Isle income
growth rate hits
8-year high

State residents still are in the
bottom 10th of U.S. states despite
a 4.8% rise last year

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From staff and wire reports

Hawaii residents trailed the most of the nation in income growth during 2000, though the earnings increases still topped inflation.

Hawaii had an income growth rate of 4.8 percent last year -- it's fastest since 1992 -- but in the bottom 10th of U.S. states, according to the U.S. Commerce Department. Hawaii's income growth was on par with West Virginia and above Alabama and Mississippi, but well below nation-leading California and Colorado. Hawaii's income growth rate has not topped the national average since 1993.

Americans' incomes rose faster than inflation in every state in 2000, even though the mainland economy slowed dramatically in the second half of the year. Residents of Colorado enjoyed the fastest income growth, while incomes grew the slowest in Alabama.

Hawaii's income growth for 2000 picked up significantly from previous years. In 1999, the incomes of state residents grew 2.6 percent, which was still an improvement over 1999's anemic 1.9 percent. Statewide inflation remained low through the second half of 2000, at 1.7 percent, according to the state Department of Business, Economic Development and Tourism.

Nationally, average income for America's 281.4 million people last year was $29,676, up 7.3 percent from 1999, the quickest pace in 11 years, but the national average covered a wide variation in state performances, the Commerce Department reported Tuesday.

By state, residents in Colorado had the sharpest income gain last year, rising 10.8 percent. Stronger earnings from service-sector jobs, including construction and transportation , were a big factor.

Other states in the top five of income growth were: California, 10.5 percent; Massachusetts, 9.9 percent; New Hampshire, 9.5 percent; and Idaho, 9.3 percent. Increased earnings from service jobs and in high-tech manufacturing were major contributors to the advances.

In contrast, income growth was the slowest in Alabama, up 4.0 percent, as earnings fell for farm and mine workers.

States ranking the lowest in income growth included, in addition to Hawaii: Mississippi, 4.3 percent; Louisiana, 4.4 percent; and West Virginia, 4.8 percent.

Connecticut, which saw incomes rise by 6.3 percent, held onto the top spot as the state with the highest level of per capita income at $40,640. Mississippi retained its position as the state with the lowest level of income at $20,993. Hawaii posted $28,221, slightly below the national average, and fell out of the top 10 states.

"The most important determinate of income growth is jobs," said Richard Yamarone, economist with Argus Research Corp. "Income growth was so strong last year because unemployment rates -- for the nation and for many states -- were so low."

The national inflation rate, as measured by the government's price index for personal consumption expenditures, was 2.4 percent in 2000. Factoring that in, Americans' buying power -- per capita income growth after inflation -- jumped 4.9 percent.

All 50 states and the District of Columbia had income growth rates that outpaced the 2.4 percent inflation rate.

During the first half of 2000, the economy was red-hot, growing at an annual rate of 5.2 percent. That growth pulled the nation's unemployment rate down to a 30-year low of 3.9 percent during three months of last year. But in the second half of 2000 the economy slowed sharply, growing at an annual rate of just 1.6 percent.

The unemployment rate, now at 4.3 percent, is expected to rise in the coming months. Given that, many economists believe that income growth in 2001 won't be as strong as in the past couple of years.