The year 2009 was an annus horribilis for American workers, a new report from the Bureau of Economic Analysis shows, and in almost every city — almost. Personal income declined in more than two-thirds of American metropolitan areas, and only when counting unemployment benefits. Without government transfers, personal income only rose in 57 of 366 metropolitan areas. And in that 57, only five urban areas saw personal income gains from increased activity in the private sector.
The rest? Well, let’s just say that government work was a growth industry in the Obama administration. In fact, only three metropolitan areas of more than 1 million people saw an increase in personal income in 2009. Want to guess what one of them was?
Among the 52 MSAs with a population of one million or more, only three had an increase in both net earnings and personal income in 2009 (Washington, D.C.; San Antonio, Texas; and Virginia Beach, Virginia). The biggest gains in compensation in these three MSAs were in the federal government (civilian and military combined). Private sector compensation declined in these three MSAs.
As for the rest of the nation …
Personal income declined in 2009 in most of the nation’s metropolitan statistical areas (MSAs), according to estimates released today by the U.S. Bureau of Economic Analysis. Personal income declined in 223 MSAs, increased in 134, and remained unchanged in 9 MSAs. On average, MSA personal income fell 1.8 percent in 2009, after rising 2.7 percent in 2008. …
Although personal income grew in 134 MSAs, in most cases this growth represented an increase in transfer receipts (unemployment insurance benefits, for example). Only in 57 MSAs did the net earnings of workers increase in 2009. In most of the 57 MSAs where net earnings increased, the gains were concentrated in the government sector. Military earnings growth was particularly strong in seven of the ten MSAs with the fastest personal income growth in 2009: Jacksonville and Fayetteville, North Carolina; Manhattan, Kansas; Elizabethtown, Kentucky; Lawton, Oklahoma; Clarksville, Tennessee; and Killeen, Texas.
Only five MSAs did the growth come primarily from the private sector:
Only in five MSAs (Kennewick, Washington; Cumberland, Maryland; Morgantown, West Virginia; Cape Girardeau, Missouri; and Ithaca, New York;) did the private sector account for most of earnings growth in 2009.
24/7 Wall Street concludes:
The average citizen is likely to look at these Commerce Department numbers and wonder where his tax payments are going. It would appear that some of that money has gone to increase the pay of the government’s workforce during what is supposed to be a period of federal austerity. The opposite is true. Perhaps it requires more, better-paid people to run all the government’s stimulus packages.
Small wonder Joe Biden and Barack Obama keep talking about “Recovery Summer.” In Washington DC, boom times have arrived. In that Beltway bubble, floated by taxpayer dollars from everywhere else that income is falling, the economy looks pretty darned tasty — as long as the electorate doesn’t send a new Congress to Capitol Hill to stop the gravy train.