Tuesday, August 9, 2011

Government Checks Drive Income Growth

Regular readers, those few whom I may frustrate with irregular postings, know I get crabby about images of New Mexico as a lapdog existing because of The Government, a huge single entity. Just the latest annoying mindlessness came yesterday from blogger Joe Monahan who used the phrase “the all important government sector…”
However, in one area—money—a part of The Government, the Barack Obama failed Keynesian stimulus part, has provided the action the past couple of years.
Metro area personal income figures for 2010, released today by the Bureau of Economic Analysis, show that transfer payments, meaning checks from the government, provided the income growth for our four cities the last two years.
The BEA said, “Personal income in the metropolitan portion of the United States rose 2.9 percent in 2010 after falling 1.9 percent in 2009.” The worst performer, Grand Junction, Colorado, down 0.9% in 2010, in very much in our neighborhood. “Private-sector earnings grew in 2010 in each of the 15 largest MSAs (accounting for 48 percent of this sector’s earnings in the metropolitan portion of the United States),” the BEA said.
We’re not in the game.
Personal income in Albuquerque was $30,984 million in 2010, a 2.2% increase from 2009 which, in turn, increased 0.5% in 2009. Albuquerque beat the nation’s 2.9% 2010 income increase but was behind the nation in 2009. Net earnings in Albuquerque dropped 1.4% in 2009 and 0.1% in 2010. Net earnings is what people get from working. Here is the BEA’s definition, “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, plus an adjustment to convert earnings by place of work to a place-of-residence basis.”
Transfer receipts—checks from the government to Albuquerqueans—were up 13.5% in 2009 and 10.6% in 2010.
Bad as it was in 2009, Albuquerque’s percentage earnings growth rank 87th nationally. As the national economy began to improve a little in 2010, Albuquerque earnings growth improved, but the growth rank dropped to 286. In other words, 285 metro areas beat Albuquerque.
After an ugly 2009 (net earnings down 6%) Farmington’s national rank for income growth bounced to 173 in 2010 from 306 in 2009. Still, Transfer payments were up 11.9% in 2009 and 12.1% in 2010.
By the measure of national rank of income growth, Las Cruces had good years in 2009 and 2010, ranking fourth and eighth in growth. Again, transfer payments drove the growth.
Personal income to Santa Feans dropped 2.6% in 2009, overcoming a 15.9% increase in transfer payments that year. Income grew 2.2% in 2010 on a 0.7% increase in net earnings, 1.4% growth in dividends interest and rent, and, once again a 10% hike in those government transfer check amounts.

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