New Research Shows Kentucky's Personal Income Gains Lag Other States

Nov 18, 2019

According to new research, Kentucky's economic growth in the second quarter of the year was the third slowest in the country. The report from Pew Charitable Trusts shows all states experienced gains in personal income, despite economic turbulence in the farming sector. 

The group defines personal income as paychecks, employer benefits, federal and state benefits, as well as rental income.

Joanna Biernacka-Lievestro, a research officer with Pew, said Kentucky's post-recession recovery has been slower than the U.S. as a whole, based on personal income growth.

"Over the long-term health care and social services assistance was the industry that contributed the most to the state's personal income growth since the recession started, while mining was the biggest drag."

Biernacka-Lievestro said these trends matter to individuals and families, as well as to state governments. States use the metric to help plan budgets, set spending limits, and estimate public service needs. Federal officials use state personal income to determine how much money to allocate for programs such as Medicaid. 

She said while the decline in the mining industry can partially explain the lackluster growth in the commonwealth, population growth is also a factor. 

"We can see that Kentucky gained residents at a slower pace than the typical state between 2008 and 2018. In fact, Kentucky was the 19th slowest-growing state over the decade."

Biernacka-Lievestro said rapid population growth is typically associated with a strong labor force and economic expansion. 

Tennessee's personal income growth outpaced the national average while Indiana's fell below. 

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