Published Jul-21-2010
The recently published state per capita personal income data for 2009 show effects of the "Great Recession." PCPI has declined in nearly all areas of the country. Oregon experienced relatively minor losses when compared with other states during this and the previous recession. In times of economic growth, however, Oregon's PCPI lags behind the nation and its western neighbors to an ever-increasing degree.
In 2009, the average U.S. household had fewer pennies to plug into the piggy bank or the economy. PCPI declined in 45 states and the District of Columbia between 2008 and 2009. Per capita personal income slid 2.2 percent nationwide, in 2009 inflation-adjusted dollars. As shown in Figure 1, only five states experienced an inflation-adjusted increase in PCPI over the year: West Virginia (2.2%), Maine (1.4%), Maryland (0.6%), Hawaii (0.2%), and Kentucky (0.2%). The five states with the largest rate of PCPI decline over the period were Wyoming (-5.6%), Nevada (-5.4%), South Dakota (-4.1%), Idaho (-3.8%), and Arizona (-3.8%).
During the two periods of recession in the last decade, Oregon fared better than many states. With a drop of $569, or 1.6 percent, Oregon ranks 22nd best among the states in the rate of PCPI change between 2008 and 2009 (Figure 1). The same was true during the previous recession that began in 2001. In 2002, Oregon also ranked 22nd best for PCPI over the previous year, with a 0.2 percent rise in inflation-adjusted per capita personal income during a time when the nation experienced a 0.6 percent decline.
Over the last decade, the gap has generally grown between Oregon's PCPI and the U.S and far west region. Prior to the recession in 2001, Oregon's inflation-adjusted PCPI sat $2,000 below the U.S. and $4,900 behind the far west region. After narrowing the difference following the 2001 recession, Oregon's PCPI lag increased significantly during the mid-decade period of growth. By 2007, Oregon's PCPI fell $3,800 behind the U.S. average, and $6,900 below the far west region.
Following the onset of the Great Recession, Oregon's PCPI disparity has been reduced to $3,500 below the nation and $5,900 below its western region. Much of this short-term regional improvement is likely due to substantial economic impacts on California and Nevada, two particularly hard-hit states in the latest recession. Even so, Oregon's PCPI lag behind the nation approximately doubled over the last decade. Compared to other western states, the disparity increased even more, by 140 percent between 1999 and 2009.
Oregon displays both accelerated population growth and suppressed income growth. For many years, U.S. Census Bureau estimates show Oregon outpacing national population gains. Between 2000 and 2008, Census estimates show the state population increasing 10.8 percent, compared to 8.1 percent growth nationwide. Meanwhile, Oregon is slumping in the largest of the three personal income sources. Between 1999 and 2009, the portion of personal income from employment wages declined by 4.1 percentage points in Oregon, from 65.3 percent of PCPI to 61.2 percent. The nation faced a relatively smaller drop of 3.4 percentage points in the employment wages component of PCPI, from 68.7 percent in 1999 to 65.3 percent in 2009.
In 2004, the Census projected 41.3 percent population growth for Oregon between 2000 and 2030, compared to 29.2 percent for the U.S. over the same time period. Paired with the recent historical trend of increasing PCPI disparity during periods of growth, Oregon may see further declines as the economy recovers in coming years.
A few labor force characteristics behind Oregon's sluggish income growth include wages, labor force participation, and the usual number of weekly hours for workers.
The Bureau of Labor Statistics publishes all-occupation median hourly wages for the U.S. and states dating back to 2003. That year, Oregon's inflation-adjusted median hourly wage for all occupations exceeded the nation's, at $11.91 and $11.60 respectively. By 2009, the U.S. median hourly wage eclipsed Oregon, at $16.16 hourly compared to $15.95 for the state. The nation also surpassed Oregon in labor force participation during recent years. With a gain of 0.2 percentage point from the year 2000, Oregon reached 65.3 percent participation in 2008. During the same period, U.S. labor force participation grew by 2.5 percentage points to 65.9 percent. While the labor force participation rate is comparable, the relative growth of U.S. labor force participation may have contributed to Oregon's PCPI lag.
In addition, Census estimates show Oregon's work week is shorter than the nation's, and there's a larger share of part-time employment here than in the U.S. The mean usual hours worked by Oregonians ages 16 to 64 in 2008 totaled 37.9 per week, while the average U.S. worker clocked in 39.0 hours weekly. In addition, 50.7 percent of U.S. workers had full-time, year-round employment for 2008; only 47.2 percent of Oregonians did.