Personal income — one of the most pertinent barometers of local and regional economies — often is overlooked, according to economist Gary Smith, whose office is based out of WSU’s Puyallup Research and Extension Center.
“Without question, personal income is far and above the best available local indicator of general purchasing power,” Smith said. “Therefore, it is central to tracking and comparing what’s happening in the local economy over time and in comparison to other counties and regions.
“It’s easier for people to look at the local economy in terms of jobs or wages and salaries generated by jobs. Or they look at demographics. You can easily count people and jobs, but when you look at incomes (household totals from all sources), people start feeling uncomfortable (with disclosing or investigating personal information) and step away from it.
“The income side not only brings into view earned incomes from the workplace, but also incomes that result from people owning assets — including dividends, interest and rent — as well transfer payments, such as government pensions, social security and unemployment insurance.”
Smith says a lot of income that enters a region is not directly related to jobs, but when that income is spent locally, it then generates jobs and enhances the sales-tax base for local governments.
“When somebody from WSU retires and stays in Pullman, they are no longer employed in the workforce but they are bringing a lot of dollars into Pullman as a result of their retirement pensions and the incomes from the other assets they own.”
He said only 63 percent of the personal income in Whitman County is earned income; the remainder is derived from property income and transfer payments. “This is not at all unusual. In fact, it’s pretty typical.”
When Smith joined the WSU faculty in 1983, he began publishing economic reports on individual counties in Washington utilizing personal income data compiled by the U.S. Bureau of Economic Analysis.
He created the Northwest Income Indicators Project website, http://niip.wsu.edu, in 1998 to take advantage of the new Internet technology. Now, visitors can generate and publish customized reports containing graphics, tables and narratives examining economic trends drawing from the data compiled by the Regional Economic Information System of the Bureau of Economic Analysis. The website encompasses 197 counties across the Pacific Northwest. The annual data spans 35 years from 1969 to 2003. Users can make state-to-state comparisons nationwide.
“I am looking at your site now, and it is literally mind blowing,” wrote Evelina Tainer Loescher, chief economist at Econoday and author of “Using Economic Indicators to Improve Investment Analysis.”
“How many years did it take you to put this up? It is amazing.”
