Mainers’ personal incomes grew modestly last year – enhanced primarily by better wages in the health care and natural resource-based industries – but continued to lag behind both national and regional growth.

According to the U.S. Department of Commerce’s Bureau of Economic Analysis, personal income in Maine grew 2.9 percent last year, putting the state 40th nationally. The new median per capita income for Maine is $42,071, a 2.8 percent increase from the previous year.

The national average for growth in personal income was 3.9 percent. Every other state in New England outpaced Maine – Connecticut’s personal income grew by 3 percent, and the growth rate in the other four states of the region was 4 percent or better.

New Hampshire led the region in personal income growth at 4.5 percent for 2014, 12th nationally. Personal income growth was fastest in Alaska and Oregon, where it jumped 5.7 percent. The slowest growth rate was 0.5 percent in Nebraska, where farm earnings dropped sharply.

Maine’s income growth was dragged down primarily by slow growth (2.3 percent) in personal transfer receipts, a catch-all category that includes programs such as Social Security, aid to needy families, Medicaid, Medicare, and unemployment and veterans’ benefits.

Nationally, Medicaid payments jumped by 11.1 percent last year, the Bureau of Economic Analysis said. States that expanded Medicaid to extend health insurance to the poor under the Affordable Care Act saw those receipts increase 13.6 percent, the bureau said. But in states where Medicaid coverage was not expanded, including Maine, Medicaid receipts grew 7.3 percent.

Earnings growth – which primarily reflects wages – was up 1.97 percent in Maine last year, below the national average increase of 2.94 percent. Maine was fifth in New England in that category, barely edging out Connecticut, where earnings growth was 1.92 percent.

The Maine industries that had the healthiest growth in earnings were forestry, fishing and related activities; health and social assistance; management of companies and enterprises; and professional, scientific and technical services. Industries which had declining earnings included finance and insurance and non-durable goods manufacturing.

Amanda Rector, the state economist, said personal income figures are influenced by the state’s demographics. Efforts to attract more people to the state, she said, “are critical steps for expanding the workforce and increasing income growth in the future.”

Rector said Gov. Paul LePage’s tax reform package is designed to encourage population growth by lowering tax burdens on workers and businesses.

Charles Colgan, an emeritus professor at the Muskie School of Public Service at the University of Southern Maine, said the personal income figures reflect both problems and promise.

He said the effects of the deep recession are still being felt in Maine, which lags a couple of years behind the country as a whole in recovering lost jobs. That, in turn, tends to keep a lid on wage growth until the number of jobs nears pre-recession levels and employers need to increase pay to attract more workers.

He also said better information on transfer payments can also shine a better light on the numbers. For instance, he said, if the transfer payment figures are due largely to depressed Medicaid payments, that’s a bad sign, while a drop in unemployment insurance benefits would be more positive.

The Bureau of Economic Analysis breakdown of transfer payments by state is done on a quarterly basis and indicated a drop of Medicaid transfer receipts in Maine of 0.4 percent and an increase in unemployment benefits in Maine in the last three months of 2014.

However, Medicaid benefits had increased in eight of the previous nine quarters and unemployment compensation had fallen in eight of the prior nine quarters.

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.