Many have drawn comparisons between Oregon and Washington in an attempt to shed light on why two neighboring states have such a disparity in terms of per capita personal income.
In the November 2010 report Why Oregon Trails the Nation: an analysis of per capita personal income, the Oregon Employment Department identified several key factors that negatively impact PCPI in Oregon. They include:
- A fast-growing population
- Lower industry wages
- Lower wages in high-paying occupational groups
- Lower earnings by proprietors
- A net outflow of commuter wages
- A higher unemployment rate
- A lower employment-to-population ratio
- A shorter average workweek
- More part-time workers
Population Growth: A rapidly growing population tends to inhibit per capita personal income growth. But Washington accomplishes a difficult feat: it maintains a relatively high PCPI even though it also has high population growth. Oregon has also successfully paired population and PCPI growth in the past. Oregon had the fastest-growing PCPI in the nation and the 11th fastest growing population between 1992 and 1996, but has been unable to sustain the trend.
Industry Earnings and Wages: In 2011, average hourly earnings in the private sector differed sharply between Washington and Oregon. Washington's $27.25 average hourly wage was 4th highest in the nation last year, while Oregon's $21.75 average hourly wage ranked 27th.
There may be several reasons why Washington's wages are higher, but one is the presence of two large, high-paying companies who provide a tremendous foundation for the state economy. The private-sector aerospace product and parts manufacturing industry employed roughly 86,000 in 2011, and paid an average annual wage of $97,300. In Oregon, 2,940 workers were employed in aerospace and earned an average of $75,700. Washington's "all other publishing industries" category, which includes software publishing, employed approximately 52,000 workers in 2011. Wages were extraordinary, averaging $166,700. Oregon had 9,120 workers in software publishing, with an annual wage of $94,600.
Wages in High-Paying Occupations: The median occupational wage in Oregon was $16.90 per hour in 2011, slightly above the national median of $16.57 per hour. However, the composition of occupational wages in Oregon is much different than the nation. Wages in Oregon are higher than national wages in each lower-paying occupational group, but Oregon wages tend to be lower than national wages in higher-paying occupational groups. Washington's median occupational wage is $19.30 per hour, much higher than Oregon and the U.S., and all but one of Washington's occupational groups had a median wage that's above the U.S. median for that group.
Proprietors' Earnings: Oregon's proprietor earnings averaged $22,678 in 2011, far below the national level of $30,971. Washington's average proprietor income of $31,193 was just above the national figure and also well above Oregon's average proprietor income.
Net Outflow/Inflow of Commuter Wages: In 2011, Oregon experienced a $2.8 billion outflow of commuter wages, the 6th highest among all states. Rather than having their income attributed to Oregon, workers who commute across state lines for their job but live elsewhere - mostly in Washington - have their income counted in their state of residence. In complete contrast (and for related reasons), Washington saw a $3.2 billion inflow of commuter wages.
Unemployment Rate and Employment-to-Population Ratio: Oregon's average unemployment rate of 9.5 percent ranked 12th highest in the nation in 2011. Unemployment is linked with the employment-to-population ratio, which consists of the share of the population ages 16 and older who are working. Oregon's employment-to-population ratio was 59.3 percent in 2011. Washington's average unemployment rate of 9.2 percent was just below Oregon's rate. Washington's employment-to-population ratio of 58.8 percent in fell below Oregon's ratio in 2011 for the first time in years.
Shorter Average Workweek and More Part-Time Employment: The two states differ only slightly in terms of average weekly hours worked and the share of part-time workers. However, Oregon does show fewer hours worked per week than Washington (33.8 vs. 34.6) and a larger portion of part-time employment (32.9% vs. 31.3%).
|Comparisons of PCPI Factors, Oregon and Washington|
|2011 Data (unless otherwise noted)|
|Population growth, 1996-2011||19.2%||22.6%|
|Average hourly earnings, private sector||$21.75||$27.25|
|Average proprietors' income||$22,678||$31,193|
|Commuter outflow/inflow of wages||- $2.8 billion||+ $3.2 billion|
|Unemployment rate (annual)||9.5%||9.2%|
|Average weekly hours worked, private sector||33.8||34.6|
|Total PCPI (2011)||$37,527||$43,878|
|Metropolitan PCPI (2010)||$38,008||$43,901|
|Nonmetropolitan PCPI (2010)||$30,396||$33,189|