The 2022 American Community Survey is our first real, post-pandemic look at the socio-economic characteristics of Oregonians. Last week we dug into the details of who moved away from Oregon. This week we will highlight changes in household income and poverty. In the weeks and months ahead there will be more to come in terms of employment, working from home, household formation and the like, sprinkled in among the other work our office is doing.
Big picture, the good news continues to be that the typical Oregon households earns more money than the typical American household. These income estimates during the pandemic are challenging given a lot of the federal aid that offset economic losses came in the form of recovery rebates, which were refundable tax credits and therefore not earned income. That said, another piece of good news in the data is that household incomes overall are (barely) keeping up with inflation. Nominal gains have been quite strong, but so too has inflation, eroding those gains from a living standard perspective.
There are a few key distinctions to be made between the 2022 changes, compared to the changes over the entire cycle to date. On one hand, Oregon’s median household income increased 5.7 percent last year. Inflation as measured by the PCE index rose by more than 6 percent, while other measures of inflation like the CPI increased by 8 percent. As such, real Oregon income for the typical household declined last year. A lot of us lost ground. On the other hand, over the entire inflationary economic boom to date, inflation-adjusted incomes are holding steady.
Similarly, Oregon’s growth was a bit slower in 2022 than the nation’s 7.2 percent gains, while over the entire cycle Oregon’s growth ranks in the middle of the pack at 30th across all states. This fits in with the previously discussed composition of growth this cycle, where Oregon lags a bit on population and employment, is in the middle of the pack for income, and is among the national leaders for capital investment and productivity gains.
If we look at some key factors impacting household income, labor income in particular, there are some key differences this cycle. Last decade it was all about recovering from the financial crisis and getting people back to work. This cycle it hasn’t been about jobs and hours worked, which are more than recovered over a relatively short period of time, but rather wage gains workers are seeing. Household income gains are being driven by wage growth among workers.
Deeper analysis requires the microdata that will be available in a couple of months. But these topline published tables from Census do show income changes by race and ethnicity, and at the metro level.
In terms of inflation-adjusted income gains over the entire cycle by race and ethnicty in Oregon, Asian and Black housheolds have seen the largest increases. On a nominal, or non-inflation adjusted basis, all major racial and ethnic groups have seen increases, but inflation erorded those gains for many households. The one exception is among Native Hawaiian and Pacific Islander households. Historically, given Oregon’s relatively low levels of diversity and small sample sizes, some of these numbers can bounce around quite a bit even if there is an underlying trend. This is certainly the case in recent decades when it comes to ACS data on our Pacific Islander neighbors, as you can seen in last year’s post once the microdata became available. As such, more research required.
At the metro level, there are a lot of interesting patterns seen. This next chart is a scatterplot of all 384 metros nationwide with complete data here, looking at the change in the median or typical income on the horizonal, x axis, and changes in the average income on the vertical, y axis. Such a chart not only shows income growth, but also whether there is a skew to the change. The scatterplot also puts our local metros in perspective to changes across the country. 5 things stand out to me in this data, and all require further analysis as we get more data.
One, the exceptionally strong gains seen in average income in both Bend and Grants Pass. The Bend MSA (Deschutes County) increases rank 4th strongest across the entire nation, while the Grants Pass MSA (Josephine County) increases rank 11th strongest. All the while, the median, or typical household in these areas saw good, strong growth as well, but right there in the middle of the pack. This relative pattern does mean the number of higher income households in these metros increased at a much faster rate, leading to a shift in the local income distribution.
Two, the median household income growth in the Medford MSA (Jackson County) stands out. The 23 percent increase over the entire cycle (not adjusted for inflation) ranks 37th fastest nationwide, which is faster than 91 percent of all metros. The local average income also increased 50th fastest.
As an aside, the overall good income gains in southern Oregon — both Grants Pass and Medford — during this cycle so far stand out compared to last decade. At the time, regional growth didn’t really pick up until mid- to late cycle, and then the relative ground lost following the housing bust and financial crisis was never fully regained by the time the pandemic hit. And then layer on top of that the devasting wildfires in 2020 as well. Using a multi-year average to help smooth the year-to-year noise in the data finds that Medford’s relative income position compared to the statewide numbers hasn’t been this strong since the mid-2000s.
Three, just a quick note and reminder that despite the negative headlines, and the real social challenges, Portland’s economic performance continues to be right in the middle of the pack. Median household income growth ranks in the 52nd percentile nationwide, while average income growth is a bit stronger at the 70th percentile.
Four, the somewhat slower income gains across the rest of the Willamette Valley are noteworthy and further study required. Initially, the mid-Valley saw stronger growth in the pandemic as folks spread out during the pandemic. Did that suddenly reverse as the pandemic ended or is this just more about year-to-year noise?
Five, even with that said, the population losses and lack of income growth in the Corvallis MSA (Benton County) stands out. This is something we will dig into further as well. And my first thought was maybe it’s something about colleges, but the patterns seen in Corvallis and Eugene are a bit different, and while some other college towns, like Ann Arbor MI, see similar patterns as Corvallis, it’s not everywhere, even if the local patterns are something to pay attention to.
This next bar chart shows inflation-adjusted changes in median household income across Oregon’s metro areas. Inflation eroded much of the gains in recent years, and even turned the mid-Valley income gains into inflation-adjusted income losses, while Medford, Bend, Portland, and Grants Pass saw real gains.
Next, let’s turn our focus from income gains to changes in poverty among Oregonians. This can be a bit confusing but there are two different measures of poverty — the official poverty measure, and the supplemental poverty measure — and two different data sources — the CPS ASEC and the ACS. We will stick with the official poverty measure as reported in the ACS to start.
From 2021 to 2022, Oregon’s poverty rate ticked down slightly to 12.1 percent, which is half a percent below the US figure. Poverty is up from the multidecade low reached just prior to the pandemic, and in the first year of the pandemic, but is lower than it has been throughout the rest of the 2000s and 2010s (that’s because, on average, the economy in the 2000s and 2010s was bad given the two recessions and jobless recoveries that followed.) Even so, 1 in 8 Oregonians lives below the federal poverty line today.
The supplemental poverty measure increased last year, as it takes into account regional housing costs, in addition to a lot of different public aid programs that do not count as earned income and the like. A big part of last year’s increase was among children, due to the expiration of the enhanced federal child tax credit. There were quite a few national stories on this last week, which you may have seen.
This next chart updates our office’s look at the racial poverty gap in Oregon. While Asian Oregonians experience poverty a few tenths of a percent less than their white, non-Hispanic neighbors, we know that other racial and ethnic groups experience poverty at higher rates. In 2022, 14.3 percent of BIPOC Oregonians lived below the poverty line, while 11.2 percent of white, non-Hispanic Oregonians did. This 3.1 percentage point gap is the smallest on record, and is another datapoint to confirm that the recovery from the pandemic has been the fastest, most complete, and most inclusive one in our lifetimes, even if longstanding disparities remain.
At a more detailed level, from 2021 to 2022, and really over the entire cycle to date, poverty rates have held steady among American Indian and Alaska Native, and Hispanic and Latino Oregonians. Ground has not been lost, but also has not been gained. Poverty among Black Oregonians initially increased in the pandemic but has now declined to be nearly back to where it was in 2019, which was an all-time recorded low.
Stay tuned for more as our office continues to tunnel through the mountain of data.