The States With the Strongest Personal Income Growth
In this April 23, 2020 file photo, President Donald J. Trump's name is printed on a stimulus check issued by the IRS. Later rounds of the payments helped boost personal income in 2021. AP Photo/Eric Gay, File
Pandemic relief spending by the federal government contributed to historic gains in the amount of money Americans collected during the first quarter of the year.
Federal pandemic aid fueled historic increases in personal income across the U.S. during the first quarter of this year, according to an analysis from The Pew Charitable Trusts.
The report, released this week, shows that nationwide personal income grew by 14.4% in the first quarter of 2021, compared to the same three months last year. That's the largest year-over-year growth rate on record, based on statistics that go back to 1948.
Between states, year-over-year income growth for the quarter ranged from nearly 20% in Utah to 9.4% in Wyoming. The states checking in just behind Utah, with the strongest growth, were Idaho (19.4%), West Virginia (19.2%), Michigan (19.1%) and Mississippi (19.1%).
Connecticut and New York joined Wyoming at the bottom of the pack, both with 9.5% growth rates.
Twenty seven states had their greatest year-over-year growth on record, the report says.
The January to March timeframe was when many Americans received one-time stimulus payments up to $600 and $1,400 from the federal government as part of coronavirus relief laws that Congress approved. Meanwhile, the federal government also poured money into expanded unemployment benefits, which are now winding down.
"The injection of federal aid will provide only a temporary boost, however, as pandemic-related assistance is set to decline significantly in the second quarter," Pew's research brief says.
The billions in federal pandemic relief funding that flooded the economy over the past 18 months is widely credited with not only propping up struggling households and businesses, but also helping states to avoid worse damage to their revenues and budgets.
While some applaud the federal aid, saying it helped the nation avoid a worse economic rut due to Covid-19, others have questioned whether all the spending was necessary and if some money went to households, businesses and governments that didn't really need it.
Although government assistance was a major factor behind the income gains, Pew's research notes that Utah and 30 other states would have seen growth even without the windfall of aid.
At the same time, however, "19 states would have experienced declines in total personal income if all sources of government assistance were excluded, although more than half of those would have incurred only slight declines of less than 1%," the report says.
Personal income includes wages, government benefits, retirement account contributions and other income, like collected rent. Capital gains are not included.
A full copy of Pew's report with the full 50 state personal income rankings for the first quarter can be found here.
Bill Lucia is a senior editor for Route Fifty and is based in Olympia, Washington.
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