Median household income is an important reflection of economic well-being based on the diverse income streams of people living together.
The median household income in Oregon reached $76,554 in 2019, higher than the median US household income of $67,521.
Median household income is an important reflection of economic well-being based on the diverse income streams of people living together. It can be used to compare Oregonian income over time to the rest of the nation and other states between different types of households in Oregon and in different areas of the state.
Measuring household income is not easy. Oregon has only one true median household income, which is unknown, but there are several ways to estimate it. This article looks at three sources for US Census Bureau estimates of median household income, as each source brings a different strength to the analysis.
Not surprisingly, the different sources lead to different estimates of household income. Each source shows that the median household income in Oregon is not significantly different from that in the US. Having more than one data source can lead to slightly different conclusions about the economy. Reason enough to take a closer look at the median household income in Oregon. We need to understand exactly how household income is defined and which source is best in certain situations.
Let’s start with the definition of median household income. Then we go into the numbers.
The median income is the point at which half of the households earn more and half earn less. If you rank each household from lowest to highest income, the median would be the income of the household that’s right in the middle.
Looking at median income rather than average (mean) income is helpful because the measure is less affected by extremely high-income households. Income distributions are skewed because they are bounded by zero on the low end and essentially unbounded on the high end. The median is a better measure of the mean in such cases.
There are 1,649,352 households in Oregon with an average size of 2.6 people, which is close to the average US household size of 2.7 people.
A household is all the people who live in a dwelling unit, e.g. B. a house, an apartment, an RV, a group of rooms or a single room that is a separate living space. A household can consist of a single family, a person living alone, two or more families living together, or another group of people who share a common living situation.
Individuals not living in a dwelling unit are considered to be living in group housing and are not included in the median household income figures. Examples of group quarters are correctional facilities, nursing homes, mental hospitals, college dormitories, military barracks, group homes, missions, or shelters.
Income is the money that household members aged 15 and over received regularly in the previous year or in the last 12 months. This is before personal income taxes, Social Security, union dues, and Medicare deductions are removed.
Benefits in kind such as food stamps, health care, subsidized housing or goods produced and consumed on the farm are not included.
Oregon’s household income is similar to that of the nation for most years
Average household income in Oregon has been very similar to that of the US over the past 30 years. For most years, there was no statistical difference between household incomes in Oregon and the United States. However, job growth in Oregon has been stronger than in the US since 2013, and the average real hourly wage started to increase in 2015. The better job market helped Oregon’s median income soar to $65,451 in 2014-2015, exceeding the US median household income of $60,237. Oregon’s median remained higher than the US in 2019-2020, standing at $75,948 compared to the US’s $68,541.
Historical estimates of median household income are based on the Current Population Survey Annual Social and Economic Supplement (CPS ASEC). Every March, the survey asks a sample of households about their income in the previous year. This is the official source for national median household income estimates and the recommended source for comparing national income to states. It is the source of median household income figures in the opening paragraph of this article. However, the Census Bureau recommends using two-year averages when considering state-level income trends prior to 2006.
The Census Bureau redesigned the CPS ASEC income questions, beginning with the 2013 data. This was done to improve income reporting, increase response rates, reduce reporting errors, and expand the questions about retirement income and income from retirement accounts and all other assets To update. The redesign resulted in a break in the data series, as post-2013 data is not directly comparable with pre-2013 data.
Oregon has the 19th highest household income
Oregon’s median household income ranked 19th among the states of Washington, DC and Puerto Rico in 2019. Median household income is higher in neighboring states of California and Washington and lower in Nevada and Idaho.
The Census Bureau recommends using estimates from the American Community Survey (ACS) to compare median household income across states. The ACS surveys many more households (around three million nationwide) than the CPS (around 100,000 nationwide). The larger sample size of the ACS results in income estimates with smaller margins of error and makes status comparisons more reliable.
According to ACS estimates for 2019, the median household income in Oregon was $67,058, which approximates the US income of $65,712. While Oregon median household income is higher in both the CPS-based estimates and the ACS estimates, the gap between the two is narrower in the ACS estimates. The difference comes from the number of households surveyed and the way the survey is conducted. For example, the ACS asks for income for the last 12 months, while the CPS asks for income for the previous year.
Oregon income is not dramatically higher than the nation’s, as in Maryland, Washington DC, Hawaii, and Alaska, or lower than the nation’s, as in Mississippi, Arkansas, and West Virginia.
The ACS does not have a long historical line like the CPS. This makes it impossible to use ACS for long-term comparisons of state and US income levels.
There are significant income differences by household type
There are 1,649,352 households in Oregon. Every fourth household (397,407) has no income from work. All your income comes from investments (interest, dividends or net rental income); Social Security; retirement or disability income; Social care; or other types of income. You do not have income from wages or salaries from dependent work or net income (after deduction of expenses) from agricultural and non-agricultural self-employment.
Household income varies according to the age of the head of household. It seems to reach an ideal point where the head of household is between 45 and 64 years old and the median is $80,418. This is slightly higher than the median income of $75,719 for households when the head of the household is 25 to 44 years old. The median household income is only $36,705 if the head of household is under 25 and $50,499 if the head of household is 65 and older. The head of household is the adult in the household who owns or rents the dwelling unit. It can be anyone if the house is owned or rented by a married couple.
Although the median household income in Oregon is $67,058, there are significant income disparities based on the race and ethnicity of the householder. Household income is much higher when the head of household is Asian ($82,016) and slightly higher than overall when the head of household is white and not Hispanic or Latino ($68,593). Household income is less than total income if the household is Black or African American ($47,181), Native American or Alaskan Native ($52,652), or Hispanic or Latino of any race ($60,597).
Household income highest in Washington County, lowest in Wheeler County
The median household income ranges from a high of $85,665 in Washington County to a low of $39,874 in Wheeler County. Urban counties in Oregon tend to have higher median household incomes than rural counties.
The figures used in the national comparison of urban and rural household incomes are based on data collected by the ACS. For county-level income estimates, the Census Bureau recommends using figures from the Small Area Income and Poverty Estimates (SAIPE) program. These are model-based estimates that combine data from administrative records, population estimates, the decennial census, and the ACS to produce household income estimates for areas with fewer than 65,000 residents.
Whichever way you look at it
Oregon’s median household income is fairly close to the national median and differs slightly depending on which estimate we’re looking at. It’s slightly higher when you look at the official estimate of national household income, as well as when you look at the source that polls more households. In a few years, these comparisons may differ.
Household income can vary widely depending on the age, race and ethnicity of the head of household. Location also plays a role, as median incomes vary widely by state and county, and households in urban counties generally have higher incomes than households in rural counties.
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