by Charles Johnson
Oregon Employment Department 6/23/09
Oregon’s per capita personal income growth has fallen behind national trends in recent years – in fact, the national growth rate was more than double Oregon’s rate from 2003 to 2008 (see Oregonians are Losing Ground to the Average American in last month’s issue). Just as per capita personal income differs between states throughout the nation, it also differs between counties within each state. In Oregon, the metropolitan areas dominate both the level and growth of income per capita.
Between 2002 and 2007 the inflation adjusted per capita personal income of Oregon’s metro counties rose from $36,532 to $38,467, a 5 percent increase. Non-metropolitan counties throughout the state experienced a 4 percent increase over the same time period, from $28,378 in 2002 to $29,626. In 2007, the average person in one of Oregon’s non-metropolitan counties was receiving an income that amounted to 77 percent of the average income in the state’s metro counties.
A Measure of Wealth
Per capita personal income is a figure calculated by the Bureau of Economic Analysis and is defined as the annual sum of all resident income divided by the resident population on July 1st of each year. Included in personal income are things like net wages and salaries, government and business transfer payments, and dividend and interest income. Once adjusted for inflation, the per capita personal income figure is valuable in comparing how the residents of one area are faring over time and how they compare to the residents of other areas. This figure is pertinent and easy to apply to one’s daily life. It is literally how much money the average person has to buy the things they need (before taxes, of course).
Per capita personal income data at the county level is available one year after the release of statewide data. Therefore, the most current county level data is for 2007 while Oregon’s statewide figures have been updated through 2008. For ease of comparison with last month’s article, all of the values discussed at the county level have been adjusted for inflation and are reported in 2008 dollars.
Oregon’s Five-Year Growth Affected by Recession
Oregon’s per capita personal income declined in both 2002 and 2003 as a result of extended economic weakness from the 2001 recession. Oregon’s figure finally topped the 2001 level in 2004, and continued to grow through 2007. As a result of the 2001 recession, the statewide per capita personal income level grew at an annualized rate of 1 percent per year from 2002 to 2007 – slightly lower than the 1.4 percent annual average measured from the beginning of the series in 1969. Overall, the level rose from $34,659 in 2002 to $36,492 in 2007 – an increase of 5 percent.
Metro Area Residents Enjoy Greater Incomes
The average resident living in one of Oregon’s metropolitan areas in 2007 had an income of $38,467; the average non-metro resident earned just $29,626 during the same year – a difference of $8,841. The difference between the two income levels, while significant, is not the greatest on record. In the year 2000, Oregon’s metropolitan counties had a per capita personal income level that was $9,761 greater than their non-metro counterparts’ (Graph 1). Additionally, the per capita personal income level of the state’s non-metro areas didn’t decline in 2002 or 2003 (dipping just slightly in 2005), indicating that the 2001 recession may have impacted Oregon’s metro counties more significantly than rural areas. Regardless of how the recession impacted the metro counties, they still posted a greater rate of per capita personal income growth over the five-year period – 5 percent compared to the non-metro rate of 4 percent.
Of Oregon’s metro areas, the Portland metropolitan statistical area (MSA) had the greatest per capita personal income in 2007 ($40,333) while the Salem MSA had the smallest figure ($31,543). However, the Medford MSA enjoyed the greatest income growth over the period (10%) while the Corvallis area experienced just 2 percent growth from 2002 to 2007, the lowest rate of any metro area. The other two metro areas, Bend and Eugene-Springfield, both enjoyed robust 8 percent growth in per capita personal income over the period.
Gorge Counties See Growth, Polk County Drops
While the metro versus non-metro comparison holds true for most counties throughout the state, those counties in north-central Oregon – bordering the Columbia River – definitely broke the trend, and the charts. Hood River, Wasco, Sherman, Gilliam, and Morrow counties posted a collective 26-percent increase, from $25,302 to $31,834, in per capita personal income from 2002 to 2007. The area was led by Gilliam County, which experienced an increase of 43 percent. Morrow County’s figure was the highest in the area ($33,311) and ranked 9th in the state, up sharply from its rank of 29th in 2002.
The area’s strong growth in per capita personal income may be partially due to population trends; the population of the five-county area increased 4 percent from 2002 to 2007 compared to a statewide increase of 7 percent. Gilliam County’s population decreased by just less than 1 percent over the period.
Polk County, a metropolitan area included in the Salem MSA, saw its per capita personal income shrink from $30,735 in 2002 to $29,459 in 2007 – a 4-percent decrease and the worst performance of any county in the state. The decline resulted in Polk County’s figure being ranked 25th in 2007, down sharply from 11th in 2002.
The majority of counties throughout the state had per capita personal income levels and growth rates that were representative of their metro or non-metro status (Figure 1). Clackamas County (metro) led the state with a figure of $45,653 in 2007, up 8 percent from 2002. Malheur County (non-metro) posted the lowest figure in 2007 at just $22,567, up only 1 percent over the period.
Clackamas, Multnomah, Washington, Benton, and Deschutes counties had the five highest per capita personal income levels in both 2002 and 2007 – they are all metropolitan areas. Wheeler, Baker, Crook, Jefferson, and Malheur counties, all non-metro areas, ranked near the bottom of all counties in both years. In fact, only two metropolitan counties (Marion and Polk) didn’t rank in the top ten in either year and only three non-metro counties (Morrow, Hood River, and Clatsop) did rank that high.
Oregon’s statewide per capita personal income shrank nearly 2 percent from 2007 to 2008, indicating that many of Oregon’s counties also experienced a decline last year. It is likely that metropolitan areas would experience a decline in their per capita personal income in conjunction with the beginning of the current recession, similar to the trend shown after the 2001 recession. Therefore, last year’s decline may be more apparent in metropolitan counties, while non-metro counties may post declines to their figures for a longer period after the current recession has ended. Given the length and depth of the current downturn, it is very unlikely that any county within the state will escape a decline in per capita personal income over the next few years.
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