Montana Ethic Project: The value of living in this state

Joey and Libby Early

Thomas Power discusses the limits of economic indicators of well-being for Montana.

This is the 21st chapter of the 32-part video series “The Montana Ethic Project.” This chapter features Dr. Thomas Power, University of Montana emeritus professor of economics, discussing the subject, “Valuing Montana: An Economist’s Observations.” You can watch the whole video below. Here is how it begins:

“We are regularly told that the Montana economy is failing. That is a theme that one hears, especially during the Great Recession, but also before that, during poor times going back to the ’80s. Even during the 1990s and the first part of the 2000s, despite ongoing growth in population and income relative to the rest of the country, in addition to lower unemployment rates. Even during the good times in Montana we are regularly told that the Montana economy is in fact failing.

“The basis for most of those concerns that there is something seriously wrong with the economy is tied to the fact that the most familiar metrics that we use to try and indicate how well off Montanans are compared to the rest of the country is to look at averages: average pay per job, average income per capita. Judged by those measures the economy certainly appears to not be allowing Montana residents to live at as high a standard of living as the rest of the country. We’re seriously behind.

“That emphasis on economic failure concerns me for several reasons.”

Here is another, edited excerpt from Power’s presentation:

“In fact pay varies directly with the density of settlement. Per capita income rises directly with the density of settlement. Citizens who live in our largest urban areas also receive the highest incomes. They also have the highest pay per job. That is not surprising. All of us know that. If you live in Polson you can gripe about the pay level. But all you have to do is move to Missoula and you have access to higher pay levels. And if you don’t like the levels in Missoula, you can go to Spokane, a larger city with higher pay levels. If that is not high enough for you, you have Portland or Seattle, still higher.

“We all know there is a link between how large the cities that we live in are and their level of pay. Yet some of the largest areas, those with the highest pay per job and highest per capita income, are areas that are losing population, states such as Massachusetts, New York, New Jersey, etc., while some of the lowest paid states in the Union, including Idaho, Montana, Utah, Arizona, and New Mexico, have been gaining population. So again people voting with their feet have been leaving what are supposedly the rich and prosperous areas and moving to the poor, low income areas.

“That tells us something about the rationality of interpreting those simple measures of pay per job or per capita income.”

PERC—the Property & Environment Research Center—is a proud sponsor of the Montana Ethic Project. To learn how PERC’s ideas can help us honor one another’s rights to land, water, and wildlife,visit perc.org.