The table shows each region's share in the Nation's personal income in 1929, 1950, 1969, and 1990, and the percentage changes in these shares. The size of the percentage change in a region's share reflects the size of the gap between the growth rate of income in the region and the growth rate in the Nation as a whole.

Historical income changes

The 1929-50 shifts in the geographic income distribution which are snown by States and regions in table 3, reflect several principal factors: the growth of the western areas of the country in their role as economic frontiers; the absorption into the main-stream economy of much of the historically underused labor force of the Southeast. especially under the impetus of the demand caused by World War II; the establishment of many military installations and their associated civilian activities in the south and west during the 1940's; the many State efforts at industrial development which resulted in increased industrialization through much of the south; and the large increase in agricultural income during the 1940's.

The slowing of the shift in the 1950-69 period also reflects a variety of factors. Federal Government payrolls-military and civilian-which had played so prominent a role in the economic growth of the south and west during World War II grew at a rate only slightly above average over the next two decades. In contrast, State and local government and service payrolls surged ahead in a "catchup" phase. Because the geographic distribution of the latter is much more in proportion to overall economic activity than is the distribution of Federal payrolls, their effect on income growth in 1950-60 was comparatively uniform across the Nation.

Agricultural income, which had risen sharply during the 1940's under the pressure of increase domestic and foreign demand, declined during the 1950's and rose only a little during the 1960's. This sluggish performance significantly slowed income growth in the south and west.

Income from textile manufacturing, which is of major importance in the income structure of the Southeast, declined during the 1950's and registered a rate of increase during the 1960's less than that of other industries. This limited income growth in the Southeast.

The slowing of the income shift to the south and west, as a result of the factors cited above, was mirrored in a slowing of the shift away from the north and east. Another relevant factor is that New England's share of the Nation's income dropped sharply during the 1940's but only slightly during the 1950's and 1960's as its economy shifted away from textiles and leather and into fastergrowing nonautomotive transportation equipment, research and development, and educational activities. Also, as the national economy experienced the inflationary pressures of the latter part of the 1960's, the economic resources of all regions were used at near-capacity rates and this tended to diminish differences in regional growth rates.

Two exceptions may be noted to the historical pattern of deceleration in rates of change of regional income shares. The Plains' share showed a slight percentage decline in the 1930's and 1940's but the largest decline of any region in 1950-69. In the Rocky Mountains, a sizable increase in the 1930's and 1940's was followed by a moderate decline in 1950-69. In both regions, overall income growth was relatively slow in the 1950-69 period, reflecting the decline of agricultural income from its highs of the late 1940's and early 1950's.

Projections: regions with rising shares

indicate

The projections, shown in summary in table 1 and in detail in table that the Far West, Southeast, and Southwest will continue to increase their shares of the Nation's personal income. However, as shown in table 1, their shares will grow at rates only about one-third as fast as in the 1950-69 period. An important factor in this slowdown is that Federal payrolls are about twice as important in these three regions as in other areas and contributed greatly to the above-average income growth of these regions in the past, but are projected to be a slow-growth income source in the 1969-90 period. Military strength is held constant for the projections and military payrolls increase only as average military pay increases. Also, Federal civilian employment and payrolls rise at about the same rate as other types of employment and income.

Farm income, though greatly diminished as an income source throughout the Nation, is still nearly twice as important in the Southeast and Southwest as in the rest of the country. Because of this, the relatively slow growth projected

for farm income over the next 20 years-only two-thirds as fast as income from nonfarm industries-is another factor tending to dampen projected income growth in these two regions.

Nevertheless, income in the Southeast, Southwest, and Far West is projected to grow faster than the national average in 1969–90. This is largely because of continued rapid growth in manufacturing in most States of these regions (table 6). In the two southern regions a “catchup" expansion in service industries, repr resenting a maturing or upgrading of the economic structure, is an additional factor. Also, in States such as Florida, Arizona, and California, immigration of retired persons is expected to boost personal income. However, because the income of a retired person is generally less than that of a wage earner or selfemployed individual, growth of per capita income in "retirement areas" will be dampened.

Six of the 10 States with the largest projected percentage gains in income are in the Southeast, Southwest, or Far West. These are Tennessee, Florida, Virginia, Arizona, California, and Nevada. The other four are Utah and Colorado, in the Rocky Mountain region; Maryland, in the Mideast; and Alaska, not classified in any region because of its geographic separation from other States.

Projections: regions with declining shares

Over the long run, income growth in the Rocky Mountain region has been above the national average. However, this pattern was reversed during the 1960's as a result of agricultural developments, which dominate the growth rate of income in Montana, Idaho, and Wyoming. The 1969-90 projection puts income growth in the region slightly below the national average, so that the region's share of the Nation's income drops slightly. Income from agriculture in Montana, Idaho, and Wyoming is projected to grow at a much slower pace than income from nonfarm industries.

In Colorado and Utah, however, a number of manufacturing industries are projected to expand at above-average rates, and metropolitan areas are attracting a variety of economic activities that serve areas outside of the two States. As a result, these two States rank ninth and tenth in the Nation in terms of the projected rate of income growth.

The projections show continued downtrends in the share of the Nation's income going to the Mideast, Great Lakes, Plains, and New England regions.

The large, economically mature, Mideast region sustained the largest percentage decline in share in 1929-69 and is projected to experience the second largest decline over the next 20 years. The situation is a reflection of both the age and the economic maturity of the region, and it is not possible to single out one or two industries as responsible. Income from most industries is projected to grow at slightly below-average rates. This is due partly to the shift of certain market-oriented industries-those that tend to locate where the population is concentrated-to faster-growing areas in the south and west. Another factor in the lag of the economy of the Mideast is the development in the newer urban centers of the Nation of many of the financial, wholesale, and communications services previously performed in the large cities of the Mideast.

Projections for two States of this region, Delaware and Maryland, are counter to the regional trend. Income in these States is projected to rise at above-average rates. This continues the long-term income trend in these two States, whose economic growth patterns tend to be more like those of the States to the south than of those to the north. In both States, manufacturing provides the major stimulus to projected growth.

The Great Lakes region has a large industrial capacity with emphasis on durable goods production. Over time, there has been a gradual shift in the share of durable goods industries away from the Great Lakes. This tends to leave some excess labor and plant capacity in the region which can be drawn rapidly into production. This excess was drawn on during World War II, in the postwar durable goods boom, and again during the Korean and Vietnamese wars, resulting in surges of income in the region that interrupted the secular downtrend. Should such developments occur in the future, they would again interrupt the projected downtrend.

The projected decline in the Plains' share of the Nation's income is solely a reflection of the dominant role of agriculture in that region. The share of agriculture in "export" industry earnings in the Plains is 26 percent, approximately three times its share nationally. "Export" industries, those that sell a large share of their output to other regions, are especially important in the economic growth

of a region. With farm income nationally projected to rise only 10 percent between 1969 and 1990, in contrast to a doubling of income from nonfarm "export" industries, income growth in the Plains is obviously limited. The projected 1969-90 decline in the Plains' share of income is much milder than the 1950-69 decline. This reflects the reduced importance of agriculture in the economy of the region. In 1950, agricultural income accounted for more than half of the income from "export" industries in the Plains, in contrast to 26 percent in 1969. The income growth lag in the Plains is concentrated in Iowa, North and South Dakota, and Nebraska, States where farm income makes up from 38 to 60 percent of "export" industry income.

New England's share of the Nation's income has been declining over the long run, but the shrinkage began to slow as early as 1950, as the region lost much of its textile and leather manufacturing industries. By the 1960's the region's income growth lagged only slightly behind the national rate, and its projected growth from 1969 to 1990 is not significantly different from that of the Nation. Projected growth for the three northern New England States is above average. In Maine and Vermont, the margin is slight; in New Hampshire, it is substantial. New Hampshire's projected gains are concentrated in trade and the services and are due in large measure to the direct and indirect effects of the State's growing recreation-oriented industries.

EMPLOYMENT PROJECTIONS

Employment projections are shown in table 6. Employment estimates covering the entire Nation at the local area level are not available at this time for years later than 1960. Because of this lack of data, state employment has been projected only on an all-industry basis. Projections of local area employment in industry detail will be made upon completion of a local-area employment series now being prepared by BEA on a place-of-work basis. Meanwhile, the industry earnings components of personal income can serve, at least in limited degree, most uses for which industry employment figures are desired.

In general, projected changes in total employment by State are closely correlated with those in total income. Minor differences between the behavior of projected employment and of projected income are caused by the concentration of retired persons, together with their income, in certain areas and because transfer payments and property income expand in some areas at rates that differ from the rate of employment increase.