State Drops Off Top 10 List : Economy: Job losses and population growth knock California to No. 11 in the rankings based on per capita income.
In a potent symbol of California’s slide from economic grace, the Golden State on Thursday dropped off the U.S. Commerce Department’s Top 10 list of states with the highest average personal income, for the first time since record-keeping began in 1929.
Continuing job losses--particularly in aerospace and construction--and steady population growth combined to push California to No. 11 on the 1992 ranking by per capita income, the annual total income of a state divided by the resident population.
The state had slid to 10th in 1991. At best, it ranked in the middle of the Top 10 list in the early 1950s.
“It’s not surprising,” said Ted Gibson, principal economist at the state Department of Finance in Sacramento. “It mainly reflects the fact that California has not shared in the national recovery.”
Average per capita income in California was $21,472 in 1992.
California was bumped from the Top 10 by Illinois, which moved to ninth place from 11th in 1991. Illinois, which had fallen off the Top 10 in 1989, had average per capita income of $21,980, up 5.7% from 1991. Hawaii slid from ninth place to 10th. Mississippi remained the state with the poorest citizens, with average income of $14,128, up 6.7% from 1991.
Connecticut continued to lead all states with the highest average income. As home to many highly paid executives who commute to New York City, Connecticut boasted per capita income of $27,137 in 1992, an increase of 5.5%.
While the rest of the nation saw incomes grow at a healthy pace of 4.9%, Californians saw their paychecks edge up only 2.9% on average. Wage earners in 43 states saw their incomes grow faster than the 3.7% growth in U.S. prices.
Several measures underscored California’s poor economic performance:
* Total wages in the state’s durable goods manufacturing industry--which includes defense and aerospace--dropped 1.7% in 1992, compared to a 3.3% increase for the nation. The change was worse than that in 46 states, said Rudolph DePass, regional economist with the Commerce Department’s Bureau of Economic Analysis in Washington.
* Similarly, state wages in construction fell 2.8%, compared to a 4.2% increase in the rest of the country. That was worse than 47 states, DePass said.
* In private service industries--including retail, finance and real estate--wages increased 5.7%, compared to 7.8% in the rest of the nation. That change ranked last out of 50 states, DePass said: “That’s where we used to find Mississippi.”
California “is still, on net, losing jobs, and what growth there is, there’s a substitution effect away from high-paying manufacturing and construction jobs and toward low-paying service and retail jobs,” said Adrian Sanchez, a regional economist at First Interstate Bancorp in Los Angeles.
Per capita incomes were also pulled down by the state’s continuing population growth. Despite its economic woes, California ranked 15th among all states in such growth, DePass said.
Despite evidence that more people are fleeing California for other states, “we’re continuing to get foreign immigration in particular at a high pace, and also a high birth rate,” Gibson said.
Nationally, the news was much better. Per capita income averaged $20,114 in 1992, up from $19,169 in 1991.
As a sign of the nascent recovery in most states, incomes grew faster in 1992 than the year before. California and a handful of other states were the exceptions.
The state with the fastest-growing income was North Dakota (8.9%), owing to improved farm earnings. Among the other fast-growing states were West Virginia, New Jersey and North Carolina, each with 6.1% growth.
Among those with the slowest income growth: hurricane-ravaged Florida (2.6%) and Virginia (4.3%), which saw weak earnings in manufacturing, construction and other industries.
In California, there were no signs that personal income would improve anytime soon. “Everything depends, as far as income is concerned, on a decisive turn in the economy, and at the moment it doesn’t seem to be there,” Gibson said.
Highest-Income States
California dropped out of the Top 10 states in per capita income for the first time last year. Connecticut, home to many corporate executives and highly paid securities industry employees, remained at No. 1.
Per capita income Rank 1991 1992 1991 1992 Connecticut $25,722 $27,137 1 1 New Jersey 25,426 26,969 2 2 New York 22,595 23,842 4 3 Massachusetts 22,870 23,811 3 4 Maryland 22,444 23,249 5 5 New Hampshire 21,596 22,596 8 6 Alaska 21,723 22,419 6 7 Delaware 21,616 22,201 7 8 Illinois 20,789 21,980 11 9 Hawaii 21,172 21,779 9 10 California 20,874 21,472 10 11
Source: Commerce Department
