Oregon Wages: Low because we like it here?

By Josh Lehner
Oregon Office of Economic Analysis Blog
Oregon’s total personal income was just over $173 billion in 2015, while Texas’ was more than $1.28 trillion. Per capita personal income (PCPI), however, was $42,974 for Oregon and $46,745 for Texas.

Net earnings per capita increased by $1,134 over the year in Oregon, while per capita dividends, interest, and rent increased by $192, and per capita transfer receipts increased by $428. All three components remained relatively stable as a share of PCPI for the state with only a 0.1 percentage point to 0.3 percentage point change.

Oregon’s PCPI has remained close to the U.S. level since estimates began in 1929. The largest difference between the Beaver state and the U.S. came in 1943 when Oregon climbed to its peak of 123.8 percent of the national level. Oregon’s PCPI was consistently above the U.S. from 1938 to 1956 when incomes were bolstered by defense manufacturing for World War II and the post-war economic boom. In 1943, war-related manufacturing propelled Oregon’s PCPI to its highest level relative to the nation.

In 2007, Oregon’s PCPI dropped below 90.0 percent of the national level for the first time. And the state’s PCPI reached its lowest relative point (88.3%) in 2012. This was largely influenced by two main factors; the Great Recession of 2007 to 2009; and Oregon’s fast population growth. The Great Recession brought job loss and lower earnings while at the same time Oregon’s population grew by 6.2 percent between 2006 and 2012.

Over the past three years, Oregon experienced a slow upward trend in PCPI relative to the U.S. level. Population growth works to drive PCPI downward, while income growth works to drive PCPI upward. Oregon’s 2015 population growth rate was eighth in the nation. The 2015 total personal income growth rate was second in the nation.

Continued economic expansion that includes fast job growth, potentially high wages, technology-based industries, and increasing opportunity, along with an attractive Oregon lifestyle is, well …very attractive. This encourages immigration while discouraging emigration. The grass is green in Oregon. And that’s one reason why Oregon’s PCPI was 90.2 percent of the U.S. PCPI in 2015.

To learn more about how Oregon’s per capita personal income compares with other states, read Chris Rich’s full article: “Oregon’s Per Capita Personal Income 2015: Low Because We Like it Here?”.

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