California in Top 10 for ’95 Income Growth

After five years of economic weakness, personal incomes in California shot up 6% in 1995, putting it in the top 10 for income growth along with four other Western states.

At the other end of the scale, South Dakota and North Dakota ranked last. Because of a precipitous drop in farm incomes, per-capita incomes actually fell by 0.3% in South Dakota and rose a barely perceptible 0.3% in North Dakota.

Nationally, per-capita incomes increased by 5% in 1995, the best performance since a 5.5% rise in 1990, according to a report released Thursday by the Commerce Department.

California’s per-capita income was $23,699. Nevada’s was $25,013--seventh in the nation and highest among the Western states.

While many Western states have been doing well for some time, California has been in the doldrums since the 1990-91 recession. Per-capita income increases in the state were up just 2.1% in 1994 and 1.1% in 1993, far below the rate of inflation during those years, meaning Californians’ buying power was falling behind.

But analysts said California is showing benefits from the weaker dollar, which helped lift America’s exports last year, especially to Asia.

“The depression times are over for California and the good times are back,” said Allen Sinai, economist at Lehman Bros. in New York. “California is our No. 1 exporting state, and the economic growth in Asia is benefiting trade and tourism in the state.”

Analysts said the rise in exports was helping to boost employment as well as incomes in California.

“Currently, employment in California is growing faster than the national average, something that hasn’t occurred since 1990,” said Paul Getman, an economist at Regional Financial Associates, an economic consulting firm in West Chester, Pa., that specializes in state economic analysis.

Getman said other Western states had in some ways benefited from California’s problems in the early 1990s as laid-off workers in defense and other industries traveled to neighboring states to look for work.

Outside the West, the big gainers were scattered across the country, with Louisiana posting the biggest increase of any state, a rise of 6.9%.

But by region, the West was the clear standout, with per-capita incomes up 6.6% in Arizona, 6.2% in Oregon, 6.1% in Utah and 6% in California and New Mexico. Nevada trailed the other Western states but not by much, coming in at 21st in the nation with a 5% gain.

As usual, the state with the highest per-capita income was Connecticut, at $30,303, an increase of 4.3% last year. Mississippi again ranked as the state with the lowest per-capita income, at $16,531, an increase of 4.7% from 1994.

The four other states in the top 10 in income growth were Michigan, New Hampshire and Rhode Island, all with gains of 6.2%, and South Carolina, with an increase of 6.1%.