Pockets of prosperity across USA escaped recession

— -- The recession hammered household income across the nation, but nearly a quarter of the states remained pockets of prosperity, with wages and other earnings growing through the downturn, according to a new study.

From 2005 through 2010 — a time period that also covers years before and after the recession — states and metro areas that depend heavily on energy and agriculture, such as Texas and Iowa, saw median household income rise, after adjusting for inflation, Sentier Research says in its analysis of U.S. Census data. Although the recession drove down the prices of oil, food and other commodities, surging demand from emerging markets such as China kept prices from plummeting and allowed producers to reap profits and avoid layoffs.

But Midwest manufacturing strongholds and states that were clobbered by the real estate crash, such as Florida and Arizona, experienced particularly sharp drops in household income.

For the entire country, median annual household income fell 3.5% from $53,168 to $51,287 as unemployment more than doubled to about 10%, leaving more Americans seeking fewer positions and many of the unemployed taking lower-level jobs.

But some regions fared better than others. Household income fell 4.7% in the Midwest and 3.5% in the West — California, Nevada and Arizona were hobbled by the housing crash — but only 2.6% in the Northeast and 2.5% in the South.

Overall, income rose in 12 of the 50 states and in Washington, D.C. The nation's capital, in fact, posted the biggest increase in household income, an 8.1% jump to $60,000 in the recession and its aftermath, as federal government payrolls grew.

Wyoming, a leading state for oil, gas and coal exploration, had the largest increase among states. Median income rose 3.6% to $54,700. Energy centers North Dakota, Alaska, Louisiana, West Virginia, Oklahoma and Texas also ranked in the top 10 income gainers, as did agriculture centers Iowa and Hawaii.

Michigan had the sharpest decline, with median household income dropping 9.5% to $47,000 as the auto industry lost hundreds of thousands of jobs in the recession. Other manufacturing centers among the top 10 income losers included Indiana, Ohio and Minnesota. The real estate crisis and a drop-off in tourism pummeled Florida — where median income fell 7.3% to $46,158 — as well as Nevada and Arizona.

Other findings:

•Seven of the top 10 metro areas with the biggest income increases were in Texas, which was cushioned by strong energy, technology and agriculture sectors, as well as conservative lenders that helped the state avoid the housing bust.

•Among metro areas, household income increased the most — 12.2% — in Lafayette, La. — which has many oil service companies, medical facilities and retailers. Although energy was hurt somewhat in the downturn, "companies haven't let people go" because they didn't want to recruit new employees in the upswing, says Bruce Conque, vice president of the Greater Lafayette Chamber of Commerce.

•Indiana's Elkhart-Goshen region, known as the RV capital of the world, posted a 13.6% drop in household income to $45,610, the sharpest among metro areas. Sales of RVs, luxury items, were hit hard. "You shouldn't live without an RV, but you can," says Kyle Hannon, vice president of the Elkhart Chamber of Commerce.

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