Per Capita Personal Income in Oregon

by Felicia Bechtoldt

December 6, 2018

In 2017, Oregon had a per capita personal income (PCPI) of $48,137. Oregon’s PCPI ranked 25th in the U.S. and was 93 percent of the national average of $51,640, according to the U.S. Bureau of Economic Analysis. In Oregon, the 2017 PCPI increased by 3.7 percent from 2016, about the same as the nationwide PCPI growth rate of 3.6 percent. In 2007, Oregon’s PCPI was $35,955 and ranked 31st in the United States. Between 2007 and 2017, the average annual growth rate of PCPI in Oregon was 3.0 percent, which is above the average annual growth rate for the nation (2.7%).
Personal income is the sum of three main components: net earnings (wages, salaries, employer contributions); personal current transfer receipts (retirement, Medicare, unemployment insurance); and income from 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 (+11.3% since 2007) than that of the nation (+8.1% since 2007), 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. 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. Washington County had the highest PCPI in 2017 at $57,331.
The three major components of per capita personal income – net earnings; transfer receipts; 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 68.0 percent of PCPI in Washington County and 66.5 percent in Multnomah County. In Wheeler County, per capita net earnings made up just 35.5 percent of PCPI.

Areas with a higher concentration of older residents can show lower PCPI. In Oregon, Malheur County ($30,231) and Jefferson County ($31,543) had the lowest PCPI. The reason an older population tends to have lower PCPI is that as people leave the labor force, they have often passed their peak earning years, and therefore have less contribution to the net earnings component of PCPI. Remember PCPI represents income, rather than wealth. Older residents may have substantial wealth, but do 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 one of age demographics.

In rural Oregon, the share of the population that is age 65 and older increased from 17.9 percent in 2010 to 22.8 percent in 2017. The retirement age population grew by 32.2 percent between 2010 and 2017, while the working age population and youth population declined by 2.2 percent and 3.6 percent, respectively. A higher share of retirees means a higher share of transfer receipts. The share of per capita income from transfer receipts was higher in Wheeler (37.8%), Malheur (35.9%), Jefferson (35.6%), and Curry (35.0%) counties. The lowest share of per capita transfer receipts was in Washington (11.8%) and Clackamas (13.1%) counties.
Income from dividends, interest, and rent was highest in Deschutes ($12,221), Hood River ($12,096), and Wallowa ($11,848) counties. It was lowest in Jefferson ($5,755) and Morrow ($5,800) counties.

Metro and Nonmetro

Metro areas across Oregon tend to have higher per capita personal income than nonmetro areas. In 2017, nonmetro areas ($38,588) in Oregon had PCPI that was just 79.5 percent of the metro figure ($49,786). In the U.S., PCPI of nonmetro areas amounted to 73.8 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 89.9 percent of the national PCPI in 2007 and 92.9 percent in 2017.

On the nonmetro side, Oregon’s PCPI kept pace with the national average for nonmetros. PCPI in Oregon’s nonmetro areas was 97.8 percent of U.S. nonmetro in 2007 and 100 percent in 2017.
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.

More information is available in the article “Oregon’s Per Capita Personal Income 2017”.

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