Per-capita personal income is a gold-standard measure of well-being, but it has its limitations.
The Seattle-Tacoma-Bellevue metropolitan area turned in fairly strong growth — 4.5 percent — in per-capita personal income for 2015. The same didn’t hold for last year, according to data released today by the federal Bureau of Economic Analysis. Income advanced only 2.7 percent. King County grew 2.2 percent vs. 5.1 percent the previous year.
At an average $64,553, metro personal income remained well ahead of the national average of $42,246.
Pinning down the “why” is difficult. Personal income is counted from all sources, from wages and rents to government transfer receipts. Last year, income growth slowed down nationally: Up only 1.6 percent on a per-capita basis. In 2015, it grew by 4.2 percent. Real GDP growth was uneven last year. Worker bargaining power continues to suffer.
Since 2000, labor’s share of national income has fallen to historic lows, helping to widen inequality. A big factor behind this trend is illuminated by a new report from the McKinsey Global Institute, showing that job losses in manufacturing are to blame for more than two-thirds of the fall in labor’s share of GDP since 1990.
Another potential factor in last year’s weak income growth: The investor class rode the bull market last year, too, keeping more money there and not taking big capital gains that show up as income.
Per-capita personal income is a gold-standard measure of well-being, but it has its limitations. One is the wide net it uses to measure income. It doesn’t factor in purchasing power in individual locations. Finally, each year’s report is a snapshot in time. Even for Seattle, the glory days of annual growth were the late 1970s.
Highlights elsewhere in the Northwest for 2016 include:
- Anchorage, down 2.5 percent, $57,796.
- Boise, up 1.6 percent, $40,943.
- Bremerton-Silverdale, up 3.4 percent, $49,709.
- Kennewick-Richland, up 3.4 percent, $42,156.
- Olympia-Tumwater, up 3.4 percent, $45,932.
- Portland, up 2.6 percent, $50,489.
- Spokane, up 3 percent, $41,414.
Today’s Econ Haiku:
Peltz won his board seat
So let the looting begin
And don’t soft soap me