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.
Incentives don't always lead to job creation
“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.”
Many Ohioans still struggling despite low unemployment
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.”
Gov. Kasich warns of recession
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).