Personal income grows at fatest rate during recession

The increase was the biggest in the Buckeye State since 2006, when personal income rose 4.8 percent from the year before to about $390 billion, according to government statistics.

Ohio’s personal income was $37,791 last year, up 4.5 percent from 2010. Ohio ranked 33rd in the nation on a per capita basis.

“When you look at the numbers, this is a comprehensive measure of income,” said bureau economist David Lenze. “Many people are retired, receiving Social Security, and many people are wealthy, receiving dividends and interest. This is a comprehensive measure of what’s available to all of the residents of the state.”

Nationally, personal incomes grew by an average 5.1 percent last year to just less than $13 trillion. Most states saw improvement, ranging from 3.4 percent growth in Maine to 8.1 percent in North Dakota.

Experts caution, however, that the personal income figure doesn’t account for inflation and shouldn’t be confused with real weekly and hourly wages, which factor in the rising costs of food, fuel and other commodities.

Inflation, which rose by 2.5 percent last year, reduces discretionary spending and the demand for goods and services that propels the economy and drives job growth, said Rudy Fichtenbaum, a labor economist as Wright State University.

“If it’s a real increase in income, then I think that’s going to matter,’’ Fichtenbaum said. “But if it’s just a matter of personal income being back to where it was before the recession in nominal terms, I don’t know that that’s particularly meaningful.

“If people’s real income is not up, then the real amount of goods and services that they can buy is still going to be less, and therefore production is going to be less and employment is going to be less.’’

Still, without the impact of inflation, earnings grew an average of 4.4 percent last year and bounced back to pre-recession levels or reached new post-recession peaks in 45 states, the bureau reported.

In Ohio, total earnings — including wages, salaries, benefits and income for business proprietors — rose 4.3 percent to about $317 billion from 2010 to 2011.

Earnings were up in all private industries in Ohio last year, with earnings from manufacturing contributing the lion’s share to the growth in personal incomes.

Contact this reporter at (937) 225-2437 or rtucker@DaytonDailyNews.com.