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|Friday, May 02, 2014|
BY ERIC FRUITS | OB BLOGGER
Oregon’s March job growth was the strongest in nearly a decade. The state Employment Department reports that employers added about 7,500 jobs statewide last month, which was the biggest monthly gain since November 2005. The improving economy looks to be luring people back into the labor force, with more than 7,000 added to the labor force.
The recent good news, however, belies deeper long run troubles in Oregon employment and incomes.
The sketch comedy show Portlandia gave the city a reputation as the place where young people come to retire. The figure below shows that there may be a grain of truth in that assessment.
Until the mid 1990s, Oregon had a go-getter workforce. Labor force participation was about 2 percentage points higher than the U.S. average. Our above average unemployment rate was as much because of people wanting to work as it was because of people who couldn’t get work.
Around 1994—coinciding with the spotted owl controversy and the Northwest Forest Plan—labor force participation began to drop. The 2001 recession hit the Oregon economy hardest about a year-and-a-half after the recession elsewhere in the U.S. In some sense, the state never truly recovered from that recession. Oregon’s labor force participation dropped sharply and ended up lower than labor force participation in the U.S. as a whole.
The most recent information from the Bureau of Labor Statistics shows that labor force participation in Oregon is now 2 percentage points lower than the U.S. average. If the state’s rate was the same as the U.S. average, Oregon would have 61,500 more people in the labor force—that’s more than the entire population of the City of Springfield.
Oregon’s declining labor force is working its way into declining incomes.
The figure above shows personal income per person in Oregon compared with the U.S. as a whole. Manufacturing activity associated with World War II boosted Oregon incomes. Just after the war, the average Oregonian was 10 percent better off than the average American. Incomes stabilized in the 1960s and 1970s, when Oregon was only slightly better off than elsewhere in the U.S.
The 1980-81 recession hit Oregon incomes especially hard, while the tech boom of the 1990s helped turn back some of the losses of the 1980s.
Oregon incomes burst with the dot-com bubble, and never recovered. The most recent information from the Census Bureau shows that personal income in Oregon is now 10 percent lower than the U.S. average. That’s about $360 a month.
While it’s tough to tell from eyeballing the graphs, and without saying anything about causation, there is a clear relationship between labor force participation and personal income. Improvements in labor force participation are associated with improvements in personal income and vice-versa. In this column, we have remarked on the relationship between income inequality and employment in which states with weak employment growth saw the steepest increases in income inequality.
Something has happened to Oregon over the past decade to cause steep declines in incomes and willingness to work. Part of it is surely due to the state’s high personal income tax rate that diminishes incentives to work. Another part of it is likely due to the state’s challenging business climate that diminishes incentives to hire employees. And yet another part may be due to state and local governments’ fixation on catering to the “creative class” at the expense of bread-and-butter workers and the firms that hire them.
Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., a Portland-based consulting firm. He is an adjunct professor at Portland State University where he has taught classes in economics, finance, and state and local public finance. Any opinions are the author’s alone and do not reflect the opinions of any other person or organization.
Thursday, January 29, 2015
BY JACOB PALMER | OB DIGITAL NEWS EDITOR
As the costs of college mount, and as employer demand for software developers soars, coding schools and classes are popping up everywhere.
Monday, January 26, 2015
BY LINDA BAKER
The 2014 Bend Venture Conference set a record for the most cash, investments and prizes awarded at an angel conference in the Pacific Northwest. Investments in the six winning companies exceeded $1 million. The 11th annual conference was hosted by Economic Development of Central Oregon.
Monday, January 26, 2015
BY KIM MOORE
After more than a decade of wrangling, construction on a convention center hotel in Portland is slated to start this summer. But debate over project financing continues.
Wednesday, February 25, 2015
BY LINDA BAKER | OB EDITOR
The big news at Oregon Business is we’re getting a ping pong table. After reading the descriptions of the 2015 100 Best Companies to Work For in Oregon, a disproportionate number of which feature table tennis in the office, I decided it was time to bring our own workplace into the 21st century. It was a tough call, but it’s lonely at the top, and someone has to make the hard decisions.
Friday, February 27, 2015
PHOTOS BY JASON E. KAPLAN
Images from the 2015 celebration of Oregon's great workplaces.
Friday, March 20, 2015
BY OB STAFF
Join us to celebrate and network with Oregon’s best green workplaces!
Friday, February 20, 2015
BY AMY MILSHTEIN | OB CONTRIBUTOR
Multilevel marketing, health claims and zyto scanner biofeedback machines: How dōTERRA thrives in Oregon.
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Generations of students and graduates have been plagued by the question: What is my true calling in life? Four alumni from Corban University’s Hoff School of Business who graduated in different decades say the school helped them find the answer by giving them a practical, well-rounded education.
It’s happening whether anyone’s ready or not. Businesses here in Oregon and across the U.S. are already experiencing the effects of the largest generational shift in recent history, and these changing tides will impact every level of the workplace — from a company’s executive leadership to its cultural core.
Success stories spotlight meaningful career opportunities in Oregon's diverse and lucrative tourism industry.
Registration is now open for Portland Business Alliance’s Annual Meeting, one of the largest business gatherings in Portland each year.
The Commission helps to advance the professionalism, equality and efficiency of Oregon's judicial branch of government.
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