Behind Oregon budget woes, a slide in incomes
By TIM FOUGHT
Associated Press
Saturday, July 17, 2010 10:02 PM PDT
PORTLAND — Behind the state’s budget crisis this summer lies a brutal economic truth: Relative to the rest of America, Oregon is getting poorer.
Oregon has been getting poorer, in relative terms, for decades, and the Great Recession has brought the state to a low point.
Oregon now ranks 32nd among the states in per capita personal income, and Oregonians earn slightly more than 90 percent of the national average of the same measurement.
These are the lowest figures for Oregon since the federal government started keeping the measurement — about the same time the stock market crashed in 1929. It’s not that Oregonians haven’t been able to raise incomes over the years.
Adjusted for inflation, Oregon’s per-capita income is higher today: $35,000 in 2009, compared with, for example, $21,000 four decades earlier.
But the rest of the country has done better, raising incomes faster on average. So, Oregon is falling behind.
That makes the painful cuts in schools and government expected in coming months just the public symbol of how Oregonians at large are adjusting to a long-term slide relative to other Americans in income.
Economists say the relative measure is significant because as Oregonians’ income drops in relation to that of the rest of the country, it falls behind other states in its ability to pay for consumer goods and government services. That’s especially true with expenses that rise rapidly, such as health care.
‘‘If you can’t generate income to keep up with those prices, clearly you have a challenge,’’ said economist Tim Duy of the University of Oregon.
Per capita personal income doesn’t get so much public attention as economic numbers such as the rates of unemployment or interest. It’s a broad measure, tracking wages, salaries, transfer payments such as Social Security and business related sources such as dividends, interest and rental payments. It doesn’t include corporate income.
People who track the state over the long term watch the figure closely and, in recent years, with increasing worry.
Before it was abolished in a round of budget cutting last year, the Oregon Progress Board called it the top economic ‘‘area of concern’’ among dozens of benchmarks it tracked.
This summer, a panel of close advisers to Gov. Ted Kulongoski said the figure was fundamental to its conclusions: Oregonians could no longer afford their state government, there was little prospect that economic growth would allow them to regain their purchasing power, and a wrenching ‘‘reset’’ would be required, slashing government expense well beyond the 9 percent in cuts the governor called for last month.
In a sense, this slide is an old story in Oregon.
Conrad wrote on Jul 18, 2010 12:39 PM: