According to a recent nationwide study, Alabam’s personal income was 3 percent higher in the second quarter of this year than it was before the COVID-19 pandemic.
Researchers at the Pew Charitable Trust found that personal incomes of people in the United States rose after the pandemic, thanks in part to federal COVID aid.
Alabama’s 3 percent growth, however, was less than that of neighboring states. Georgia grew 5 percent, Mississippi grew 4.3 percent, and Tennessee grew 3.3 percent, according to the study, which adjusted these personal incomes for inflation.
“Countries with the highest personal income increases since the pandemic have benefited not only from state aid payments – including additional aid payments as well as from social security, Medicare and Medicaid, safety net programs and state unemployment insurance – but also from relatively strong income growth,” says the study.
Personal income includes paychecks, social security benefits, employer contributions to retirement and health insurance, rental income, and Medicare and Medicaid benefits.
However, the state’s total personal income has declined from last year to this year. Nationally, personal income fell 2.8 percent from the second quarter of 2020 to the second quarter of this year.
Alabama’s personal income from the second quarter of 2020 through the second quarter of this year declined 5 percent, a larger decrease than neighboring Georgia’s 2.5 percent but slightly lower than Mississippi’s 6.4 percent.
“Every state with the exception of California recorded at least a slight decrease in total income after accounting for inflation compared to the unusually high values in the second quarter of 2020,” the report said. “States suffered the losses even though labor incomes rose in all states, which has helped support state tax collections. Nevertheless, the profits were nowhere near enough to offset the drastic slump in government aid, which led to a decline in overall personal income. ”