Oregon’s total personal income ranked 22nd in the nation in 2020, moving up three places from its 2019 rank.
Data on personal income comes from the Bureau of Economic Analysis (BEA) – a division of the U.S. Department of Commerce.
State personal income captures total income within a state and is the sum of three main components: net earnings (wages, salaries, employer contributions); personal current transfer receipts (retirement, Medicare, unemployment insurance); and dividends, interest, and rent.
Growth in personal income for the U.S. overall averaged 6.6% in 2020, much higher than the previous year’s growth rate of 4.1%. For individual states in 2020, growth ranged from a 1.7% increase in Wyoming to a 10.3% increase in Arizona. Personal income grew by 8.0% in Oregon in 2020, which was the fifth fastest in the nation (tied with Kentucky). According the Bureau of Economic Analysis, changes in personal income since February 2020 primarily reflected changes in governmental social benefits, stemming from the enactment and expiration of legislative acts and related programs during the pandemic (detailed in this BEA graph).
Per Capita Personal Income
The size of a state’s population plays a predominant role in the size of its personal income. California, Texas, New York, Florida, Illinois, and Pennsylvania – six of the most populous states in the nation – are also the top six states in terms of total personal income. South Dakota, North Dakota, Alaska, Vermont, and Wyoming – five of the least populous states in the nation – are also the bottom five states in terms of total personal income.
By dividing a state’s total personal income by its total population, we obtain per capita personal income (PCPI). This gives us a number that is more easily compared with other states. For instance, Oregon’s total personal income was just over $239 billion in 2020, while Texas had income of more than $1.6 trillion. Per capita personal income, however, was $56,312 for Oregon and $55,129 for Texas.
Adjusting to PCPI adjusts the income rankings of states as well. Connecticut ranked 23rd in total personal income but ranked first in the nation in PCPI. Mississippi ranked 35th in total personal income, but Mississippi ranked last of the states in PCPI. Oregon ranked 25th in total personal income, but ranked 22nd in per capita personal income.
Comparison of PCPI Components
For the United States as a whole, 59.9% of PCPI came from net earnings in 2020. Connecticut took the top slot ($49,142) and Mississippi took the bottom ($22,802) in dollar value of per capita net earnings. For Connecticut, 62.5% of PCPI came from net earnings and for Mississippi it was 54.1%. Oregon ranked 26th among the states in per capita net earnings ($32,523), which accounted for 57.8% of the state’s PCPI in 2020.
Many states ranked similarly in dividends, interest, and rent per capita as they did in net earnings per capita. Connecticut ranked second and Mississippi 50th. Oregon ranked 25th in dividends, interest, and rent per capita ($10,398). Typically, Oregon ranks higher in per capita dividends, interest, and rent (ranked 20th in 2019 with $11,196).
States that rank high in per capita net earnings typically rank lower in per capita transfer receipts and states that ranked low in per capita earnings typically rank higher in per capita transfer receipts. This makes sense. If you are earning income, either through wages, dividends, interest, or rent, then you are less likely to need transfer receipts to cover basic living expenses. However, during the Pandemic Recession, direct economic impact payments were paid to the majority of U.S. households in 2020 regardless of employment status. Oregon, which ranked near the middle in per capita net earnings and 25th in per capita dividends, interest, and rent, moved to 17th highest in per capita transfer receipts ($13,391). Connecticut ranked 18th ($13,087) and Mississippi 14th ($10,310) in per capita transfer receipts.
Oregon’s Population-Driven Relative Trend
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% 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 2009, Oregon’s PCPI dropped below 90.0% of the national level for the first time. And the state’s PCPI reached its lowest relative point (88.3%) in 2011. 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 increased as well. Many states with high annual growth in population are also states with low annual growth in PCPI. This relationship can greatly impact a state’s per capita income relative to the national level.
Oregon’s PCPI relative to the U.S. showed a slow upward trend from 2011 to 2019. In 2011, Oregon’s PCPI was 88.3% and by 2019 it had reached 93.6% of the U.S.’s PCPI. Boosted by Federal relief payments, Oregon’s PCPI relative to the nation’s increased by 1.0 percentage point from 2019 to 2020. Population growth works to drive PCPI downward, while income growth works to drive PCPI upward. Oregon’s 2020 population growth rate was 0.6%, in the top 15 of the nation. The 2020 total personal income growth rate was 6th in the nation. Oregon’s PCPI growth rate was 10th in the nation.
Sarah Cunningham is an economist with the Oregon Employment Department. She may be reached at 503-871-0046.