The States in America Where Incomes Grow Faster

New federal data show a striking divergence between earnings growth in GOP-led states and progressive states.

President Biden will never admit it, but he has Republican-led states to thank for the resilient U.S. economy and labor market. Witness how an earnings surge in right-leaning states is helping compensate for sluggish growth in progressive ones.

New state personal income data from the Bureau of Economic Analysis highlights how aggregate worker and proprietor earnings in red states grew significantly more in the last year than in the blues. The disparity owes to GOP-led states adding more jobs, including in higher-paying industries like tech and finance, along with faster-growing wages.

Earnings nationwide rose 5.4% on average between the first quarters of 2022 and 2023, but much less in New York (2.6%), Indiana (2.6%), California (2.9%), Connecticut (3.4%), Rhode Island (3.6%), Maryland (4%), New Jersey (4.3%), Oregon (4.5%) and Illinois (4.6%). Apart from Indiana, these states are run by Democrats—and most have been for years. They boast high taxes and a high cost of living, which along with Covid lockdowns spurred increased out-migration during the pandemic.

Meanwhile, earnings in the same period surged in North Dakota (9.7%), New Mexico (9.6%), Nevada (9.1%), Florida (9.1%), Nebraska (8.6%), Hawaii (8%), South Carolina (8%), Alaska (7.9%) and Texas (7.7%).

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