Maine ranked in the top 10 among U.S. states with sharp gains in personal income in the first three months of this year, but that’s likely to decline as federal pandemic benefits taper off, a new study found.
Multiple rounds of relief programs boosted personal income to record highs in more than half of U.S. states, and earnings edged up in most states, according to a Pew Charitable Trusts study released Wednesday.
However, that rise will be temporary as federal unemployment benefits end, including Saturday’s conclusion of the $300 weekly bonus through the latest $2.9 trillion stimulus bill. Maine’s “Back to Work” program, which offered up to $1,500 to help employers attract workers, ended on Aug. 20.
Personal income in Maine adjusted for inflation rose 18.2 percent from January through March of this year compared to the same time last year, according to Pew. That’s 9th among U.S. states and well above the 14.4 percent national average. Before the pandemic, Maine’s personal income growth was only 1.4 percent on average from the last three months of 2007 through the same months in 2019.
Personal income includes paychecks, Social Security benefits, employers’ contributions to retirement plans and health insurance, income from rent and other property and public assistance benefits. It does not include capital gains such as stock investments. Federal officials use state personal income to allocate support for programs including Medicaid, while state governments use the information to project tax revenue and estimate public services costs.
Personal income from earnings, including work wages and extra compensation such as employer-sponsored health benefits, also increased in most states. Maine’s earnings rose 3.95 percent in the first three months of this year compared to the same time last year.
It benefited from the sharp increase in government assistance, up 74 percent annually when comparing the first three quarters, according to Pew. Without that, personal income would have grown by just over 2 percent.
With pandemic-related assistance set to decline significantly from April through June, personal income also will drop significantly compared to the first three months of this year, according to the U.S. Bureau of Economic Analysis.
At the same time, Maine’s unemployment claims have plummeted. About 900 people filed an initial claim or reopened their unemployment claim for the week that ended Aug. 28, the Maine Department of Labor said Thursday. That’s almost 300 fewer claims than the week before and the lowest total since COVID-19 restrictions went into effect in March 2020.