Maine’s average personal income growth outpaced that of the nation in the first quarter, led by a spike in income unrelated to wages, such as Social Security and Medicaid.

Personal income in Maine was up 1.1 percent in the first quarter compared with the fourth quarter of 2014, according to estimates released Monday by the U.S. Bureau of Economic Analysis. Maine’s personal income growth was slightly higher than that of the nation, which had an overall increase of 0.9 percent in the first quarter.

In Maine, personal income growth was led by a 2.2 percent increase in current transfer receipts, which represent money paid to individuals for Social Security, Medicare and Medicaid, General Assistance, insurance benefits and other reasons not related to work. By comparison, workplace earnings increased just 0.9 percent in Maine.

Nationally, current transfer receipts increased 2.1 percent in the first quarter, the largest increase in five years, according to the bureau.

The first-quarter estimates of current transfer receipts reflected special factors, it said. Social Security benefits, which increased 2.1 percent, were boosted by a 1.7 percent cost-of-living adjustment. Medicaid benefits, which increased 3.3 percent, were boosted by expanded coverage in Indiana and Pennsylvania under the Affordable Care Act.

It isn’t surprising that Maine outpaced the nation during a quarter in which income growth was led by an increase in current transfer receipts, said economist Charles Lawton of business consulting firm Planning Decisions in York.

Because of Maine’s aging population, a higher-than-average percentage of Mainers receive Social Security benefits, he said, so the cost-of-living increase likely had an even bigger impact on overall income growth in the state than it did nationally. And since Maine has fewer working-age residents and lower average wages overall, the more tepid wage growth affected the state less than it did others, Lawton said.

 


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