Wages, Salary Increases Help Drive Income Growth
PHOENIX — Personal income in Arizona rose last year at a rate faster than nearly any state in the country, according to new estimates from the Bureau of Economic Analysis. With a personal income growth rate of 8.4%, Arizona tied with Montana for the fastest rate of growth in personal income in 2020.
“Throughout the pandemic, we’ve sought to stretch and strengthen the social safety net to protect people out of work due to no fault of their own,” said Governor Doug Ducey. “We’ve also adopted a commonsense approach that prioritizes peoples’ health while keeping our economy open. As a result, Arizona’s economy is on the rise, providing higher wages and more opportunities to our citizens. We’ve got more work to do, including continuing to get the vaccine out quickly and equitably. That effort is at the top of our to-do list and will continue to be our focus as we bounce back from the pandemic.”
To see a snapshot of the latest Arizona economic statistics, click HERE.
In all states, increases in “transfer receipts,” a term used to describe money from government sources, were the leading contributor to personal income growth. These increases reflected relief payments provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, state unemployment benefits, and other pandemic-related programs.
In Arizona, however, that wasn’t the only driver of income growth. Arizona was one of just a handful of states also to see a substantial increase in 2020 in “net earnings,” which includes wages, salaries, and proprietors’ income. Net earnings in Arizona rose by 3.5% last year, well above the national average of 0.3%, and the 5th fastest net earnings rate of growth. More than half of states saw net earnings decreases last year.
“Arizona’s business owners and employees went above and beyond last year to protect public health and continue to serve their communities,” said Sandra Watson, President and CEO of the Arizona Commerce Authority. “As a result, we continue to see opportunity growing throughout our state, with higher earnings for workers. Arizona is poised to continue leading the nation in economic momentum in the months and years ahead.”
In addition, the Arizona Office of Economic Opportunity in February released a report projecting strong job growth in the state over the next two years, with the largest gains happening in sectors hit hardest by the pandemic.