It appears that most Nebraskans are finding themselves with a little more money in their pockets these days.
Nebraska in the past year posted some of the nation’s best household income growth, according to new figures from the U.S. Census Bureau.
Nebraska’s 3.4 percent growth in real median household income in 2017 well outpaced the 2.6 percent national growth rate and ranked 10th best among the states. And over the past 10 years, Nebraska’s income growth ranks fourth among all states.
“Our income growth has been toward the top, and that’s a position a lot of states would like to be in,” said David Drozd, a demographer with the University of Nebraska at Omaha’s Center for Public Affairs Research.
Iowa’s growth was not as strong in 2017, with its 2.1 percent gain ranking 22nd among states. But its 10-year figure ranks eighth best.
The figures are inflation adjusted, so it’s real money, suggesting that many residents are finding that they have more to spend even after accounting for increases in the cost of living.
Drozd and economists cited a number of factors that contribute to Nebraska’s high ranking: low unemployment, high rate of labor force participation, rising proprietor income, part-time workers seeing more hours and strong manufacturing growth.
“Manufacturing growth in Nebraska has been quite good,” said Creighton University economist Ernie Goss.
The solid Nebraska growth continued a trend. The state has consistently outpaced the nation in income growth since the start of the Great Recession 10 years ago. Nebraska’s income didn’t dive as much in the years after the recession struck and has rebounded more strongly, too.
Since that time, Nebraska has seen total real growth in median household income of nearly 8 percent. The U.S. growth in that time is just one half of 1 percent. In fact, 2017 was the first year that median household income in the United States topped pre-recession levels. Nebraska’s topped its previous peak in 2015.
Only North Dakota, South Dakota and Washington have seen bigger real household income growth since 2007. Nebraska was followed by Colorado, Texas, Utah and Iowa.
“We’re in the right group there,” said University of Nebraska-Lincoln economist Eric Thompson.
In 21 states, real income levels are still below where they were before the recession, with Nevada still more than 10 percent below.
The past decade has also led to a significant narrowing of the income gap between Nebraska and the nation. Going into the recession in 2007, Nebraska income was 7 percent below the U.S. figure. Now they’re nearly equal. If Nebraska’s lower cost of living is factored in, Nebraska income exceeds the U.S. figure, Drozd said.
Nebraska’s 2017 growth essentially equaled the highest the state has experienced in the past decade.
Median household income in Nebraska in 2017 was $59,970, meaning half of households made more than that figure and half made less. The median is a good measure of how typical families’ incomes are faring because income averages can be skewed by big gains on the upper end of the income scale.
There’s no doubt not all households have fared as well, Drozd said. Falling farm income in recent years has most likely depressed Nebraska’s income figures in recent years, though Thompson pointed out that over the 10-year period, farm income is still up.
Omaha’s growth in real household income has been similar to the state’s. It also grew 3.4 percent in 2017, which ranked 25th best among the nation’s 100 largest metro areas.
Dee Baird, senior vice president for economic development at the Greater Omaha Chamber of Commerce, said lots of factors, including consistently low unemployment, a higher-than-average percentage of college graduates and successful entrepreneurs contribute to Omaha ranking so high.
“All this creates a supportive community of doers, change agents and innovators,” Baird said. “We’re outpacing our peers thanks to everyone’s talent and commitment to making this place the absolute best it can be every day.”