Local Area Personal Income – 2015 Figures for Josephine CountyJanuary 18, 2017 New figures published from the Bureau of Economic Analysis show healthy gains in Oregon and Rogue Valley per capita personal income (PCPI) between 2014 and 2015. PCPI is just one of the figures recently released in the State and Local Area Personal Income series available now for 2015 on the www.bea.gov website.
PCPI is one of the most often cited figures to measure an area’s overall economic health and prosperity. But there are a few factors that make this an imperfect yardstick to compare local areas and economies. Since the data use total income – net earnings; personal current transfer receipts; and dividends, interest, and rent – and divide that by total population, areas with higher concentration of older residents can show lower PCPI. The reason is that as people leave the labor force, they have likely passed their peak earning years, and therefore will have less contribution to the net earnings component of total income. Remember PCPI represents income, rather than wealth. Older residents may have substantial wealth, but not have as much relative income, and this wealth would not be captured in PCPI figures, unless it was income-generating investments that would show up in the “dividends, interest, and rent” portion of PCPI.
Another limitation of comparing local economies using PCPI as a yardstick is that there is no accounting for the differences in cost-of-living among local areas. Places with lower cost of living and lower PCPI can be relatively as well-off as areas with higher cost of living and higher PCPI. Knowing the limitations of the data can help you understand how to view the figures in a clearer context. All that being said, let’s forge ahead and look at the new figures for 2015.
In 2015, Josephine County’s PCPI was $36,013, and ranked 31st among Oregon’s counties. PCPI rose by 4.8 percent from 2014, slightly slower growth than for Oregon statewide (5.0%) but slightly faster than the U.S. (3.7%). Josephine County’s PCPI was 82 percent of the statewide PCPI ($13,783). A decade earlier in 2005 the county’s rank among Oregon counties was 22nd highest.
Looking at the three main components of PCPI sheds light on why Josephine County lags the Oregon average. About 45 percent of Josephine County’s PCPI is from net earnings, which includes wage and salary income and proprietor income. Josephine County net earnings are only about 61 percent of the Oregon statewide net earnings figures. Average earnings per job in Josephine County were $38,874 compared with $52,930 for Oregon as a whole. Average nonfarm proprietor income in Josephine County exactly matched the Oregon average of $26,395. Where Josephine County lags is in average wage and salaries, and it’s the largest factor in lagging the state’s PCPI figures, with Oregon at $49,206 and Josephine County only reaching $35,654.
Per capita personal current transfer receipts made up about 20 percent of Oregon’s PCPI and 36 percent in Josephine County. About 90 percent of Jackson County personal current transfer receipts were from “retirement and other income”, reflecting our slightly older population with more retirees that the state overall. Josephine County had higher per capita personal current transfer receipts ($12,848) than Oregon ($8,861).
Per capita dividends, interest, and rent income accounted for about 19 percent of Josephine’s PCPI in 2015, the same percent as Oregon statewide. Josephine County also had lower per capita dividends, interest and rent income at $6,997 compared with Oregon’s $8,455 figure.
Going back to 1969, Josephine County has consistently lagged Oregon’s PCPI. The percentage gap between Oregon and Josephine has ranged from about 14 percent to 23 percent. In 2008, Josephine’s PCPI was 20 percent lower than the statewide average. By 2015, the gap was slightly less at 17.7 percent lower than the Oregon average, or $7,770 below the statewide per capita personal income.
Another statistic available from the BEA is total employment broken out by proprietors and wage and salary employment. In the early 1970s about 25 percent of total employment were proprietors. That share increased fairly steadily until the early 1990s when it reached about 30 percent. Since then the share of total employment held by proprietors peaked in 2009 at 31.7 percent and has now slipped slightly to 30 percent in 2015.
There are many other data points and statistics available from the State and Local Personal Income series published by the Bureau of Economic Analysis. Just visit their website, www.bea.gov, and start exploring the interactive tables listed.