Seattle feeling slightly richer
Personal income barely budged in the Seattle metropolitan area last year, but that doesn't mean the local economy is heading into the tank...
Seattle Times business reporter
Personal income barely budged in the Seattle metropolitan area last year, but that doesn't mean the local economy is heading into the tank. Rather, economists say, it's yet another sign of the dominance of that little software shop in Redmond.
The Bureau of Economic Analysis, an arm of the U.S. Commerce Department, reported Wednesday that personal income in the Seattle-Tacoma-Bellevue area last year was $41,661 per person, a mere 0.06 percent above 2004 — and a growth pace that was 355th out of 361 metro areas studied.
But those figures include billions of dollars from Microsoft's special $3-a-share dividend in late 2004. Because Chairman Bill Gates, Chief Executive Steve Ballmer and other Microsoft insiders and large shareholders live in metro Seattle, analysts say, the dividend inflated personal-income figures in 2004.
"The growth in 2005 looks weak because you had this bulge in 2004," said Bret Bertolin, senior economic forecaster with the state Economic and Revenue Forecast Council.
Personal income, as defined by the Bureau of Economic Analysis, is more than just wages: It also includes fringe benefits; interest and dividend payments; government payments, such as Social Security and unemployment benefits; rents paid to individuals; and income from owner-operated businesses.
Bertolin estimated that about $5.2 billion of the $32.4 billion Microsoft paid out went to insiders in King, Pierce and Snohomish counties. Take that out of the calculations, and a very different picture emerges.
Per-capita personal income in the Seattle metro area in 2004 drops by about $1,635, to $39,999. Growth that year falls to 4 percent, but 2005 growth jumps to 4.2 percent — much closer to the national averages of 4.9 percent and 4 percent, respectively.
The adjusted numbers better reflect the reality of the Puget Sound area's economy, said Dick Conway, economist and co-editor of the Puget Sound Economic Forecaster.
The local area emerged from recession in mid-2004, after the rest of the country, but is now growing faster, he said.
The extra Microsoft money had little impact on the local economy, Conway and Bertolin said.
Gates donated his dividend, some $3.3 billion, to his foundation. People like Ballmer and Paul Allen, who account for most of the rest of the local share, probably didn't spend any more than they would have.
"The dividend probably did spice things up a bit, but I wouldn't characterize it as a major impact," Conway said.
Overall, Seattle ranked 15th in the nation in terms of per-capita personal income.
A stretch of southwestern Connecticut that includes some of the nation's richest suburbs and poorest big cities led the nation, with personal income of $66,719 per person. McAllen-Edinburg-Mission, Texas, along the Mexican border, came in last, at $16,022 per person.
Hinesville-Fort Stewart, Ga., one of several high-ranking areas whose economy is dominated by the military, had the fastest growth rate in the nation at 14.2 percent. Hurricane-ravaged New Orleans, not surprisingly, showed the steepest drop: 33.2 percent.
Drew DeSilver: 206-464-3145 or firstname.lastname@example.org