With nearly one in every five Americans out of work sometime during the past year, personal income fell last year for the first time in 60 years.
The average Tennessean earned $744 less in 2009 than he or she did the previous year, according to a new government report. The income drop was even greater in Georgia, where per capita income fell by $1,063, according to the U.S. Bureau of Economic Analysis.
"The last time we had a decline in personal income was in 1949," said David Lenze, a spokesman for the bureau.
Widespread unemployment is the main reason for the drop, said Mark Vitner, a senior economist for Wells Fargo Bank in Charlotte, N.C.
"Unemployment has remained so high for over the past year that 19.5 percent of all workers have been without a job at one time or another in the past year," he said.
Many of those still on the job worked fewer hours or took home less in commissions, bonuses and, in some instances, hourly wages, he added.
The income loss would have been far greater were it not for a jump in government assistance for unemployment benefits, Social Security and government health care programs, figures show.
Last year, government assistance rose 11.2 percent in Tennessee and nearly 12.7 percent in Georgia, offsetting the 4 percent drop in net earnings and the 7 percent decline in dividend income during the year.
Among the 50 states, personal income fell in 42 states, figures show.
Georgia had the 15th-biggest drop in per capita income during 2009, reflecting how the economy of the Peach State has suffered from the housing slump. Atlanta was once the leading housing market in the country, and much of Northwest Georgia is dependent upon the carpet and floorcovering industry, which was crippled by the plunge in residential and commercial construction.
"Georgia is dependent upon the housing market more than most states, and that has been among the hardest-hit parts of the economy," said Rajeev Dhawan, director of economic forecasting at Georgia State University.
High unemployment
Over the past two years, 37 Georgia banks have failed and employment in Georgia has dropped by 8 percent, exceeding the U.S. average job loss of 6 percent since the end of 2007, Dr. Dhawan said.
Because of the depth of the recession, Mr. Vitner said income and home values won't return to prerecession levels for many Americans for several more years.
"The silver lining is that economic activity does appear to have picked up late last year and we should see income growth again in 2010," he said. "But it will be slower than most recoveries, and it will take years to recover all of the losses from this recession."
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