GETTING RICHER; CALIFORNIANS' INCOME SHOWS 4.7% GAIN.
After years of recession, Californians have a lot to feel better about economically - they have more money.
In a report underscoring this most basic economic fact, the federal government announced Monday that per capita personal income - or average income per person - in California rose to $26,570, a 4.7 percent gain from 1996.
That meant state residents saw 2.7 percent more purchasing power last year because growth of income was more than double the inflation rate, which was 2 percent nationally and 2.2 percent in the state. Californians' gain in purchasing power was also about double that of a typical year.
Despite the increases, California posted only the 13th-highest per capita income nationally for the second year in a row. Connecticut led in both years with income rising to $36,263 from $34,174 in 1996 for a gain of 6.1 percent - the fastest growth rate in the nation. Nationally, income grew 4.8 percent.
The positive numbers reflected a bullish attitude among local business people.
Sanford Paris, owner of Paris Industrial Parks in Encino, said consumers' increased purchasing power was a key factor in 15 percent growth in his company's profits last year, along with a recovering real estate market.
``Nineteen ninety-seven, we're in heaven. Nineteen ninety-eight should be great,'' said Paris, whose firm builds and leases industrial buildings.
Jeri Gerner, co-owner of executive search firm Rovner Gerner & Associates in Woodland Hills, also said her business is booming due to a surging economy. ``We had a good year and this year should be even better,'' she said. ``Employers have retrenched and are hiring again. It's a tight labor market.''
Gerner said profits at her 3-year-old company jumped 10 percent last year.
Ted Gibson, chief economist for the California Department of Finance in Sacramento, noted last year's 2.7 percent gain in Californian's purchasing power is well above typical gains of 1 percent to 1.5 percent. And that leads to a simple conclusion, he said: ``People are actually able to buy more with their income.''
California's economy, which suffered through a massive recession during the early 1990s, has turned around in recent years due to improvements in a wide variety of sectors, including high-tech, real estate, entertainment and manufacturing.
Nationally, average income for America's 267.6 million residents rose 4.8 percent to $25,598, a moderate improvement over the 4.6 percent increase in 1996. But with inflation falling from 2.4 percent in 1996 to 2 percent last year, Americans' purchasing power has improved significantly.
Gibson also pointed out that Californians are probably doing better than the government's figures reflect and predicted that the state's 1997 income level is likely to improve when the Commerce Department revises the figures in August. He estimated that Californians' per capita personal income for 1997 will be upgraded to a 5.4 percent increase at that point.
The higher numbers should result because the federal government was not using 1997 fourth-quarter figures for this report, Gibson said, noting that stock options and bonuses typically are given in the fourth quarter. Stock options, which are counted as part of personal income, are particularly popular in the Silicon Valley, he added.
``We've had a history of upward revisions in California,'' Gibson said. ``We think their numbers are $20 billion too low for total personal income.''
Total personal income for the state reached $857 billion last year.
Growth in personal income took place in all regions last year. After Connecticut's leading 6.1 percent gain, the best rates came in Texas, 6 percent; Massachusetts, 5.8 percent; Washington, 5.7 percent; Oregon, 5.5 percent; Kansas and Utah, 5.4 percent; New York, 5.2 percent; Colorado, 5.1 percent, and Oklahoma, 5 percent.
The stock market's stunning gains helped produce gains in states such as Connecticut, Massachusetts and New York. Massachusetts, Texas, Utah and Colorado benefited from improvements in the high-tech sector, while Washington and Kansas were helped by aerospace orders to Boeing Co., a major employer in both states.
The only laggard performances came from farm states suffering from low commodity prices.
North Dakota posted a decline of 1 percent in per capita income and its ranking fell to 38th in 1996 to 45th in 1997. Other states with slow per capita income growth were Hawaii, 2.4 percent; Nevada, 2.8 percent; Alaska, 2.9 percent and Idaho, 3.1 percent.
California ranked 13th among states in per-capita income in 1997
1. Connecticut $36,263
2. New Jersey 32,654
3. Massachusetts 31,524
4. New York 30,752
5. Delaware 29,022
6. Maryland 28,969
7. Illinois 28,202
8. New Hampshire 28,047
9. Colorado 27,051
10. Minnesota 26,797
13. California 26,570
50. Mississippi 18,272
Source: U.S. Commerce Dept.
BOX: SURGING INCOMES (see text)
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|Publication:||Daily News (Los Angeles, CA)|
|Article Type:||Statistical Data Included|
|Date:||Apr 28, 1998|
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