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Per Capita Personal Income in Oregon

Per Capita Personal Income in Oregon

by Felicia Bechtoldt

January 17, 2018

In 2016, Oregon had a per capita personal income (PCPI) of $45,399. Oregon’s PCPI ranked 29th in the United States and was 92 percent of the national average, $49,246, according to the U.S. Bureau of Economic Analysis. In Oregon, the 2016 PCPI increased by 2.4 percent from 2015, faster than the nationwide PCPI growth rate of 1.6 percent. In 2006, Oregon’s PCPI was $34,721 and ranked 28th in the United States. Between 2006 and 2016, the average annual growth rate of PCPI in Oregon was 2.8 percent, which is slightly above the average annual growth rate for the nation (2.6%).

Personal income is the sum of three main components: net earnings (wages, salaries, employer contributions); personal current transfer receipts (retirement, Medicare, unemployment insurance); and dividends, interest, and rent. PCPI is calculated by dividing the area’s personal income by its total population.

Oregon’s PCPI has generally risen with the United States’ PCPI, aside from recessionary times. Despite the increase, the gap has widened between PCPI for Oregon and the United States during the past few decades. Oregon’s PCPI is lower than the national figure for a few reasons. First, Oregon’s industry pay is less than the national average. This affects the upper half of the PCPI fraction (personal income). At the same time, Oregon’s population is increasing at a faster rate (+11.5% since 2006) than that of the nation (+8.3% since 2006), which means the lower half of the PCPI fraction (total population) is increasing faster than the nation’s. Both of these factors contribute to a lower PCPI in Oregon.

There are a number of other factors that play into Oregon’s lower PCPI, and it makes for a complex issue. These factors include lower earnings by proprietors, a net outflow of commuter wages, a shorter average workweek, more part-time work, cost of living, and more.

Per Capita Personal Income in Oregon’s Counties

Per capita personal income also varies between states and counties, and by metro and nonmetro areas. A look at county numbers shows high variability in PCPI. In general, PCPI is higher in the Portland and Bend area and along the Columbia Gorge. Sherman County, a nonmetro area, actually had the highest PCPI in 2016 at $55,846.

The three major components of per capita personal income – net earnings; transfer receipts; and dividends, interest, and rent – make up different portions of counties’ PCPI. In general, counties with higher PCPI have a higher percentage of PCPI attributable to net earnings. Per capita net earnings made up 66.3 percent of PCPI in
Washington County and 60.4 percent in Multnomah and Clackamas counties. In Malheur County, per capita net earnings made up just 24.6 percent of PCPI.

Areas with a higher concentration of older residents can show lower PCPI. In Oregon, Malheur County ($29,714) and Jefferson County ($32,670) had the lowest PCPI. The reason is that as people leave the labor force, they have likely passed their peak earning years, and therefore have less contribution to the net earnings component of personal income. Remember PCPI represents income, rather than wealth. Older residents may have substantial wealth, but not have as much relative income, unless it was income-generating investments that would show up in the “dividends, interest, and rent” portion of PCPI.

Income from transfer receipts is generally higher in counties with lower PCPI. These transfer receipts are primarily government social benefits, such as Social Security (retirement), Medicare (health insurance program for people age 65 or older), Medicaid, and unemployment insurance. The initial impulse is to presume that folks in some counties rely more heavily on government subsidies; however, the story behind the higher transfer receipts is a demographic one. In some counties, specifically those in rural Oregon, the share of the population that is age 65 and older increased from around 18 percent in 2010 to 22 percent in 2016. The retirement age population grew by 28 percent between 2010 and 2016, while the working age population and youth population both declined by 3 percent. A higher share of retirees means a higher share of transfer receipts. The share of per capita transfer receipts was higher in Curry (24.7%), Coos (23.9%), Jefferson (23.2%), and Sherman (23.1%) counties. The lowest share of per capita transfer receipts was in Benton (11.3%) and Washington (11.9%) counties.

Income from dividends, interest, and rent was highest in Hood River ($11,481), Deschutes ($11,343), and Wallowa ($11,282) counties. It was lowest in Jefferson ($5,302) and Morrow ($5,352) counties.

Metro and Nonmetro

Metro areas across Oregon tend to have higher per capita personal income than nonmetro areas. In 2016, nonmetro areas ($38,224) in Oregon had a PCPI just 81.7 percent of the metro figure ($46,787). In the U.S., PCPI of nonmetro areas amounted to 74.9 percent of the metro PCPI.

Comparing metro Oregon with other metro areas across the nation, however, we see that Oregon’s metro PCPI lags the nation, and has for a long while. In fact, Oregon’s metro areas had a PCPI that was 96.5 percent of the national PCPI in 1996, 90.6 percent in 2006, and 91.6 percent in 2016.

On the nonmetro side, Oregon’s PCPI kept pace   with the national average for nonmetros. While in 1996 PCPI in Oregon’s nonmetro areas ($19,425) was actually higher than national PCPI in nonmetro areas ($19,103), it was 98.6 percent of U.S. nonmetro in 2006 and almost 100 percent in 2016.

As shown in the table, net earnings make up the highest share of PCPI for all areas. However, net earnings make up a higher share of PCPI for metros than nonmetros, while transfers make up a higher share for nonmetros than metros.

Read our latest articles about per capita personal income in various areas in Oregon:

Oregon’s Per Capita Personal Income 2016
Per Capita Personal Income in Southwestern Oregon
Lane County’s Per Capita Personal Income Growth Slows in 2016
Per Capita Personal Income in Eastern Oregon’s 7,000 Club
Per Capita Personal Income in Baker, Malheur, and Union – 2016
Northwest Oregon’s Wages and Income.