Per Capita Personal Income in Baker, Malheur, and Union – 2016

by Christopher Rich

January 4, 2018

The Bureau of Economic Analysis – a division of the U.S. Department of Commerce – publishes county level personal income data in November. Personal income is derived from three main components: net earnings (wages, salaries, employer contributions); personal current transfer receipts (retirement, Medicare, unemployment insurance); and dividends, interest, and rent. A county’s total personal income is the sum of all personal income generated by each resident of the county. By dividing a county's total personal income by its total population, we obtain per capita personal income (PCPI): the average of total income per resident regardless of age. This doesn’t actually tell us how much income the average resident receives each year. However, much the same as per capita GDP, per capita personal income provides a way to make comparisons with the state and with other counties. It can also help to highlight trends and changes that we may want to examine a little more closely.
Baker, Malheur, and Union are three counties that together accounted for 40 percent of Eastern Oregon’s population in 2016. The total combined population of the three counties was roughly 73,000. Malheur ranked 20th, Union 23rd, and Baker 28th when ranked individually in the state in terms of total population. When ranked according to PCPI, however, the three counties were in the bottom seven: Union ranked 30th, Baker ranked 32nd, and Malheur ranked 36th.

Union County

Union ranked 30th in Oregon for PCPI, a $36,785 in 2016. The county skirted the middle of the pack (23rd) in terms of per capita net earnings. Slightly more than half (51%) of Union’s personal income came from net earnings, with the next largest portion (30%) from transfer receipts. Per capita net earnings decreased 7 percent for the county from 2000 to 2016 (adjusted for inflation). Ten Oregon counties saw a drop in this component for the period while 26 saw growth.

Union’s per capita transfer receipts ($10,846) ranked 18th in the state. Roughly 36 percent of income from transfer receipts was in retirement and disability insurance benefits, the majority share (88%) of which was social security. The largest portion of transfer receipts (45%) came from medical benefits: half from Medicare and half from public assistance medical care.

Union’s per capita dividends, interest, and rent ($7,023) ranked 26th in the state. This component grew 14 percent for the county from 2000 to 2016. Union was 11th in the state for growth in per capita dividends, interest, and rent for the period: Hood River showed the most growth (47%), while Curry showed the least (-11%).

Growth or loss in components of per capita income can come from several factors. Much of Union’s growth in dividends, interest, and rent as well as the decrease in net earnings is likely due to shifting age demographics. These demographics play a key role in components of per capita income for a county.

Union’s total population increased by 9 percent from 2000 to 2016, but all growth came in the 55 or older age group, which grew by 51 percent. Meanwhile, the 54 or younger age group decreased by 5 percent. The majority of this decrease came (74%) in the prime working age population (25 to 54 years old), which translates to a loss of 642 prime age workers. The draw of Eastern Oregon University (EOU) helped to boost, or prop up the 18 to 24 year old population, and overall one-third of Union’s population was 24 or younger in 2016. Since many college students work only part time in low wage jobs, or not at all, and most of the population younger than 18 draws little or no income from earnings, the high share of young residents and the hollowing out of the prime working age population put downward pressure on per capita net earnings. At the same time, a rapidly expanding older population put upward pressure on dividends, interest, and rent since older residents are apt to draw more income from this component than younger residents are.

Baker County

Baker ranked 32nd in Oregon for PCPI, at $36,412 in 2016. The county was 34th in per capita net earnings, which grew roughly 4 percent from 2000 to 2016. Less than half (43%) of the county’s PCPI came from net earnings with the second largest share from transfer receipts (32%). Transfer receipts and dividends, interest, and rent helped to elevate Baker’s personal income; both components of income ranked high in the state.
Baker County’s per capita transfer receipts ($11,736) ranked ninth. Roughly 38 percent of the county’s income from transfer receipts was in retirement and disability insurance benefits, which was slightly higher than in Union County. A much higher 96 percent of retirement and disability income was from social security. Medical benefits accounted for 44 percent of income from transfer receipts: 52 percent from Medicare and 47 percent from public assistance medical care.

Baker’s per capita dividends, interest, and rent ($9,176) ranked 11th in the state. Per capita dividends, interest, and rent grew 21 percent for the county from 2000 to 2016. Baker was eighth in the state for growth in this component.

Baker County age demographics shifted dramatically over the last 16 years. While the total population decreased only slightly (roughly 1%), the 54 or younger population fell by 18 percent. This translates to a loss of 2,066 people from the younger age group, half of which came in the prime working age population. The second largest loss for the group was among those younger than 18. Population changes in the prime working age and under 18 groups are often tied together. At the same time as the 54 or younger group dropped, the 55 or older group expanded. Growth here was 35 percent and the age group picked up 1,850 people. Three out of five of the newly added folks were 65 or older. With no college draw to prop up the 18 to 24 year old age group, just one-quarter of Baker County’s total population was 24 or younger in 2016 (28th in the state). For Baker, the number of young residents who draw less income from net earnings and dividends, interest, and rent diminished, while the number of older residents who draw more income from these two components increased. As a result, both components felt upward pressure and increased.

Malheur County

Malheur ranked 36th in Oregon for PCPI, at $29,714 in 2016. The county was 36th as well in per capita net earnings, which decreased 17 percent from 2000 to 2016. This was the largest percent decrease in the state. Less than half (46%) of the county’s PCPI came from net earnings with the second largest share from transfer receipts (36%).

Malheur County’s per capita transfer receipts ($10,590) ranked 23rd in the state. Only 27 percent of the county’s income from transfer receipts was in retirement and disability insurance benefits, which was a much lower share than both Baker and Union. However, 97 percent of this was from social security, which was roughly the same as Baker. Over half of the county’s transfer receipts (53%) came from medical benefits, with just 34 percent from Medicare and a much larger 65 percent from public assistance medical care.

Malheur’s per capita dividends, interest, and rent ($5,369) ranked 34th in the state. Per capita dividends, interest, and rent decreased 3 percent for the county from 2000 to 2016. Malheur was one of six counties that saw a decrease in this component for the period.

Like Baker, Malheur’s total population changed only slightly, growing less than 1 percent from 2000 to 2016. However, the 54 or younger age group dropped by 9 percent for the period while the 55 or older age group grew by 32 percent. For Malheur this translates to a loss of 2,128 people from the younger group and a gain of 2,224 people for the older group. This represents a big shift in age demographics. However, Malheur still ranked seventh in the state in 2016 for portion of the population 24 or younger and fourth in the state for portion of the population younger than 18. Like Union with EOU, Malheur County’s Treasure Valley Community College likely helped to prop up the county’s 18 to 24 year old population. Also like Union, one third of Malheur’s population was 24 or younger, which put downward pressure on earnings as well as dividends, interest, and rent. And Malheur County has extra downward pressure as well. The county is home to Snake River Correctional Institution which can house roughly 3,000 inmates. The inmate population, which amounts to roughly 10 percent of the population, likely adds little from earnings and dividends, interest, and rent, and yet is counted in the total population. As a result, a sizeable chunk of Malheur County’s low PCPI may stem from its 24 or younger and inmate populations, relative to the size of its total population.

Summation

Baker, Malheur, and Union together accounted for 40 percent of Eastern Oregon’s population in 2016. All three counties fell near the bottom in terms of PCPI rank within the state. Baker and Union had similar levels of PCPI, which occurred through different income components and different age demographics. Union and Malheur each have a college that helped to prop up the younger age group, but this likely put downward pressure on per capita earnings and dividends, interest, and rent. The relative size of Malheur County’s prison population dilutes per capita components. This likely helped to hold the county near the bottom of state rankings in PCPI and per capita income components.


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