Maine’s Private Sector
On Thursday, the Bureau of Economic Analysis released new personal income data for the 2nd quarter of 2008. While Maine’s personal income grew 1.6 percent; 1.18 percentage points
of that growth came from government transfers–Social Security,
Medicare, Medicaid, etc. In other words, 74 percent of the growth came
from transfers which is the second highest percent behind Rhode
Island’s 82 percent. This is not real economic growth. Massachusetts
and New Hampshire had the lowest portion due to government transfers at
54 percent and 55 percent respectively. However, all growth rates are
somewhat inflated due to the federal stimulus rebate checks.
The growth in government transfers has negatively impacted Maine’s private sector share of income. The chart below shows that Maine’s private sector fell to 66.1 percent of personal income–the second lowest level since 1929.