Growth in Income
In 2002, per capita income in Washington was estimated at $32,750 in current dollars, 2.6 percent above the national average. The projected state per capita income in 2020 will be, inflation adjusted, 47 percent higher than the 2002 level, and 1.3 percent above the forecasted national average.
[Chart 1 – Growth in Per Capita Income]
[Table – State Per Capita Income Comparison]
The table shows that Washington ranked 13th highest in the United States in per capita income in 2001. California ranked 10th and Oregon ranked 29th, while Idaho ranked 42nd.
In 2002, the state’s total personal income was $198.6 billion, 2.2 percent of the nation’s total personal income. The projected total state per capita income in 2020 will be, inflation adjusted, 83 percent higher than the 2002 level, and 2.4 percent of the nation’s total personal income.
[Maps of per capita income by county and change over time in Washington being developed.]
[Chart 2 – Growth in Washington’s Total Personal Income]
Personal income growth fluctuates with business cycles. Personal income growth in Washington closely mirrors the national trend, but with more erratic and volatile short-term movements. During most of the expansionary periods in the economy, the state per capita income rose faster than the U.S. average. Conversely, per capita income growth in the state usually plummeted below the national trend during recessions or periods of slow economic growth. Excluding recession periods, the state personal income trends seem to have fluctuated within a range of two-to-four percent growth rate.
In the past, growth in the state’s aerospace industry, along with the industry’s high wages and salaries, played a major role in the growth of Washington personal income. In the future more stable income growth is expected due to the declining role of cyclical industries and the growing diversification of the state economy.
[Chart 3 – Annual Changes in Real Per Capita Income]
Over the long run, per capita income in Washington has trended closely with the national average. However, the volatility of certain manufacturing and resource-based industries in the state periodically narrowed or widened the per capita income gap between Washington and the nation. Oregon and Idaho have trended below the national average, while California’s per capita income has remained above Washington.
[Chart 4 – Ratio of Washington to U.S. Per Capita Income]
[Chart 5 – Ratio of Pacific Northwest States to U.S. Per Capita Income]
Source: “2003 Long-Term Economic and Labor Force Forecast,” OFM and ESD