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Average Income Shrank in 1991 : Economy: The Commerce Department reports the first inflation-adjusted decline in per capita income since 1982. California fared worse than most states.

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TIMES STAFF WRITER

Americans’ per capita income--after adjustment for inflation--declined in 1991, the first drop in nine years, the Commerce Department reported Wednesday.

The fall in real personal income was even greater in California, reflecting the impact of the recession in the state.

Nationwide, personal income averaged $19,082 last year, a scant 2.1% improvement over the prior year. That compares to a 4.1% rise in consumer prices, meaning real per capita income fell last year.

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In California, personal income averaged $20,952 in 1991, a 1.3% increase over 1990. Nevada lagged even more with personal income of $19,175, only 0.7% higher than the prior year.

It was the first time since 1982 that growth in per capita income failed to keep pace with inflation, and it was the slowest growth since per capita incomes rose just 1% in 1958, a recession year.

The Commerce Department calculates personal income using wages and salaries, rents, dividends and government payments such as Social Security. This total measure of income--$4.81 trillion nationally in 1991--divided by a population of 252.2 million yields the per capita income for America.

California last year was among a group of 14 slow-growing states, according to the Commerce Department. This represents a major change from the 1980s, when these states were enjoying rapid growth, significantly above the national expansion of per capita incomes. They led the boom, with the central part of the nation lagging behind.

Now the situation is reversed, with the Midwest enjoying growth while both coasts suffer from sluggish economic performance.

The eastern states, notably New England and New York, suffered “declines in earnings in construction, durables, manufacturing and retail trade,” the Commerce Department said. Incomes grew in the West, but population and inflation grew even faster.

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The fast-growing states, in which per capita income outstripped the national average, had strong gains in construction, manufacturing and service industries, the Commerce Department said. This group included Texas, Colorado, Wyoming, Montana, Hawaii and Utah.

Nationally, the growth rate in per capita income has been slowing since the end of the Reagan Administration. The increase in 1988 was 7.1%, and then slipped to 6.9% in 1989, and 5.4% in 1990 before reaching 1.3% last year.

The Commerce Department indicated that the recession, now in its second year, has had widespread and pervasive impact throughout the country. The growth of income slowed in all 50 states compared to the previous year’s performance.

“The defense cutbacks are having a big impact,” said Rudolph E. DePass, a Commerce Department analyst. “The high-income states (in the 1980s) . . . were generally all pretty heavily involved in the defense industry.”

Only seven states enjoyed per capita incomes in 1991 matching or exceeding the national inflation rate. They were: Wyoming, 5.1%; Montana, 4.8%; North Dakota, 4.8%; Hawaii, 4.6%; Louisiana, 4.2%; New Mexico, 4.1%, and Arkansas, 4.1%. Mississippi at 4% virtually matched the national average.

Economists predicted that income growth would improve modestly this year as the economy recovers.

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“1992 will be slightly better. You could see a 3% to 4% increase,” said economist Lawrence Chimerine of DRI-McGraw Hill, a Lexington, Mass., forecasting firm. “But we still will be lucky to match or exceed inflation, and we won’t make up for the weakness of the last several years.”

The Associated Press contributed to this report.

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