Economists look for root causes for state's low personal income

Accepted wisdom holds that one must identify the root source of a problem before it can be resolved. State economists have tried to do that with one of this year's political hot potatoes: Oklahoma's low per capita personal income.

In a May survey released by the University of Central Oklahoma, members of the Oklahoma League of Economists pegged four probable causes for why the state's personal income traditionally stands about 20 percent below the national average:

* Low labor force educational attainment. * Cost of living differential. * The low quality of the state's common educational system. * Cultural attitudes. Given less significance were factors often heard in business and political circles -- the absence of right-to-work legislation, the state's workers compensation system, and the level of taxation. "A recurring theme in state and national policy discussions is the importance of education," observed UCO's Prof. Michael Metzger, director of the League. "Consistent with that theme, education issues appear in this survey as the first, third, and sixth most important factors in explaining why Oklahoma lags the nation in per capita income. "Essentially, one-third of the income shortfall is attributed by League economists to these three factors alone." Dan Gorin, chief economist with the Oklahoma Department of Commerce, noted the cost of living factor reflects data from the American Chamber of Commerce Researchers Association, which consistently shows both Oklahoma City and Tulsa have a cost of living that is "a little more than 10 percent below the national urban average." "Most economists who look at our income gap will agree that some 40 percent is nominal, that is accounted for by lower real prices," he said. "However, the respondents to the survey might be simply focusing on the causes of the real rather than nominal differences." Cultural attitudes and a business and occupational mix that differs from the rest of the United States ranked as the fourth and fifth most important contributing factors. That was followed by a low-quality higher education system, inadequate transportation systems, Oklahoma's distance from major markets, expensive workers compensation and no right-to-work legislation. "These results will hopefully provide some added perspective on the relative importance of the various factors determining the future growth of the Oklahoma economy," said Metzger. "Perhaps too often political dialogue consists of competing special interest groups of all stripes arguing that their policy proposal -- and only theirs -- is the most important legislative priority to foster economic growth." The gap between Oklahoma and the U.S. personal incomes has remained relatively stable for more than a decade, the economists noted. The Sooner State's average per capita personal income for 1997 was $20,214, about 80 percent of the $25,298 national tally. The survey asked League members to allocate the state's income shortfall across potential determining factors by assigning percentages that totaled to 100 percent. Averages were calculated for each, allowing them to be ranked from most to least important.

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