Personal income in Maine has soared more than almost any state's, and here's why
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Maine's personal income increased at the ninth-highest rate of any state during the beginning of 2021.
Mainers’ personal income soared in the first quarter of the year — the ninth-largest increase in the U.S.
Data released Tuesday by the federal Bureau of Economic Analysis shows Maine residents raked in $84.2 billion during January, February and March. That raw total is up 15% from $73.2 billion in the last three months of 2020 and far higher than any quarter of that year.
On an annualized, seasonally adjusted basis, the Q1 increase works out to 74.7%, according to the bureau, ranking Maine No. 9 among all states and the District of Columbia.
The only places where income spiked even higher were, in rank order: Mississippi, West Virginia, Kentucky, Arkansas, Michigan, Alabama, New Mexico and Oklahoma.
In Mississippi, personal income increased 89.3%, while the smallest change was an increase of 31.1% in D.C. Nationally, personal income increased at an annualized rate 59.7% in the first quarter, after decreasing 3.9% during the fourth quarter of 2020.
There’s a clear, perhaps one-time cause for the double-digit growth: federal and state pandemic relief.
Relief payments and other “transfer receipts” ballooned by $2.3 trillion nationwide during the first quarter, accounting for almost all the growth of personal income, the BEA said. In Maine, the increase was $10 billion, compared to the fourth quarter of 2020.
The relief came via the Coronavirus Response and Relief Supplemental Appropriations Act, which provided $600 payments to individuals, and the American Rescue Plan Act, which sent $1,400 checks. In addition, the Rescue Plan supplemented state unemployment benefits with a temporary $300 weekly increase.
Those flat payments had an especially big impact in states such as Maine, where per capita income was already low compared to most other states. Mainers earned an average of $32,637 during 2019, according to census data.
Earnings buoyed personal income growth for another reason, too. Maine recorded a total increase in net earnings of $919 million during the first quarter. While that pales in comparison to the effect of the pandemic relief, the earnings jump was an 8.8% increase over the total in 2020’s fourth quarter, and ranked No. 7 in the U.S.
States with higher percentage increases in earnings were, by rank: Texas, Michigan, Tennessee, Missouri, Utah and Colorado.
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This is pretty misleading. When you start with a low baseline, an infusion of funds raises growth pretty quickly. And averages are misleading. What matters is how the income was distributed.
What does this really tell us about the State's financial health? I don't know anyone who is better off after 2020. And with all the business closures, this call for an OPEGA review.
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