August 9, 2014 in Business

Idahoans spend more of income on essentials than most

Rebecca Boone Associated Press
 

BOISE – Idaho residents have among the lowest personal incomes in the nation but spend a higher percentage of their money on food, housing and other essentials compared with most other states, according to data released Thursday by the U.S. Bureau of Economic Analysis.

The report marks the first time the government is issuing consumer spending data broken down by state. Formerly, the bureau released consumer spending data at the national level only.

In 2012, Idaho’s per-capita consumer spending was $30,190 – just a few dollars higher than the per-capita spending in Utah and Hawaii. Per-person consumer spending was lower in Nevada, Alabama and Arkansas, and Mississippi came in last at $27,406.

But Idahoans had to spend a much larger percentage of their income than most – just over 43 percent – to cover the basics of food, housing, health care and gasoline or other energy goods. Only Mississippi residents spent a higher portion of their income on those categories, with almost half of their $27,400 per-capita income going to food, housing, gas and health care.

Nationwide, the average person spent about 37.5 percent of their personal income on those categories.

“That’s most of the problem with having a low per-capita income,” said Phil Watson, an associate professor of applied economics at the University of Idaho. “People talk about the purchasing power and the lower cost of living in Idaho. We’ve found that the cost of living is slightly lower, but not nearly enough to make up for the lower personal income.”

If Idaho’s lower cost of living were enough to make up for the state’s low per-capita income, then residents would be spending about the same share of their income on the basic necessities, Watson said.

Wages for Idaho jobs such as service industry and call center positions are slightly lower than those paid for similar jobs in other states. But those lower-paying jobs are largely the only ones available to many Idaho residents, Watson said.

Idaho residents spent about $4,695 per person on health care, according to the report. That was the third-lowest per-capita health care spending in the nation in 2012, after Nevada and Utah. The report shows Idahoans spent about $2,600 per person on food and groceries, about $1,855 per person for gas and $5,735 per person for housing in 2012.

Washingtonians spent more overall than many of their counterparts in the nation in 2012, the latest year for which figures are available. The Evergreen State ranked among the top 10 states for total personal expenditures.

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