How will the California economy handle the Los Angeles wildfires’ early repair estimates running between $50 billion to $150 billion?
Well, much of those rebuilding funds will be from insurance. Other payments will be covered by various governments and their assistance programs. There will be charity, too.
And the remaining outlays will come from the nation’s largest flow of personal income.
My trusty spreadsheet looked at personal income states for the 50 states as tallied by the U.S. Bureau of Economic Analysis. This quarterly stat adds up what’s paid to residents – from paychecks to investment proceeds to government benefits from welfare to Social Security.
California’s personal income ran at a $3.39 trillion annual pace in the year ended September 2024. That’s No. 1 among the states and 14% of the nation’s $24.74 trillion tally. The Golden State’s economic heft will significantly mitigate the painful business expenses of rebuilding.
Only three other states have trillion-dollar personal incomes: Texas, with $2.14 trillion, New York, with $1.71 trillion, and Florida, with $1.65 trillion.
Growth picture
This California cash flow is expanding at a nationally leading pace.
Statewide per-capita income – that’s all payments divided by the population – grew at an average of 6.7% annually in the four quarters through September 2024. That’s No. 1 among the states and easily tops the 4.7% national pace.
Following the Golden State was Hawaii, up 6.5%, Vermont and New York at 5.7%, and Mississippi, up 5.5%
U.S. laggards were North Dakota, down 1%, Nebraska, up 1.3%, Iowa and South Dakota, up 1.5%, and Montana, up 3.1%.
And California’s major economic rivals? Texas was No. 43 at 3.7%, and Florida was No. 39 at 4%.
Details
California’s notable advance pushed its per-capita income to $85,300 as of September 2024 – the fourth-highest among the states and 18% higher than the nation’s $72,400.
No. 1 was Massachusetts at $94,400, followed by Connecticut at $93,500 and New York at $86,200. After California was New Jersey and Wyoming at $84,900.
Mississippi had the lowest income, at $51,500, West Virginia at $54,900, Alabama at $56,200, New Mexico at $57,400, and Kentucky at $57,500.
Texas was No. 26 at $68,200 while Florida was No. 19 at $70,900.
The spin
We often wonder who can afford California living – or this month, what entity could absorb a humungous wildfire repair bill.
Well, these income yardsticks suggest there have been numerous Californians with robust increases in what they get paid, noting these stats track wealth created inside and outside the traditional workplace.
This collective upswing is not a one-shot wonder. California’s per-capita income expanded at an average 5.7% annual rate in the previous four quarters, the year ending September 2023, No. 8 among the states.
Equally impressive is that California’s growth improved by 1 percentage point over these four quarter periods, the seventh-best performance among the states.
By the way, national income growth in the same period cooled by 0.3 percentage points from a 5% pace.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com