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GOOD NEWS ON INCOME OF WNYERS

It might not feel like it, but you're a little better off than you used to be.

That's because our incomes grew at a pretty decent pace in 2003 and even outpaced the income growth of the typical American by 50 percent, according to new federal statistics released last week.

It was the second straight year that per capita personal income growth in the Buffalo Niagara region topped the national average. That was no small feat, either: The last time the region outpaced the nation in income growth for two consecutive years was 1976-77.

The good news was a surprise to local economists, since the region still struggles to add jobs and is once again lagging behind the rest of the country in its recovery
from the 2001 recession.

The new statistics from the Bureau of Economic Analysis show that per capita personal incomes for Buffalo Niagara residents grew by 3.3 percent in 2003, which was 50 percent faster than the 2.2 percent growth nationwide. That followed smaller gains in 2002, when revised figures show incomes here grew by 1.6 percent, more than double the 0.7 percent jump nationally.

Even after the corrosive effects of inflation, per capita personal incomes here rose by 1 percent, while they were falling by 0.1 percent nationally.

The region's auto plants are probably a big reason for its strong showing in 2003, says Richard Deitz, the regional economist at the Federal Reserve Bank of New York's Buffalo branch. While the region's factories provide only a little more than 11 percent of all local jobs, they pack a big economic punch, contributing 16 percent of the area's total income.

And even though the number of factory jobs tumbled by 4 percent in 2003, the total income from those jobs actually rose by just under 5 percent. "My guess is that, as they keep getting rid of people, the ones that are left are making more," says George Palumbo, a Canisius College economics professor.

In contrast, retailers provide even more jobs than manufacturers, but the earnings from those jobs pack about half the punch, accounting for just 8.3 percent of the region's total income.

But here's the bad news: The 2003 increase was just the third time in the last 12 years -- and the fourth time since 1986 -- that incomes grew faster here than they did nationwide. So if you take a longer term view, we've been getting poorer compared with the average American.

In fact, real personal incomes in the Buffalo Niagara region grew by just 13.2 percent from 1992 to 2002, less than the 15.8 percent increase nationally. That's because earnings here grew at an annual rate that was a little more than a third slower than the 5.1 percent national average during that time.

That's important because consumers drive about two-thirds of all economic activity in the country. So when personal incomes rise, consumers have more money to spend, which can create a powerful stimulus for a region's economy.

Businesses that rely on consumer spending pay close attention to a region's personal income, and that's one area where the Buffalo Niagara region comes up short. In 1993, the region ranked 41st among metro areas in total personal income. By 2003, it had dropped to 48th as our population fell and our income growth didn't keep pace with the nation's.

For retailers, bankers and other businesses that look for markets that are getting bigger and wealthier, the Buffalo Niagara region looks like the ugly stepchild to high-flying areas, like Washington, D.C., that are wealthier and growing faster than the national average.

But by upstate New York standards, the Buffalo Niagara region looked like a high flyer, at least from 2001 to 2003, with per capita incomes rising faster here than they did in Albany, Elmira, Binghamton, Rochester, Syracuse and Utica.

And that's a testament to the power of manufacturing.

e-mail: drobinson@buffnews.com