Urban-rural wage gap is steady

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Archives - October 2008
Wednesday, October 01, 2008

Coins STATEWIDE The often-cited widening gap between urban and rural wages actually has remained unchanged over the past decade, while both urban and rural wages are slipping compared to their counterparts nationwide.

“This is not such good news for rural areas, and it’s not good news for urban areas,” says state employment economist Art Ayre, who did the analysis.

After adjusting for inflation, the urban-rural wage gap has been fairly stable since 1997, says Ayre. “In the unadjusted data, what you were seeing was increasing inflation more than a widening of the gap,” he says. In 1997, average annual earnings for a metro-county worker were $26,944, and for a rural county worker they were $22,051. In 2007, that was $37,236 for a metro worker and $30,191 for a rural worker. After adjustment to 2007 dollars, the wage difference was $7,046 in 1997 and $7,045 in 2007. Counties classified as metro are Benton, Clackamas, Columbia, Deschutes, Jackson, Lane, Marion, Multnomah, Polk, Washington and Yamhill. Rural counties are all other.

Additionally, for the first time in eight years, the average earnings of workers in rural Oregon have fallen below their counterparts nationwide. Until 2006, the latest year for available data, rural wages in the state were at 97% of U.S. rural wages. The wage gap for metro workers in Oregon vs. the nation is even bigger, with those wages at 86% of average U.S. metro wages.

“Oregon just does not have the really large metro areas that the U.S. on average has, and large population centers drive higher wages,” says Ayre.

Being close to a large population center also affects prosperity of rural communities. A recent report by Oregon State University economists says remoteness is the main cause of disparities between communities that flourish and those that do not. The greater the distance between a community and its closest urban neighbor the less likely it is to prosper. That holds true nationwide, the study says, where the communities with the lowest wages are those in the most remote areas.               

ROBIN DOUSSARD


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Editor's Letter: Power Play

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There’s a fascinating article in the December issue of the Harvard Business Review about a profound power shift taking place in business and society. It’s a long read, but the gist revolves around the tension between “old power” and “new power” as a driver of transformation. Here’s an excerpt:

Old power works like a currency. It is held by few. Once gained, it is jealously guarded, and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven. It downloads, and it captures.

New power operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. It uploads, and it distributes. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.

The authors, Henry Timms and Jeremy Heimans, don’t necessarily favor one form of power over another but merely outline how power is transitioning, and how companies can take advantage of these changes to strengthen their positions in the marketplace. 

Our Powerbook issue might be viewed as a case study in the new-power transition. This annual book of lists provides information on leading businesses, nonprofits and universities in the state. Most of the featured companies are entrenched power players now pursuing more flexible and less hierarchical approaches to doing business. Law firms, for example, are adopting new technologies and fee structures to make legal services more accessible and affordable.

This month we also take a look at a controversial new U.S. Securities and Exchange Commission rule requiring public companies to disclose the median pay of workers, as well as the ratio between CEO and median-worker pay. 

Part of the 2010 Dodd-Frank financial reform law, the rule will compel public companies to be more open about employee compensation, with the assumption that greater transparency will improve corporate performance and, perhaps, help address one of the major challenges of our time: income inequality.

New power is not only about strategy and tactics, the Harvard Business Review authors say. “The ultimate questions are ethical. The big question is whether new power can genuinely serve the common good and confront society’s most intractable problems.”

That sounds like a call to arms. Or a New Year’s resolution. Old power or new, the goals are the same: to be a force for positive change in the world. Happy 2015!

— Linda


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