Declining Delaware Per Capita by Dr. John Stapleford July 2, 2020

Center for Economic Policy & Anaysis

(GRAPH SOURCE: U.S. BUREAU OF ECONOMICS ANALYSIS – DELAWARE PER CAPITA INCOME AS A PERCENT OF THE U.S.)

Per Capita (Per Person)personal income is one important measure of the economic well being of a society. In 2002 Delaware per capita income was 18% above the nation (see chart). It has been downhill since then with 2019 seeing Delaware per capita income registering 4% below the nation. What has happened?

Economists track personal income as three major components: earnings (wages and proprietor’s income), investments (dividends, interest, rent) and transfer payments (Social Security, Medicare, Medicaid, TANF-Temporary Assistance for the Needy Families).

Earnings are the largest component of personal income, accounting for 60%.  From 2002-2019 total earnings in the U.S. increased 86%, but rose only 47% in Delaware.  The closing of hte DUPont company resulted in a substantial loss of high wage jobs in Delaware.  The average wage in the state has gone from above to below the nation. 

The loss of high wage earners in Delaware was accompanied by a slow down in the income from investments. From 2002-19 income from investments rose 133% across the nation but only 94% in Delaware. 

Change in Total Transfer Payments, 2002-29 in Delaware and the U.S.

The state rose faster then the nation in all categories pof transfer payments, most notably in the Social Security and Medicare (beach retirees) and Medicaid ( liberal eligibility requirements).   Medicaid is now the single largest line item in the state government’s budget. 

The current condition of Delaware are lower paying and most transfer payments by formula increase no faster than inflation. 

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Declining Delaware Per Capita by Dr. John Stapleford July 2, 2020
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