Most Ohioans saw their personal incomes grow last year, but the value of all income received in the state still lagged the national average, according to the latest government report.
Personal income totaled $521.2 billion in Ohio in 2016, up 3 percent from $506 billion in 2015, according to data released earlier this week by the U.S. Bureau of Economic Analysis (BEA). By comparison, total U.S. personal income grew 3.6 percent to just over $16 trillion during the same period.
On a per capita basis, Ohio ranked 31st for personal income at $44,876, on average, for each person living in the state, according to BEA. That was well below the national per capita personal income average of $49,571. Connecticut ranked No. 1 for per capita personal income at $71,033. Mississippi was last at $35,936.
The BEA defined personal income as the sum of net earnings by place of residence, property income, and personal current transfer receipts — such as Social Security payments and other government assistance benefits.
State personal income growth ranged from 1.7 percent in Wyoming to 5.9 percent in Nevada. Ohio ranked No. 31 for total personal income growth, which jibes with earlier reported wage and salary data from the Bureau of Labor Statistics, and underscores the sluggish pace of the economic recovery in Ohio, compared to the nation as a whole.
“Ohio not only has slower earnings growth, but also slower job growth than the nation, and it’s getting worse,” said Michael Shields, a researcher at the left-leaning Policy Matters Ohio in Cleveland. “Last year, jobs grew (at an annual rate) of just 0.9 percent, compared with 1.6 percent for the U.S.”
In addition to throwing a wet blanket on hiring, slow-growing incomes also stymie consumer spending, which accounts for more than three-quarters of all economic activity in the U.S. Coupled with cut-backs in government spending in Ohio, the personal income data indicates a lackluster economic outlook for state, according to Shields.
“Families need the income to spend in consumer markets, but government spending is also a key driver of growth,” he said. “It’s an essential piece, because government has the resources to invest in things we all need, like quality schools, good roadways, and safe water.”
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Personal income includes proceeds from investments, business ventures and other sources, but earnings from work continue to account for the the biggest share.
Net earnings in Ohio also grew at a slower pace than the U.S. rate, increasing 3.62 percent last year, compared to a 4.06 percent increase for the U.S. overall.
Still, there was some good news in the earnings data, which belied Ohio’s reputation as a low-wage state.
The sectors that saw the highest earnings growth in Ohio last year were high-wage industries, including finance and insurance (up 6.13 percent); professional scientific and technical services (up 5.77 percent); and health care and social assistance (up 5.22 percent).