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Washington leads the U.S. in personal income growth. Here's what that means for you

According to the Federal Bureau of Economic Analysis (BEA), personal income in Washington state increased by 4.8 percent in 2017 — the largest percentage increase in the nation — while the state saw the second-largest earnings increase.
According to the Federal Bureau of Economic Analysis (BEA), personal income in Washington state increased by 4.8 percent in 2017 — the largest percentage increase in the nation — while the state saw the second-largest earnings increase. McClatchy

The Evergreen State earned even more green in 2017, but that doesn't necessarily mean there's all that much more money in your household's bank account.

According to data released by the Federal Bureau of Economic Analysis last month, personal income in Washington state increased by 4.8 percent from 2016 to 2017 — the largest percentage increase in the nation.

Washington's income growth was strong in most industries, but particularly in construction (up 9.1 percent), retail trade (up 15.3 percent), information services (up 8.9 percent) and accommodations and food services (up 8.9 percent), according to Scott Bailey, a regional economist for the Washington state Employment Security Department.

"The state continued to be in a construction boom in 2017," Bailey said. "Amazon was growing very rapidly; software and telecom were doing well; and with increased incomes, people were traveling and going out to eat more often."

Personal income in the United States increased by 3.1 percent in 2017, after seeing a 2.3-percent rise in 2016, according to estimates by the bureau. Personal income is the sum of income from earnings, investments and "transfer payments," such as Social Security, Medicare, Medicaid, unemployment benefits and Temporary Assistance for Needy Families (welfare).

States seeing the largest increases were clustered in the western third of the country, as Idaho (4.7 percent increase), Nevada (4.4), Utah (4.4), Arizona (4.3), California (4.1) and Colorado (4.1) occupied the six spots after Washington. Even Oregon (3.3) and Montana (3.0) showed strong growth in a year when North Dakota (negative 0.3 percent) was the only state in the nation to show a decrease. Those numbers do not factor in the 1.1 percent adjustment for inflation from 2016 to 2017.

In terms of earnings — or just wages and salaries — Washington saw a 5.2-percent increase, which was second in the nation behind Idaho's 5.3-percent increase.

Personal income in Washington grew from $397.8 billion in 2016 to nearly $418.8 billion last year, according the the agency, while earnings in the state increased by $13.1 billion in 2017.

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While having the largest personal income growth in the nation and the second-highest earnings increase is all well and good, we shouldn't get carried away. Part of the reason those numbers grew was an increase of the state's minimum wage to $11 per hour in 2017 — a number that has since climbed to $11.50, the second highest in the nation behind Washington D.C. ($12.50).

Washington's population also grew by an estimated 117,743 people in 2017, according to the U.S. Census Bureau, meaning there was a larger work force.

"Along with growth in total personal income (the 4.8 percent), economists look at the change in per capita income," Bailey said. "When adjusted for population growth, Washington's per capita income grew by 3.0 percent — not quite the fastest in the country. California, West Virginia and Hawaii (all) had slower growth in total income but much slower growth in population, and so had faster growth in per capita income."

Washington's per capita income in 2017 was estimated by the bureau to be $56,283, which ranks ninth nationally behind No. 1 Connecticut ($70,121), Massachusetts, New Jersey, New York, Maryland, California, New Hampshire and Wyoming.

So what does it all mean here in Whatcom County?

Though all the numbers are not in for 2017, Bailey said, Whatcom's population growth matched the state, but the county's 2.2 percent unemployment growth was slightly behind the state's 2.5 percent growth. Whatcom's average wage also has been growing slower than the rest of the state.

"My guess would be that Whatcom's per capita income will continue to grow at a slower pace than the state," Bailey said. "From 2012 to 2016, for example, Whatcom's per capita income (after adjustment for inflation) grew by 5 percent, while the state increased by 10 percent. More rapid growth in the average wage had a lot to do with that disparity."

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