Personal income in Montana rose an average of 5.1 percent in 2011, mirroring the national average, according to figures released recently by the U.S. Bureau of Economic Analysis (BEA).
But while Treasure State residents have moved up a notch or two on the economic ladder, officials say Montanans still have a way to go to rub elbows with residents of more affluent states.
Also, per capita personal income, which is personal income divided by population, rose 4.3 percent in Montana from 2010 to 2011 from $35,053 to $36,573, BEA officials said. Montana ranked 35th in the nation (36th if you include the District of Columbia), for per capita income dollars, with 15 other states reporting lower income.
“That’s the highest I have ever seen it,” House Speaker Mike Milburn, R-Cascade, told Montana Watchdog about the ranking. “That’s good news or bad news — either we’re coming up or they are coming down.”
This comes as good news to Barbara Wagner, the state’s senior economist, who says in the past decade Montana has climbed from 45th place.
“We’ve grown a lot,” she said, adding Montana ranked eighth in terms of growth since 2001.
But Wagner, like others, would like the state to be higher.
The BEA defines personal income not only based on wages, but from all sources.
“Personal income is the sum of net earnings by place of residence, property income and personal current transfer receipts,” the BEA states in its “State Personal Income 2011” report.
The state personal income gains come after rising 3.7 percent in 2010, the BEA reported. In the latest statistics, state personal income growth ranged from a low of 3.4 percent in Maine to a high of 8.1 percent in North Dakota.
According to BEA data, North Dakota ranked ninth nationally ($45,747) for per capita personal income. Idahoranked 49th ($33,326) and had its personal income grow 5.4 percent, South Dakota ranked 21st ($41,590) and grew by 6.2 percent, and Wyoming ranked sixth ($47,301) and had its personal income grow by 5.9 percent.
Overall, the state had a personal income of $36.5 billion in 2011, up 5.1 percent from $34.7 billion in 2010, the BEA found.
Jon Bennion, government relations director with the Montana Chamber of Commerce, said personal income would rise more if more of an effort was made to bring high-income industries to the state.
“If we can get more coal, oil and more natural resource and manufacturing jobs on line, then Montanans will benefit,” he said.
Bennion noted that even though changes have been made to the state’s workers’ compensation system, in which Montana rates were ranked highest in the nation, the costs are still high.
“We still have high rates and many employers have a limited pool for labor costs,” he said. “And if those get eaten up by the benefits mandated, then that is less money for salaries.”
He said as workers’ compensation costs business equipment taxes decrease, businesses will have more money to turn over to employees.
He said Montana at one time was among the top states in terms of personal income.
But over the years the state has seen fewer jobs in industries such as mining, timber and energy sectors and seen the average salary go down to the national norms.
He was heartened by the fact Montana had moved up the scale, albeit it was still on the lower end.
Wendy Stock, head of the Department of Agricultural Economics and Economics at Montana State University, said the news was a bit of a stalemate.
“The increase in personal income for the U.S. overall was 5.08 for the same time period, so one could view the Montana increase as neutral (i.e., we did not better or worse than the rest of the country),” she told Montana Watchdog in an e-mail. “So we would need to have larger earnings gains in order to move up …”
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