BEFORE COVID, SAN DIEGANS’ PERSONAL INCOME WAS RISING

Bureau of Economic Analysis’ 2019 data shows 2.8% increase

New data shows residents of San Diego County had more money in their wallets at the end of 2019 — but it is hard to imagine the trend continued this year.

San Diegans’ real personal income increased 2.8 percent annually last year, said data released this week by the U.S. Department of Commerce’s Bureau of Economic Analysis. That was above the nationwide average of 2.4 percent and the second year San Diego metro was higher than the countrywide average.

The figures show a positive trend for San Diego fortunes but come with a large caveat. The federal data lags by one year, so it is unknown yet what happened in 2020. However, the COVID-19 crisis led unemployment to rise to a high of 15.2 percent in San Diego County and economic pain was widespread with food lines, rent protests and business closures.

Alan Gin, economist at the University of San Diego, said it is reasonable to assume the overall personal income for San Diegans will go down in 2020 — but it doesn’t tell the whole story. He said this downturn is highly uneven because many people were

able to work from home and could be doing better now than they did the previous year.

“Some people have been able to hold up pretty well during this thing but the people that have been hurt have been hurt drastically in the sense they’ve lost their jobs,” Gin said. “So they have lost 100 percent of their income.”

Real personal income is a catch-all way of looking at how much money Americans earn in a year. Adjusting for inf lation, the number includes wages, interest, dividends from stocks and government benefits.

Among large metro areas, San Diego’s 2.8 percent increase is small potatoes. Austin, Texas, saw real income increase by 5.3 percent, Denver by 4 percent and the nearby Riverside-San Bernardino-Ontario metro by 3.7 percent.

Areas with lowest gains, all tied for a 1.4 percent increase, were Miami, Chicago and Detroit.

Increases in the San Diego metro surged as the region came out of the Great Recession, up 6.2 percent annually in 2014. It was up 5.7 percent in 2015, 2.3 in 2016, 1.1 percent in 2017 and 3.2 percent in 2018.

Wages are a factor in fortunes, but a big part of the changes in incomes across metropolitan areas was how much things cost, which varies depending on where you live.

The Bureau of Economic Analysis data includes something called the “regional price parity,” which looks at the price of goods and services, including rents. Out of 384 metro areas, San Diego had the 11th highest prices (San Francisco had the highest, and Beckley, W.Va., had the lowest).

San Diego rents were 72 percent higher than the average metropolitan area that year, the fifth-highest of any region. San Jose was the highest with rents 124 percent more than the national average.

The per capita, or average, personal income earned by a San Diegan in 2019 was $49,642 (ranked No. 140 out of 384), up from $48,354 the year before. The highest in the nation was the Midland, Texas, metro area — the center of the country’s oil and gas production — with $119,691. The lowest was the McAllen-Edinburg-Mission metro area in Texas with $30,619.

In general, housing costs pulled down the rankings of many California metros. However, high incomes still kept San Jose ($82,718) at No. 4 in personal income rankings and San Francisco ($71,668) at No. 6.

Broken down by state, Maine was the best place for personal income growth at 4.1 percent. It was followed by Washington at 4 percent and Utah at 3.8 percent. California was roughly the middle of the pack with 3 percent. The three worst places, all tied at 0.7 percent increases, were Rhode Island, Wyoming and Hawaii.

While 2020 figures may show a slowdown in personal income growth, some analysts predict strong economic gains in the second half of 2021 based on the widespread availability of vaccines for the coronavirus and pent-up demand.

The quarterly UCLA Anderson Forecast, released last week, predicted California’s strong technology sector, as well as work in residential construction and logistics, would lead the recovery. However, it also said that California’s COVID restrictions, some of the strongest in the nation that have shuttered many businesses, would give the state a slower start than some areas.

“Post-pandemic California will grow faster than the U.S. as a whole,” it wrote, “although the state’s recovery is expected to begin later.”