The Real State of Employment in Oregon

A recent article in The Oregonian reported that Portland (apparently for The Oregonian that is all there is in the state) was reaching “full employment” and that economic growth will now slow down.  Well The Oregonian did not so much “report” as they just copied information from a press release by the Oregon Department of Employment – no independent investigation, no context, no verification of facts, and no juxtaposition against other known data.

This continues to be a bad habit of The Oregonian with regard to anything involving Democrat administrations and is reminiscent of its handling of the sex scandal involving former Gov. Neil Goldschmidt’s three year serial rape of a minor child.  The Oregonian and Willamette Week were simultaneously given identical information about Mr. Goldschmidt’s actions.  Willamette Week began an investigation while The Oregonian, for all intents and purposes, “spiked” the story.  Questioning by Willamette Week triggered Mr. Goldschmidt’s resignation as Chairman of the Board of Higher Education.  Mr. Goldschmidt issued a press release indicating that he was resigning for health reasons and The Oregonian printed it nearly verbatim in the early morning addition.  When Willamette Week broke the story of Mr. Goldschmidt’s rape, The Oregonian quickly pulled its original version (based on Mr. Goldschmidt’s press release) and was forced to publish its own hurried story about the allegations of serial child rape.

Obviously, there is no comparison between incomplete economic data and the story of a prominent Oregon Democrat raping a child for nearly three years.  But it is the “acceptance” of anything Democrat without the independent verification and questioning that remains the same.

Had The Oregonian done even a superficial investigation into this latest economic press release by the administration of Gov. Kate Brown (D) it would have raised serious questions as to the real state of Oregon employment and growth opportunity.  Yes, Oregon’s unemployment rate has dropped to an impressive 3.7% – its all there in black and white and verified by the United State Bureau of Labor Statistics.  However, the unemployment rate has, at best, only a tangential relationship to real unemployment.  The unemployment rate is a measure of the number of people receiving a welfare benefit in the form of “unemployment insurance payment.”  It does not include those whose eligibility has expired, those who have given up looking or those who have been forced to accept part time employment.  It provides no information as to how many people forced out of one job had to accept employment in a lower paying job and it treats “employment” as a monolithic element without regard to skill, wages or opportunity – in other words employment as an entry level fast food worker is counted the same as employment as highly skilled welder, electrician or nurse.

Had anyone, including The Oregonian, looked behind the numbers at other data, a significantly different picture would have been presented.  There are two better indicators of Oregon’s employment picture.  The first is the Labor Force Employment Rate which is a measure of the percentage of the total civilian labor force (those working and those receiving unemployment benefits) divided by the total civilian non-institutionalized population (excluding military personnel and homemakers)over sixteen years of age. In November of 2007, prior to the commencement of the Bush/Obama recession, Oregon’s Labor Force Employment Rate was 62.2 percent.  As of January of 2017, the rate was 59.5%.  This means there is a smaller percentage of the Oregon population working today than there was prior to the recession.  In fact, that rate has only improved by 0.4% since the commencement of President Barack Obama’s first term in office.

How do you reconcile the dramatic drop in unemployment rate with the reduction in the percentage of the population finding employment in Oregon?  You don’t!  As I noted before the unemployment rate is a measure of welfare payments while the labor force employment rate is a measure of actual employment health.  The fact of the matter is that Oregon is nowhere near “full employment” and continues to lag significantly behind the pre-recession employment rate.  If Oregon’s economy falters it is NOT because of full employment; rather it is because of other factors including the business climate and the threat of additional taxes that are more likely to be a drag on economic growth.

The second measure is the mix of jobs as reported by Oregon’s Department of Employment and again verified by the Bureau of Labor Statistics.  Oregon’s total population grew from approximately 3.722M at the end of 2007 to approximately 4.029M at the end of 2016 – an increase of 307,000 or approximately 8.25 percent.  At the end of the third quarter of 2007 immediately before the Bush/Obama recession, the total Private Sector employment in Oregon was 1,489,822 while at the end of the fourth quarter of 2016 the number was 1,571,714 – a growth of 89,892 or a growth of 5.5 percent and materially behind the population growth rate of 8.25 percent.  In contrast state and local government employment during the same period increased from 215,972 to 266,953 – a growth of 50,981 or 23.6 percent.

In the private sector the Construction, Natural Resources and Mining, Manufacturing, Trade and Transportation, and Professional Services sectors are generally regarded as the employment with the best wages.  During the same period as above Construction fell from 108,582 to 91,993 (a loss of 16,589 or a loss of 15.3 percent), Natural Resources & Mining fell from 63,096 to 46,743 (a loss of 16,353 or a lost of 25.9 percent), Manufacturing fell from 206,288 to 187,139 (a loss of 19,149 or a lost of 9.3 percent), Trade and Transportation rose slightly from 339,251 to 347,474 (a gain of 8,223 or 2.4 percent) and Professional Services rose from 200,386 to 239,927 (a gain of 39,541 or 19.7 percent).

On the flip side Healthcare and Social Services, and Leisure and Hospitality are generally considered among the lowest wages – often times minimum wage.  Healthcare and Social Services grew from 181,074 to 234,548 (a gain of 53,474 or 29.5 percent) and Leisure and Hospitality grew from 179,504 to 197,469 (a gain of 17,965 or 10.0 percent).

These figures paint a stark portrait of a dramatic shift in Oregon’s employment.  The rate of increase in private sector jobs does not come even close to the rate of growth of the general population, while the rate of increase in government jobs is nearly triple the rate of growth of the general population.  In the private sector those sectors representing good paying jobs continue to decline while low and minimum wage jobs increase.

In liberal Oregon, a state run by liberals/progressives for over three decades, the rich are getting richer and the poor and middleclass are getting poorer.
Good jobs are declining and a smaller percentage of the population is working.  If this represents “full employment” in Oregon, I would hate to see what the next recession will bring.