Is There a Jobs Exodus in Oregon?

The State Employment Economist announced Monday that Oregon’s unemployment rate for June held steady at 12.2%. That still remains the second highest in the nation and nearly one-third higher than the nation as a whole.

At first blush the news seemed encouraging — that the employment picture was stabilizing — but when you look behind the numbers, Oregon’s employment crises continues unabated.

The unemployment numbers reflect the total number of people having filed for unemployment compensation. In Oregon today that number is 241,156 and that is compared to 113,722 a year ago — more than double the number. But the unemployment numbers can be deceptive since they simply reflect the number of persons receiving benefits and not the total number unemployed.

The unemployment benefits numbers can be effected by those dropping off because they have run out of the number of weeks for which benefits are available and by those dropping off because they have become discouraged and left the state — a view that the State Employment Economist appears to espouse although he cites no data to support such a conclusion.

The real health of Oregon’s job market is more correctly described by the number of people working rather than the total number of people receiving unemployment benefits. And when we look at those numbers the picture is one of significant continuing decline in not only the total number but in the critical categories of well paying jobs. The total number of people working in Oregon in June of this year was 1,643,000; down 7,200 jobs from May of this year. So even though the numbers of those receiving unemployment compensation remained relatively constant, the actual number of jobs declined at about the same rate as the previous 11 months.

As of June of 2008, there were 1,741,000 people employed in Oregon. This month’s report represents a decline of approximately 98,000 jobs or 5.6% of the workforce from the 2008 numbers. But of significant interest, the number of people employed in June of 2008 — at a time of relatively low unemployment for Oregon (5.9%) — was 7,000 people less than the previous June, 2007. Even in what appeared to be good times based on unemployment numbers, private sector employment was declining.

The 98,000 jobs lost year over year is also deceptive because while private sector employment has been steadily declining, government employment has been increasing. If you exclude the growth in government employment, the total number of jobs lost in the private sector exceeds 104,000. And the job losses are disproportionately borne by the high paying sectors of manufacturing, construction and transportation. Even the seasonal lift in these job sectors were less than in previous years with the exception of the construction industry which may be benefiting from increased government spending on highways and other capital projects — spending that is thus diverted from private sector investment which generally creates sustainable jobs rather than temporary. And even at that, the construction numbers are down over 15,000 jobs from the previous year — nearly 15%.

And then, right in the middle of this continued worsening of the jobs market, Gov. Kulongoski and the Democrat legislature raised taxes on Oregon’s businesses and further depleted the available investment capital for resurrecting Oregon’s economy. But if the preservation and growth of government is the primary goal, then what else would you expect.

While the State Employment Economist cites no data for his conclusion that the work force is leaving Oregon, I fear he is correct. The jobs are simply following the businesses that have left and those that are about to leave.