US per capita personal income (personal income divided by population) fell 2.6 per cent nationally in 2009 to $39,138, after rising 2.0 per cent in 2008. It was the first decline in 40 years.
The Bureau of Economic Analysis, defines personal income as the income received by all persons from all sources. Personal income is the sum of net earnings by place of residence, property income, and personal current transfer receipts and on Thursday, the BEA said across states, per capita personal income fell as much as 5.9 per cent in Wyoming and grew as much as 1.8 per cent in West Virginia. Net earnings is earnings by place of work (the sum of wage and salary disbursements, supplements to wages and salaries, and proprietors’ income) less contributions for government social insurance but before income tax deductions.
The BEA said that in three of the six states with personal income growth in 2009, a rise in net earnings and transfer receipts offset declines in property income. Net earnings, which declined 3.7 per cent nationally in 2009, rose 0.7 per cent in Maryland, 0.7 per cent in West Virginia, and 0.3 per cent in Virginia. The gains in Maryland and Virginia largely reflect earnings inflows associated with commuters who work in the District of Columbia (mainly civil servants in Washington); wages and salaries paid by employers located in Maryland and Virginia fell 0.1 per cent and 0.5 per cent respectively. In the other three states with personal income gains in 2009 (Maine, Kentucky, and Hawaii), increased transfer receipts were sufficient to offset declines in both property income and net earnings.
In the states with the largest personal income declines in 2009, the industries with the largest earnings losses typically reflected the states’ distinctive economies: Nevada’s 4.8 per cent personal income decline, the second largest decline among states since 1969, is mostly accounted for by construction and the accommodations industry (which includes casino hotels).
The biggest contributors to Wyoming’s 5.9 per cent personal income decline were mining (including oil and gas extraction) and construction. In New York, where personal income fell 3.4 per cent, the earnings losses were primarily concentrated in the finance industry. The biggest earnings decline in Connecticut was also in the finance industry, but manufacturing and construction declined almost as much.
Michigan’s 3.0 per cent personal income decline reflected large losses in durable goods manufacturing. The industries contributing the most to the 2.5 per cent fall in personal income in California, and the 2.7 per cent fall in Arizona and Florida were construction and manufacturing. Farming can account for all of South Dakota’s 3.5 per cent personal income decline.
BEA report and tables