of a recession as hard as Michigan or Ohio because Louisiana does not depend on the durable goods industry, Richardson said. Durable goods – products which are not consumed or destroyed after a single use – include automobiles, appliances and furniture. He said if a recession does occur, people will be less likely to purchase durable goods.
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