Wage slump felt in Arizona

PHOENIX - The growth in per capita income of residents of most Arizona communities is lagging the rest of the nation.

New figures from the U.S. Bureau of Economic Analysis show per capita income nationwide grew at a rate of 5.2 percent from 2006 to 2007. For major metropolitan areas the figure was slightly less, at 5.1 percent.

But among such communities in Arizona, only Flagstaff beat that with a 6.8 percent increase.

The Phoenix metropolitan area - defined by the government as all of Maricopa and Pinal counties - posted just a 2.3 percent hike.

That's less than half the year-over-year increase between 2005 and 2006 which also was below the national average.

Pima County did a little better at 4.4 percent, with a 4.2 percent increase for Yavapai County 4.0 percent for Yuma County and 3.3 percent for Mohave County.

The BEA reports that the five fastest growing areas are in Louisiana and Mississippi.

Part of that, the agency reports, is because the figures include federal assistance for homeowners to rebuild after Hurricane Katrina in 2005. And two Mississippi communities benefitted from increased shipbuilding activities and casinos.

At the other extreme, four of the slowest growth areas were in Florida, with two in Michigan.

In pure numbers, the BEA figures peg the per capita income for the Phoenix area at $35,010 a year. That figure is based on dividing total personal income from all sources by the number of residents.

Even with the anemic year-over-year change, that still left the area with the 140th highest per capita income of all metropolitan areas in the nation. But it is a slide from 123rd in 2006 - and 118th in 2005.

Pima County slide from 193 on the list to 197 with its $32,807 per capita income figure.

By contrast, the better-than-average income growth rate for the Flagstaff area - defined as Coconino County - meant that its rankings went from 231 in 2006 to 221 last year.

Pati Urias, spokeswoman for the state Department of Commerce, said the slow year-over-year change in Arizona communities is not a surprise given the state's dependence on growth - and housing for those new residents as an economic engine.

"Many of the strides that have been made in income growth have been offset by the job losses in construction and housing-related sectors,'' she said. "So, yes, the housing bust is largely to blame, and the result is the domino effect this is having on the remainder of the economy.''

Some of that is borne out in gross income figures.

For example, residents of the Phoenix area collected more than $9.7 billion in 2006 from construction wages. That shrank to less than $9.5 billion last year.

But the overall wages paid to the state, what with the number of people living and working here continuing to increase, rose from nearly $99 billion to more than $103 billion. That includes more salaries being paid in the hospitality industry as well as government employment.

Urias said, though, there is little sign that things are improving in the short term.

"Keep in mind that we are now also having to deal with increased fuel and food prices,'' she said.

"Even though fuel is dropping slightly right now, gas prices are still higher than they were a year ago,'' Urias continued. "This will become even more evident when the complete numbers for 2008 are tabulated.''