Per capita income in Tennessee grew only two-thirds as fast as in the rest of the country during 2007 and remained nearly 14 percent below the U.S. average, the government reported Wednesday.
The U.S. Bureau of Economic Analysis said Tennessee trailed only Arizona in per capita income growth for all of 2007. Tennessee was dead last among the states in personal income growth in the fourth quarter, government figures show.
“It’s really disheartening because we trailed the rest of the country in all components of personal income,” said Matt Murray, associate director of the Center for Business and Economic Research in Knoxville.
Per capita income from wages, profits, dividend and interest income grew 3.4 percent in Tennessee to $33,280 and increased by 4.2 percent in Georgia $33,457 last year. Both states trailed the U.S. growth rate in 2007 of 5.2 percent and remained well below the U.S. per capita income level of $38,611.
“Our population growth remains above average but personal income was below most states,” said David Penn, a Middle Tennessee State University economist. “Unfortunately with the economic slowdown this year, it could be even worse in 2008.”
Dr. Murray said Tennessee had been closing its historic earnings gap with the rest of the country during the 1970s, ’80s and ’90s.
“But Tennessee has trailed the U.S. average every year since 2003,” he said. “We have a less educated work force overall and that tends to limit income gains.”
Tennesseans, on average, gainED ground in the battle against inflation, which rose at a 2.8 percent rate last year. But the Volunteer State was hurt by the continuing drop in manufacturing jobs, which are down by more than 250,000 since 1994, according to the Bureau of Labor Statistics.
Tennessee AFL-CIO President Jerry Lee said the drop in better-paying factory jobs and the state’s lower rate of unionization keep wages lower than in other states. Last year, 6.4 percent of Tennessee workers were represented by a labor union, or about half the U.S. rate of 12.4 percent, according to the U.S. Bureau of Labor Statistics.
“When you have collective bargaining agreements, workers make more money,” Mr. Lee said.
