Georgians' incomes rise while jobs evaporate
At first it makes sense: people who draw paychecks lost ground in Georgia during the third quarter, according to a federal report issued Thursday.
Not too surprising.
During the three months that wages and salaries slipped at a 0.1 percent pace, the state’s unemployment rate climbed to double digits and 145,000 people filed for jobless benefits.
But in its report, the Bureau of Economic Analysis said that the big number points in a different direction: total personal income surged three times as fast as pay dropped.
“It’s a difficult concept to grasp, given the backdrop of everything that has been reported about the economy,” said Matthew von Kerczek, spokesman for the BEA. “It is hard to get a sense of how many people are unemployed from these numbers.”
The disconnect comes because of what is included in income, he said.
The loss of paychecks was counterbalanced by what are called “transfer payments.” They include unemployment benefits, food stamps and welfare payments, as well as Medicare and Medicaid reimbursements and subsidies for laid-off people buying health insurance, courtesy of the federal stimulus package.
“On the one hand, people are losing their jobs. On the other hand, some of the lost income is being offset," said von Kerczek. "If you look at the federal budget, those transfer payments are a really big chunk.”
Nationally, transfer payments account for about $2 trillion a year.
Georgians received transfer payments at a $731 million-a-year clip, which accounts for most of the $981 million increase in personal income during the three months.
The BEA report ranked Georgia right in the middle of the national pack: Growth of the state’s overall income was the 25th best in the country.
That is an improvement from last year, when the state was 41stst. However, the state has ranked much higher in past years: 10th in 2005 and 2000, sixth in 1999 and 12th in 1998.
About the Author
Michael E. Kanell, the AJC's economics writer, has been reporting on jobs, housing and the economy at the AJC for nearly two decades. He has appeared on television and radio to analyze and report on business and economic developments.
