Retirees collecting Social Security got their biggest raise in four decades at the start of the year, an 8.7% jump in the size of their checks — $146 more each month, on average.

Meant to keep pace with inflation, the increase may seem small in the context of two years of rapidly rising prices. But state economists say it’s very meaningful — especially in parts of the state with a high concentration of retirees.

“Looking across Oregon, Social Security accounts for more than 1 in 10 dollars households earn in many coastal, southern, and eastern counties,” the Oregon Office of Economic Analysis wrote in their quarterly revenue forecast last month.

Social Security uses a formula based on the Consumer Price Index to determine how much checks increase from year to year. With inflation low in the years after the Great Recession, annual increases were typically small. There was no increase at all in 2009, 2010 and 2015.

Since inflation remains elevated again this year — albeit not quite as elevated as in 2022 — Social Security recipients can expect another bump in their checks next year. (The federal government will set the amount in October.)

Nationwide, retirees’ monthly Social Security checks now average $1,847. State economists say a third of Oregon seniors receive essentially all their income through the program. It represents more than half of monthly income for 6 in 10 seniors.

Statewide, the bigger Social Security checks will have the same economic impact as adding 22,000 jobs, according to the economics office.

Social Security is especially meaningful in parts of Oregon with older residents, or lower per-capita income. Many of those are the same places.

In Oregon, Wheeler and Curry counties are the most dependent on Social Security. The program provides about 15% of all personal income in those counties, according to the state economists. Compare that to Washington and Multnomah counties, where Social Security is just 4% of personal income.

Since the Social Security Administration increases payments based on the rate of inflation in prior years, they lag the actual price increases. In periods of rapid inflation, that means the bigger checks only compensate for last year’s inflation — not the higher prices people are paying right now. That puts people who depend on these checks in a bind.

Nonetheless, state economists say that when the bigger checks do arrive, they help lift entire communities.

“Even if these (increases) are playing catch-up to reality in terms of inflation,” they wrote, “they are a real … boost this year that will disproportionately support households and spending in our rural economies.”

This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.— Mike Rogoway at mrogoway@oregonian.com