Northridge Quake Caused Decline in Personal Income in California

The Northridge earthquake and lower wheat subsidies caused personal incomes to decline in four states in the first quarter of this year, the government said Wednesday.

In California, income was down 1.2% over the last quarter of 1993 as the Jan. 17 quake caused an $18.5-billion drop in rents at an annual rate because of uninsured losses, the Commerce Department said.

The effects of the earthquake were widespread enough to show a drop in the rate of increase for Americans’ incomes in the first quarter, to 1.3% from 1.5%, the department said.

Incomes decreased in North Dakota 1.6%, Kansas 0.3% and Nebraska 0.1%, as the government reduced wheat subsidies from high levels in the last three months of 1993.

Apart from the four states where incomes declined, only Montana experienced a change in income that did not keep pace with a 0.5% increase in prices nationally. The income of Montanans rose only 0.4%.

Eight states had income growth that exceeded the national average by more than one percentage point in the first quarter. They were New Mexico and Iowa, each up 3%; Minnesota, 2.9%; Arizona and Nevada, 2.7%; Utah, 2.6%, and New Hampshire and Louisiana, each 2.4%.

The Commerce Department said income growth was helped by large increases in farm income in Iowa, Minnesota, Arizona and Louisiana.

Iowa and Minnesota rebounded from serious crop losses in the second half of 1993 that were caused by major flooding in the Midwest.

Increases in federal subsidy payments to cotton farmers in Arizona and cotton and rice farmers in Louisiana boosted income in those two states.