Economy and Opportunity in Oklahoma

All Oklahomans depend on a growing economy. If all Oklahomans are to share in our prosperity, that economy also must provide genuine opportunity for all. A state’s economy must be not only business-friendly, but people-friendly.

Government has long had a strong role in building the American economy. Government has supported businesses by creating the legal framework for corporations, by developing regulations that keep businesses on an even playing field and build confidence in investors and customers. Federal, state, and local tax structures have been adapted over centuries to encourage and reward business investment and tie tax liability to profitability so that business taxes shrink or even disappear during hard times.

Governments also provide the infrastructure necessary for business to succeed. Commerce would be difficult or impossible without strong public-supported transportation and communications networks, and law enforcement and fire suppression that protects people and property.

Governments also help people succeed in the economy by providing free or low-cost and effective education, by maintaining and improving public health, and by encouraging participation in the workforce. Governments have also created the structures that make the American dream of upward mobility possible, through tax policy and through programs that help those who need our assistance – children, seniors, disabled, and struggling families – share in the gains from growth in the economy.

The measures in this section show that Oklahoma’s economy is falling behind the national one in many ways. There are a few bright spots, including a falling poverty rate and a low cost of living, but we have a lot of work to do in this area. State and local governments can and must play a leading role in this work. That role starts with expanding educational opportunities and improving both educational attainment and the quality of education. Infrastructure improvements are essential as well, not just in highways but in all transportation and communication systems. Without significant improvements, we cannot attract employers, who need an educated and capable workforce, and physical and virtual access to suppliers and customers across the country and around the globe.

State and local government also must ensure that economic opportunity is shared broadly across all socioeconomic and demographic groups. This work can begin with addressing the regressivity of the tax system described earlier in this section, with greater and fairer investments in education, and with a more robust network of safety-net assistance programs. However, governments also must demand more from the private sector by ensuring that workers can secure a living wage with paid leave and with access to health insurance.

The measures below show how Oklahoma compares to the nation in economic outcomes for businesses and individuals. In this section and throughout the discussion of indicators, a ranking of 1^st is the best and 50^th (or 51^st) the worst.

Income and Poverty

Measure	Result	State Rank	Trend
Income per person (2018)	$46,233	41st	Mixed
Poverty rate (2018) overall	13.4%	40th	Positive
Poverty rate (2018) – White	12.2%	—	Positive
Poverty rate (2018) – Black	27.6%	—	Negative
Poverty rate (2018) – American Indian	19.5%	—	Positive
Poverty rate (2018) – Hispanic or Latino	19.7%	—	Negative

Source: U.S. Bureau of Economic Analysis, U.S. Bureau of the Census

Income is the ultimate purpose and measure of the economy. In 2018, Oklahoma’s per capita personal income (all income of state residents, divided by the number of residents) was 15 percent, or $8,213 per person, below the national average of $ 54,446. Oklahoma’s result in 2018 is not significantly different from its result in 2007. During the 11 years in between, Oklahoma’s rank rose as high as 26^th and income was within three percent of the national average. However, these gains, which resulted from very high oil and gas prices, were short-lived. Further, they will be difficult or impossible to duplicate as the world economy reduces its use of petroleum products.

Income and economic growth are not shared equally across the economic spectrum, so it’s important to evaluate how the lowest income Oklahomans are faring. The poverty rate measures the share of persons living in households with income less than the federal poverty level (FPL). In 2020, the FPL varies by household size, from $12,760 for a person living alone to $26,200 for a family of four.

Oklahoma has consistently ranked in the low 40s among states (making it one of the 10 poorest states) in the last decade. However, the Oklahoma poverty rate is declining and the gap between the national poverty rate and the state rate has narrowed. Among children, the poverty rate is 15.9 percent, ranking the state 25^th. Among those over 65, the rate is 10.4 percent, or 39^th. Working age adults fare worst by this measure, with a poverty rate of 15 percent, 45^th lowest in the country.

Alarmingly, people of color have been left behind in the relative prosperity of the last decade. Twenty-nine percent of Black people in Oklahoma remain in poverty, as do 19 percent of Hispanics or Latinos. Their poverty rates are five and four percentage points, respectively, higher than the national average, a much bigger difference than in 2010. Oklahoma whites’ poverty rates are less than two percentage points higher than the national average (13 vs. 11 percent). American Indian poverty rates are lower in Oklahoma than in the rest of the nation (20 vs. 24 percent), but still very high.

Well-being

Measure	Result	State Rank	Trend
Family Well-being (2019)	Not reported	43rd	Negative
Homeowners burdened by housing costs (2017)	18%	14th	—
Renters burdened by housing costs (2017)	40%	6th	—
Renters severely burdened by housing costs (2017)	20%	8th	—
Households that are food insecure (2018)	15.6%	47th	Unchanged

Source: Prosperity Now, Joint Center for Housing Studies, U.S. Department of Agriculture

A thriving economy provides more than just financial supports; it helps every aspect of family life get better. Prosperity Now compiles 130 measures that cover 5 broad areas of family well-being. Compared to those in other states, Oklahomans more often struggle with access to credit and being behind on bills. Rankings are generally in the middle for businesses and jobs and for homeownership and housing. We rank in the bottom 10 states in every measure of health and in five of nine measures for education.

Oklahoma’s overall ranking for household well-being dropped from 34^th in 2016 to 43^rd in 2019. However, Oklahoma does better in a new and separate measure of racial disparity, where we rank eighth. 

Too many Oklahomans struggle to pay for housing and food. While Oklahoma ranks in the top third of the nation for housing affordability, 18 percent of homeowners and 40 percent of renters are burdened by housing costs, meaning they spend more than 30 percent of their incomes on housing. More alarmingly, one out of five renters spends more than half their income on rent, and are considered severely burdened.

Oklahoma ranks very high in food insecurity. In 2018 over 240,000 households, or 15.6 percent of the population are food insecure, meaning they worried about food running out, food didn’t last and they didn’t have money to buy more, or they couldn’t afford to eat balanced meals. Six percent of Oklahomans faced very low food security, or hunger, which occurs when food intake is reduced at some time due to lack of resources.

Business and Workforce

Measure	Result	State Rank	Trend
Business Climate (2019)	Not reported	43rd	Negative
% with high school or higher education (2018)	88.4%	35th	Unchanged
% with bachelors or higher education (2018) – All	25.6%	45th	Negative
% Bach. or higher (2018) – White	27.0%
% Bach. or higher (2018) – Black	19.1%
% Bach. or higher (2018) – Amer. Indian	15.9%
% Bach. or higher (2018) – Asian	48.8%
% Bach. or higher (2018) – Hispanic or Latino	11.7%

Source: CNBC, U.S. Bureau of the Census

Oklahoma’s overall rank has fallen from 28^th in 2008 to 43^rd in 2009. In that time, Oklahoma showed improvements in cost of living, business friendliness, access to capital and infrastructure. However, dramatic reductions in overall economy, workforce, and education made the overall ranking fall. At both the state and the individual level, there is no better predictor of economic well-being than education. More education makes citizens able to do a wide range of jobs and attracts businesses that offer those jobs. Unfortunately, Oklahoma is not competing well on this measure. High school completion has increased over the last decade and is keeping up with the increase across the country. However, even though more Oklahomans have a bachelor’s or higher (25.6 percent in 2018, compared to 22.8 percent in 2007), the gap between the state and the nation has increased, from 4.7 to 7.0 percentage points, making Oklahoma the 45^th-ranked state by this important measure.

As with poverty, educational attainment in Oklahoma varies widely by race and ethnicity. While 49 percent of Asians and 27 percent of whites have bachelor’s degrees or higher, that’s true for only 19 percent of the Black population, 16 percent of Native Americans, and 12 percent of Latinx Oklahomans.

Agriculture

Measure	Result	State Rank	Trend
Net farm income ($millions)(2018)	1,783	17th	Positive
Net farm acres (thousands)(2018)	34,200	8th	Unchanged

Source: U.S. Department of Agriculture

Oklahoma is the nation’s eighth largest farming state measured by acres in farmland, but ranks 17^th in net income, indicating that our farmland is less productive than the national average. However, our rank in net income has improved from 25^th in 2008 to 17^th in 2018 and net income per acre has increased from $31 to $52 in that time.