by Terry Besser
Assistant Professor and Extension Sociologist
Iowa State University
Q. Which Iowa county has the highest per capita income (according to the 1992 census)?
Q. Which county has the highest percentage of its income from transfer payments (primarily social security income) of all Iowa counties?
Q. What county receives the highest percent of its income from dividends, rents and interest?
Q. In what county do people receive the highest percent of their earnings from farming?
Q. Which county has the lowest per capita income?
Q. Where in the state do people receive the lowest percentage of their income from transfer payments?
Hint: The answers are Decatur, Mills, Sac, Polk Johnson, and Cass, but not necessarily in that order. Read below to find the correct answers.
When most of us hear the word "income," we think of earnings from labor. But a significant and growing component of income in Iowa comes from other sources. The three primary contributors to income are earnings from labor, earnings from investments (dividends, rent and interest) and transfer payments. Because we live in an agricultural state, it's important to divide labor earnings into farm and non-farm earnings.
Since 1970 there have been significant changes in the mix of income derived from wages, investments and transfer payments. Today in the average Iowa household, wage earnings comprise a smaller share of total income--5.7 percent compared to 75 percent in 1970. At the same time, income from investments has increased from 14 percent in 1970 to 18 percent of total income in 1992. The really big change, however, is in the amount of income from transfer payments. In l970, transfer payments accounted for 10 percent of lowa's personal income; by 1992 that figure was 17 percent.
These figures are for the state as a whole. When we examine the income in specific counties, we see some areas are affected by the changes more than others. Generally, the urban counties have a higher percentage of wage income in the mix of sources of income and a lower contribution from transfer payments and investment earnings. For example, in Johnson County (Iowa City), 74.7 percent of income is from non-farm wage earnings. The Des Moines area counties (Warren and Polk) and Cedar Rapids (Linn County) follow closely. For contrast, look at the counties that have the lowest percent of income derived from non-farm wages: Sac (38 percent), Greene (39.7 percent).
On the other hand, as you might expect, rural counties have a higher percentage of their income from farm earnings. Sac County (17.8 percent) is the highest in the state. Next is Lyon, and Greene and Delaware are tied for third place. Johnson has only 1 percent of its income from farm earnings. However, Polk (0.2 percent), Linn (0.4 percent), and Scott (0.7 percent) are even lower.
In spite of the low contribution of farm earnings, the urban counties generally have a higher per capita income than rural counties. Polk has the highest income per person at $22,315. Linn ($20,443) is second and Mills ($20,224) is third. Mills is a puzzling exception to the rule. I'll have more to say about Mills later. The counties with the lowest per capita income are Decatur ($13,225), Van Buren ($14,125), and Davis ($14,401). These incomes are substantially lower than the state per capita average income of $18,275.
Turning now to the other sources of income, the counties with the highest percent of income from transfer payments are Mills (32.8 percent) and Wayne (29.5 percent). Johnson (9 percent), Story (12.2 percent), and Linn (12.6 percent) have the lowest heading the list in percent of income from investment income are Cass (25.1 percent), Dickinson (24.4 percent), and Adair (24.1 percent). The lowest are Mills (10.9 percent), Warren (11.9 percent), and Pottawattamie (12.5 percent). Again, with the exception of Mills, the counties with the highest percent of income from investment earnings are rural counties and the lowest are urban. One explanation for the differences we see in income levels and sources of income for rural and urban counties is that rural counties in Iowa tend to have a larger percentage of older people in their population whose main source of income is investment earnings and transfer payments. The presence of Glenwood State Hospital and School in Mills County may partially explain the relatively high level of transfer income in that county.
It's important to realize how much of Iowa's income, especially in some counties, comes from sources other than wage earnings One way to use this knowledge is to consider what opportunities the change in income sources might pose for the state. For example, investment earnings are generated from capital frequently invested outside the state. Are there ways to encourage Iowans to invest their money locally in ventures that still provide relatively safe returns? Also, Social Security and some pension income come from sources outside the state, but a large percentage of that income is spent locally on housing, health care, goods and services. Would it be to the state's advantage to find ways to attract more retirees to the state?
If you would like to know more about the state's vital statistics, Iowa State University Census Services publishes yearly a book called "Iowa's Counties: Selected Population Trends, Vital Statistics, and Socioeconomic Data" which is available in your county extension office or your local library.
Contacts:
Terry L. Besser, ISU
Extension Sociology, (515) 294-6508
Del Marks, ISU Extension
Communication Systems, (515) 294-9807
