Culture & the Family

Oklahoma’s Private Sector Economy by County

December 9, 2015

Jonathan Small, J. Scott Moody, Wendy Warcholik, Ph.D.

The following excerpt is from an article published in the December issue of Perspective titled Oklahoma's Shrinking Private Sector. – Editor

Personal income is an important economic measure of a state’s well-being. Higher levels of personal income mean that a state’s residents are able to purchase more goods and services such as homes, cars, education, and health care. Fundamentally, personal income comes from two sources: the private sector and the public sector. The distinction between these two sectors is important because only the private sector creates new income. The public sector can only redistribute income through taxes and spending.

In 2014, Oklahoma’s private-sector share of personal income was 69.4 percent and ranked as the 29th largest in the country. However, the size of the private sector varies greatly by county. As shown in Chart 3 and Table 1, the county with the largest private sector in 2013 (the latest data available at the county level) was Logan County at 81.1 percent. At the other end of the spectrum, Cherokee, Jackson, and Comanche counties had the smallest private sectors at 45.2 percent, 42 percent, and 41.5 percent, respectively.

However, a note of caution must be observed when interpreting Comanche and Jackson counties because each hosts a major U.S. military installation—Fort Sill in Comanche County and Altus Air Force Base in Jackson County. Military installations, generally speaking, are located far from dense population centers. As a result, they tend to dominate the local economy, which creates a distorted economic picture. Nonetheless, military installations are paid for by taxpayers and are not part of the private sector.

If we exclude Comanche and Jackson counties as unique cases, that leaves Cherokee County with the dubious distinction of having Oklahoma’s smallest private sector (45.2 percent), with nearly no military component. More disturbingly, Cherokee County is joined by 6 additional counties whose private-sector share also falls below 50 percent: Okfuskee (48.7 percent), Ottawa (48.4 percent), Choctaw (47.9 percent), Muskogee (47.2 percent), Love (46.5 percent), and Adair (46 percent).

Over the 1969 to 2013 time period, 13 counties saw increases in their private-sector shares: Washita (52 percent), Comanche (23 percent), Latimer (19 percent), Dewey (9 percent), Pittsburg (8 percent), Beckham (8 percent), Ellis (6 percent), Woodward (5 percent), Oklahoma (5 percent), Logan (5 percent), Johnston (4 percent), Custer (2 percent), and Canadian (2 percent). The remaining counties mirrored the state average with declining private-sector shares. The steepest drop belongs to Ottawa County, falling 36 percent—to 48.4 percent in 2013 from 76.1 percent in 1969.

Read the entire article here.