2002 Regional Economic Profile

Transcription

1 EMPLOYMENT DEPARTMENT Working In Oregon 2002 Regional Economic Profile PORTLAND Portland Metropolitan Area (Clackamas, Columbia, Multnomah, Washington, Yamhill)(Clark, WA)

2 The M ission of the OREGON EMPLOYMENT DEPARTMENT is to promote employment in Oregon by: Connecting employers to a diversified, multi-skilled workforce, Providing support during periods of unemployment and Promoting safe and quality child care. The Employment Department is an equal opportunity program. Auxiliary aids and services are available upon request to individuals with disabilities. Contact your nearest Employment Department office for assistance.

3 EMPLOYMENT DEPARTMENT Working In Oregon 2002 Regional Economic Profile Mail your order to: Employment Department Research & Analysis 875 Union St NE Salem, OR or Fax your order : (503) or your order : Curtis.M.Thrapp@state.or.us Order Form Qty. Region Counties 1 Clatsop and Columbia 2 Multnomah, Tillamook, Washington 3 Marion, Polk, Yamhill 4 Benton, Lincoln, Linn 5 Lane 6 Douglas 7 Coos, Curry 8 Jackson, Josephine 9 Gilliam, Hood River, Sherman, Wasco, Wheeler 10 Crook, Deschutes, Jefferson 11 Klamath, Lake 12 Morrow, Umatilla 13 Baker, Union, Wallowa 14 Grant, Harney, Malheur 15 Clackamas Portland Portland Metropolitan Area (Clackamas, Columbia, Multnomah, Washington, Yamhill) (Clark, WA) Oregon Statewide Please send the indicated number of copies of the 2002 Regional Economic Profile to: Name: Organization: Address: City/State/Zip: Day-time phone:

4 Employment Department David Scheele, Manager Cathie Moravec, Manager SW Jenkins Road Suite C 506 High Street Beaverton OR Oregon City OR Phone (503) Phone (503) TDD (503) TDD (503) Maureen Dooney, Manager dedrae Cottrell, Manager SE Stark Street 1433 SW 6th Street Gresham OR Portland OR Phone (503) Phone (503) TDD (503) TDD (503) Ben Langston, Manager Jerry Fugere, Manager 265 SE Oak Street Suite A 30 N Webster Street Suite E Hillsboro OR Portland OR Phone (503) Phone (503) TDD (503) TDD (503) Bill Seaton, Manager Joyce Aho, Manager 310 Kirby Street 500 N Hwy 30 Suite 320 McMinnville OR St Helens OR Phone (503) Phone (503) TDD (503) TDD (503) Written By 2251 E Hancock Suite 106 Newberg OR Phone (503) TDD (503) Amy Vander Vliet, Regional Economist Oregon Employment Department 1433 SW 6th Street Portland OR Phone (503) TDD (503) Amy.S.Vandervliet@state.or.us PRODUCTION TEAM Duane Ackerson Mark Miller Kathi Riddell Al Stoebig Brenda Turner Steve Williams Oregon Employment Department: REP: 12/01 i

5 TABLE OF CONTENTS Introduction... 1 Population... 5 Labor Force and Unemployment Industry Employment Occupational Employment Income and Wages Appendix Oregon Employment Department: REP: 12/01 iii

6 INTRODUCTION The Regional Economic Profile publications are prepared biennially by the Oregon Employment Department to provide an overview of economic and demographic trends in the state s various geographic regions. Information in this particular volume pertains to the Portland-Vancouver PMSA. Other volumes in this series are available for each of the state s 15 Workforce Investment Board regions as well as for the state as a whole. What is the Portland-Vancouver PMSA? PMSA stands for Primary Metropolitan Statistical Area, but what does this mean? As defined by the federal Office of Management and Budget, a Metropolitan Statistical Area (MSA) consists of one or more adjoining counties, at least one of which contains a city with a population of 50,000 or more. An adjacent county is considered part of an MSA if a substantial share of its population works in the county containing the central Regional Economic Profiles are produced for all 15 of Oregon s work force regions, for Oregon as a whole ( Statewide ), and for the Portland Metropolitan Area. You may obtain these publications by using the order form at the front of this publication or from the publications section of the Oregon Employment Department s Labor Market Information Web site at Readers with comments about this series of publications are invited to contact Mark Miller, Manager of the Workforce Analysis Section, at (503) or Mark.M.Miller@state.or.us. Questions or comments about a specific Profile should be directed to the regional economist listed on page i. city. MSAs in Oregon currently include Eugene-Springfield (Lane County), Salem (Marion and Polk counties), Medford-Ashland (Jackson County), and Corvallis (Benton County). The precise definition of a Primary Metropolitan Statistical Area is somewhat complex, but it is essentially just a very populous MSA. The Portland-Vancouver OR-WA PMSA consists of six counties: Clackamas, Columbia, Multnomah, Washington, Yamhill, and Clark County in Washington (Figure 1). PMSA composition is reevaluated every 10 years as commuting data becomes available from the decennial census. Because commuting patterns have changed as the region has grown, the component counties of the PMSA have Oregon Employment Department: REP: 12/01 1

7 changed as well. Prior to 1984, the PMSA consisted of four counties: Clackamas, Washington, Multnomah, and Clark. Then, based on data from the 1980 Census, Clark County was dropped from the PMSA (it was considered an MSA in its own right) and Yamhill County was added. The 1990 Census brought yet another change, as Columbia County was added and Clark County was folded back into the Portland PMSA, bringing the county total to six. Portland-Vancouver OR-WA PMSA Oregon Washington Colum bia Clark Multno m ah W ashington Clackam as Yamhil Despite the shifting geographic definition of the region, the historical economic data appearing in this publication have been adjusted wherever possible to reflect the current six-county PMSA configuration. Commuting Patterns Figure 1 The commuting patterns used to define the PMSA reveal part of the complex relationship that exists between the various counties in the Portland area (Table 1). Multnomah County draws the most commuters of any county in the metro region, due largely to the presence of the area s two largest cities, Portland and Gresham. Forty percent of the county s jobs are held by nonresidents. And Multnomah County residents are much less likely to travel outside the county for work than those living elsewhere in the PMSA. Washington and Clark counties exhibit similar commuting patterns. Both have sizable commuting populations, with about 35 to 40 percent of the working population traveling outside the county, primarily to Multnomah County. Washington County draws more workers in, however, as one-third of the county s jobs are held by nonresidents. By contrast, less than 15 percent of Clark County s jobs are held by nonresident commuters. 2 Oregon Employment Department: REP: 12/01

8 Table 1 Commuting Patterns for Counties within the Portland-Vancouver PMSA: 1990 Percent of Working Residents Who Work: In Same County Elsewhere in PMSA Outside PMSA Washington 60.7% 37.4% 1.9% Multnomah 80.9% 17.8% 1.4% Clackamas 47.4% 48.9% 3.7% Columbia 59.5% 28.6% 11.9% Yamhill 68.3% 23.9% 7.8% Clark 64.1% 32.4% 3.5% Percent of Workers Living: In Same County Elsewhere in PMSA Outside PMSA County: Washington 67.6% 30.0% 2.4% Multnomah 61.3% 36.2% 2.5% Clackamas 63.9% 32.2% 3.9% Columbia 73.5% 12.9% 13.6% Yamhill 82.5% 7.5% 10.0% Clark 85.6% 9.6% 4.8% Source: 1990 Census Clackamas County has the largest commuting population in the PMSA. Less than half of the county s working residents are actually employed within the county s borders. Most commute to Multnomah County and, to a lesser extent, Washington County. Yamhill and Columbia counties are also noteworthy in that both have a significant share of residents who travel outside the PMSA for work. Yamhill County is far enough south so that about four percent of its working residents commute to the Salem MSA. In Columbia County, workers crossing the Columbia River to work are not usually headed for Clark County; but, rather, to Cowlitz County. Keeping Informed This publication was written in the fall of 2001 and presents the latest statistics available on a variety of topics. Readers are reminded, however, that economic conditions are dynamic and that statistics are constantly changing. There are several options for keeping current on changing local economic conditions. Perhaps the best way is to subscribe to the Oregon Labor Trends and/or Oregon Employment Department: REP: 12/01 3

9 Portland Metro Labor Trends newsletters published monthly by the Oregon Employment Department. Another option for those seeking additional and updated information is the Oregon Employment Department s award-winning Labor Market Information Web site, 4 Oregon Employment Department: REP: 12/01

10 POPULATION The Portland metro area is Oregon s largest population center, home to about half of all Oregonians. At the time of the 2000 Census, the area s population totaled 1.9 million. Four of the state s six largest cities can be found within the PMSA. Eugene (2 nd ) and Salem (3 rd ) are the only non-portland metro area cities in the top six. Portland, with 529,100 residents in 2000, is the largest city, followed by Vancouver (Washington) with 143,600 residents. Close behind are Gresham (90,200) and rapidly growing Beaverton and Hillsboro in Washington County, with 76,100 and 70,200 residents, respectively (Table 2). Table 2 Oregon and Portland Metro Area Population Estimates: 1990 and 2000 April 1 April 1 Change Number Percent Oregon 2,842,321 3,421, , % Portland-Vancouver PMSA 1,515,452 1,918, , % Clackamas County: 278, ,391 59, % Lake Oswego* 30,576 35,278 4, % Oregon City 14,698 25,754 11, % Milwaukie 18,670 20,490 1, % Columbia County: 37,557 43,560 6, % St. Helens 7,535 10,019 2, % Scappoose 3,529 4,976 1, % Multnomah County: 583, ,486 76, % Portland* 438, ,121 90, % Gresham 68,249 90,205 21, % Washington County: 311, , , % Beaverton 53,307 76,129 22, % Hillsboro 37,598 70,186 32, % Tigard 29,435 41,223 11, % Yamhill County: 65,551 84,992 19, % McMinnville 17,894 26,499 8, % Newberg 13,086 18,064 4, % Clark County: 238, , , % Vancouver** 46, ,560 97, % Camas 6,798 12,534 5, % Battle Ground 3,758 9,296 5, % * City has population in more than one county **Annexations have added a large number of residents since Source: U.S. Census Bureau Oregon Employment Department: REP: 12/01 5

11 By County Multnomah County is the state s most populous county, yet it is smallest in land size. With 660,500 residents, it has a population density of 1,420 persons per square mile. This far exceeds the 36 persons per square mile average for all of Oregon. Washington County ranks second, both in population Source: 2000 Census Graph 1 Portland-Vancouver OR-WA PMSA Population by County: 2000 Yamhill 4.4% Washington 23.2% (445,300) and in population density (613 persons per square mile). Rural Yamhill (85,000) and Columbia (43,600) counties are the least populous in the metro area. In between falls rapidly growing Clark (345,200) and Clackamas (338,400) counties (Graph 1). Because Multnomah was already fairly highly developed, it has had the slowest rate of growth of any county in the PMSA over the past 10 years. Even so, the county has added 76,600 residents since The fastest growing areas of the Portland PMSA are outside the central city in the surrounding counties. Clark County experienced the most rapid population growth in the 1990s, adding 107,200 residents (45.0%). Washington County added more than 133,800 people (42.9%) about twice the number of people currently living in Hillsboro. Growth in these two counties is more than just a suburban phenomenon where residents work in Portland but live outside the central city. Population growth has also been driven by the counties own expanding industrial base, particularly in high tech. Growth in Clackamas County has also been robust over the past decade, although not as strong as in Washington and Clark counties. This is partly due to the fact that the county has a less developed industrial employment base. In addition, much of the county s eastern portion lies within the Mt. Hood National Forest. As indicated by census commuting data, Clackamas County residents are more likely to be employed in neighboring counties than in Clackamas County itself. Clark 18.0% Clackamas 17.6% 2000 Portland-Vancouver PMSA Population = 1,918,000 Columbia 2.3% Multnomah 34.4% 6 Oregon Employment Department: REP: 12/01

12 Yamhill County, with a total population less than the city of Gresham, contains only a small fraction of the total residents of the PMSA (4.4%). Its rate of population growth has been faster than for the overall metro area, a trend that is likely to continue as growth spills over from neighboring Washington County. Columbia County, the least populous county in the PMSA, is also one of the slowest growing. Population growth has been largely centered in the southeast corner of the county in cities within commuting distance of the Portland urban center. Characteristics of the Population Age The population of the Portland-Vancouver metro area is younger than that of the state as a whole (Graph 2). The region has a higher percentage of residents between the ages of 25 and 49, and a smaller percentage of residents over 50 years old. At the time of the 2000 Census, the median age in the metro counties ranged from a low of 33.0 in Washington County to 37.5 in Clackamas County. The median age for all Oregonians was 36.3, up from 34.5 in 1990 and 30.2 in In fact, every county in Oregon (with the exception of Morrow) has seen an increase in its population s median age since 1990 a reflection of the aging baby boom population. Race/Ethnicity Percent of Population 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Graph 2 Age Class Distribution Portland-Vancouver PMSA and Rest of State: 2000 Oregon Source: U.S. Census Bureau Portland-Vancouver PMSA Age Group Before discussing race and ethnicity, it is important to clarify a few points. First, the Census Bureau (the source of this data) changed their survey questions regarding race and ethnicity between the 1990 and 2000 Census. They added the option of specifying more than one racial category (White, Black, Asian, Native American, Pacific Islander, other). In other words, a respondent could classify himself or herself as belonging to two or more races. As a result, it s not Oregon Employment Department: REP: 12/01 7

13 possible to compare racial breakouts in 2000 with those in 1990 and earlier. 14% 12% Minorities as a Percentage of Population Portland-Vancouver PMSA, Oregon, and the U.S.: 2000 Oregon Portland-Vancouver PMSA United States 10% Second, the census breaks out the 8% population by ethnic 6% category (Hispanic, Non-Hispanic) in 4% addition to racial 2% category. That is, 0% within both ethnic categories there are Source: U.S. Census Bureau associated racial Graph 3 breakouts (e.g., Black/Hispanic, White/Non-Hispanic). Finally, all racial data from the census is self-reported. Black Native American Asian Hispanic (of any race) The Portland area is relatively diverse when compared with the state, but not when compared with the nation (Graph 3). The Oregon portion of the metropolitan area accounts for 46 percent of the state s total population, yet is Table 3 Population Estimates by Race and Ethnicity Portland-Vancouver PMSA and Oregon: 2000 Clackamas Columbia Multnomah Washington Yamhill Clark, WA Portland- Vancouver PMSA Oregon Total Population 338,391 43, , ,342 84, ,238 1,918,009 3,421,399 One Race: 330,061 42, , ,216 82, ,597 1,854,888 3,316,654 White 308,852 41, , ,007 75, ,648 1,621,090 2,961,623 Black 2, ,434 5, ,813 51,425 55,662 Native American 2, ,785 2,913 1,253 2,910 16,857 45,211 Asian 8, ,638 29, ,095 87, ,350 Pacific Islander ,320 1, ,274 5,635 7,976 Other 7, ,620 26,100 4,321 6,857 71, ,832 Multi-Racial: 8,330 1,103 26,864 14,126 2,057 10,641 63, ,745 Hispanic 16,744 1,093 49,607 49,735 9,017 16, , ,314 Non-Hispanic 321,647 42, , ,607 75, ,990 1,775,565 3,146,085 Percent of Population Portland- Clackamas Columbia Multnomah Washington Yamhill Clark, WA Vancouver PMSA Oregon One Race: 97.5% 97.5% 95.9% 96.8% 97.6% 96.9% 96.7% 96.9% White 91.3% 94.4% 79.2% 82.2% 89.0% 88.8% 84.5% 86.6% Black 0.7% 0.2% 5.7% 1.1% 0.8% 1.7% 2.7% 1.6% Native American 0.7% 1.3% 1.0% 0.7% 1.5% 0.8% 0.9% 1.3% Asian 2.5% 0.6% 5.7% 6.7% 1.1% 3.2% 4.6% 3.0% Pacific Islander 0.2% 0.1% 0.4% 0.3% 0.1% 0.4% 0.3% 0.2% Other 2.3% 0.8% 4.0% 5.9% 5.1% 2.0% 3.8% 4.2% Multi-Racial: 2.5% 2.5% 4.1% 3.2% 2.4% 3.1% 3.3% 3.1% Hispanic 4.9% 2.5% 7.5% 11.2% 10.6% 4.7% 7.4% 8.0% Non-Hispanic 95.1% 97.5% 92.5% 88.8% 89.4% 95.3% 92.6% 92.0% Source: U.S. Census Bureau, Census Oregon Employment Department: REP: 12/01

14 home to 82 percent of the state s Black residents and 76 percent of Oregon s Asian population. The two largest minority groups in the region are Hispanics and Asians, but these populations are not distributed evenly across the metro area (Table 3). Educational Attainment According to 1990 Census data, educational levels in the metro area were higher than those statewide. The tri-county area (Clackamas, Multnomah, and Washington counties) was especially highly educated, with roughly one-quarter of its residents (age 25 and over) completing four years of college or higher level of education, compared with just over one in five statewide. The 2000 Census educational data at the county level had not been released at the time of this publication, but figures were available at the state and national level. And, thanks to a separate but related census program, comparable data is available for Multnomah County for 2000 (Graph 4). New census data reveals that the residents of Oregon and Multnomah County became more educated over the course of the 1990s. In 1990, 23.7 percent of Multnomah County residents had earned a college degree or higher. In 2000, that percentage jumped to Conversely, in 1990, 17.2 percent of the county s residents had not completed high school, compared to 13.1 percent in Historical Trends College, 4 years or more Associate Degree High School Graduate 9-12 Grade; No Diploma Less than 9th Grade Educational Attainment, Persons 25 and Over Multnomah County, Oregon, and the U.S.: 2000 Some College 0% 5% 10% 15% 20% 25% 30% 35% Source: U.S. Census Bureau Graph 4 Population growth in the Portland metro area has gone through several distinct phases over the last few decades. During the late 1970s, a statewide boom in lumber and wood products and construction fueled strong population growth. The subsequent economic bust in the early 1980s caused growth to slow to a trickle. In 1983, the region s population actually declined. Effects of the Oregon Multnomah County U.S. Oregon Employment Department: REP: 12/01 9

15 recession lingered much longer in Oregon than in other parts of the country. Consequently, population growth remained stagnant through most of the 1980s. The population slump ended in 1988, when the area gained 30,000 residents more than double the increase in any of the prior seven years. Strong population growth continued through the 1990s. Since 1990, the region has grown by about 39,000 people annually. Although some of this gain was due to the number of births exceeding the number of deaths each year 35,000 30,000 25,000 20,000 15,000 10,000 5,000-10,000-15,000-20,000 Components of Population Change Portland-Vancouver PMSA*: , *Oregon portion only Source: U.S. Census Bureau Graph 5 Net Migration Natural Increase ( natural increase ), the dominant factor during this period was the large number of people moving into the region ( net migration ) (Graph 5). Interestingly, the region experienced its strongest population growth in 1991, a year in which the U.S. was mired in a recession. Several factors help explain this. First, the downturn in Oregon was relatively mild overall despite severe job losses in the lumber and wood products industry. The Portland metro area, less timber-dependent than most of the rest of the state, had an especially mild slowdown. Second, California and Washington were harder hit by the national recession. Thus, many of those who fell victim to double-digit unemployment rates in Oregon s neighbors to the north and south looked towards the Portland area as a more viable labor market. The disparity in economic performance between Oregon and California during the recession of the early 1990s was compounded by a disparity in real estate values. In 1992, for example, the median sales price of an existing home in Sacramento was $134,400 versus $97,700 in Portland. Consequently, many of those wishing to move from California to Oregon had ample financial means to do so. By 2000, however, Portland s median housing prices had risen to over $173,000; $30,000 more than the figure in Sacramento (Graph 6). Thanks largely to the rapid increase in Portland-area housing prices, the National Association of Realtors (NAR) Housing Opportunity Index has rated the region 10 Oregon Employment Department: REP: 12/01

16 among the least Median Sales Price of Existing Homes: affordable housing $240,000 markets in the nation in recent years. In the $210,000 Sacramento Portland Seattle first quarter of 2001, $180,000 Portland ranked 16 th $150,000 among 180 urban areas. However, this is an improvement from the first quarter of 1997, when the area reached number two in $120,000 $90,000 $60,000 $30,000 the NAR rankings. $0 Housing prices, Source: National Association of Realtors combined with a slowdown in the Graph 6 Portland area s job growth and improving California and Washington economies, slowed the pace of in-migration in the late 1990s. Planning for the Future While the influx of new residents to the Portland area has cooled, it is expected that population growth will remain strong in the long run. Metro, the regional government serving Clackamas, Multnomah, and Washington counties, is responsible for managing growth within these Oregon counties in a manner that both accommodates the needs of an expanding economy and preserves the quality of life that helps makes the region so attractive. One of the growth management tools at Metro s disposal is the Urban Growth Boundary (UGB). The UGB delineates the area in which urban development is permitted. Outside the boundary, open spaces and farmlands are preserved to prevent unchecked sprawl from destroying the surrounding countryside. Future growth can be accommodated by expanding the UGB, by increasing the density of development within the UGB, or by some combination of both. It is safe to assume that the debate surrounding the appropriate UGB for the metro area will continue well into the future. Oregon Employment Department: REP: 12/01 11

17 LABOR FORCE AND UNEMPLOYMENT Although labor force and unemployment statistics are among the most closely watched and widely reported figures, they are frequently misunderstood and misinterpreted. Before looking at the data, it is worth explaining some commonly used labor force terms and concepts. Labor Force The labor force consists of all residents, 16 years of age and older, who are either employed or unemployed and actively seeking employment. Each person is counted only once in labor force statistics even if he or she holds more than one job. Institutionalized individuals are excluded from official labor force statistics, as are active duty personnel of the Armed Forces (which is why you often see the phrase civilian labor force). Employed: A labor force participant is employed if he or she: worked at least one hour as a paid employee; or worked in his or her own business, profession, or farm; or worked at least 15 hours as an unpaid worker in an enterprise operated by a member of the family; or was temporarily absent from work because of vacation, illness, bad weather, childcare problems, parental leave, labor-management dispute, job training, or other family or personal reasons. Unemployed: A labor force participant is unemployed if he or she: had no job, and was available for work, and made specific efforts to find work, or was waiting to be recalled to a job following a layoff, regardless of whether or not he or she was looking for other jobs. The foregoing definition of unemployment excludes certain groups of people who are sometimes thought of as being unemployed or underemployed. Those who would like to work but have stopped looking ( discouraged workers ) are not counted because they are not actively seeking work. People who work part-time but would prefer full-time work are also not counted as unemployed because they are currently working, albeit fewer hours than they would like. While neither of these groups is included in unemployment figures, national data for each are gathered and published separately. There are five major categories of the unemployed: Oregon Employment Department: REP: 12/01 13

18 Job losers, who are on temporary or permanent layoff. Job leavers, who voluntarily terminate their employment and immediately begin to look for other employment. Those who complete temporary jobs and begin to look for new jobs. Reentrants, who previously worked, then left the labor force, and have begun a new job search. New entrants, who have never worked before. Unemployment Rate: The unemployment rate is simply the number of unemployed people expressed as a percentage of the labor force. To help distinguish the causes of rising or falling unemployment rates, economists often characterize unemployment as being of the following types: Seasonal unemployment, which results from normal, repetitive fluctuations in business activity that occur as the seasons change, for example, post-holiday layoffs in the retail trade sector. Cyclical unemployment, which results from a general downturn in business activity that is brought about by reduced demand for goods and services such as during a recession. Structural unemployment, which refers to a mismatch between industry needs and the skills of the local work force, typically caused by a change in the economic structure of an area or by technological change. Frictional unemployment, which occurs due to the inevitable delays between starting a job search and actually finding a suitable job. Reasons for Unemployment Job losers make up the largest share of the unemployed in Oregon, accounting for 49 percent of the total in 1998 (the most recent data available). About 62 percent of the job losers have lost their jobs permanently, while the rest are on a temporary layoff (Graph 7). The share of the unemployed who are job leavers typically varies with the health of the economy. During recessions, fewer people voluntarily leave their jobs since opportunities elsewhere are diminished. However, when the economy and labor demand are strong, more people are likely to quit their jobs, confident 14 Oregon Employment Department: REP: 12/01

19 that they will soon find something better. Reasons for Unemployment in Oregon: 1998 New entrants to the labor force have remained a relatively small and fairly constant fraction of the total unemployed (4% to 8%), primarily reflecting the size of the youth population. Unemployment among reentrants to the labor force, however, is larger and more variable, following a Graph 7 pattern similar to that of job leavers (i.e., the number of reentrants tends to fall when the economy is weak and rise when job growth is strong). Historical Unemployment Trends Reentrants 35% Job Leavers 12% New Entrants 4% Job Losers on Temporary Layoff 18% Permanent Job Losers 31% Total Job Losers = 49% of the unemployed The Portland area experienced two major Annual Average Unemployment Rates: periods of rising unemployment between 1980 and 14% 12% Each coincided Oregon 10% with a national recession (Graph 8). 8% U.S The first, in the early 6% 1980s, was by far the more severe. 4% Unemployment began to rise in 1980 as 2% Portland-Vancouver PMSA statewide activity in 0% both construction and lumber and wood products fell off. By Graph , the jobless rate hit the 10 percent mark. The unemployment situation did not improve significantly until 1984; and, even then, recovery was slow to bring relief. It wasn t until 1987 that unemployment finally fell below six percent, the lowest level since Oregon Employment Department: REP: 12/01 15

20 Rapid economic growth that began in the late 1980s finally absorbed most of the region s excess labor supply. In 1990, the jobless rate was only 4.2 percent, and concerns about labor shortages were beginning to surface. Before long, however, labor shortages ceased to be an issue as the country entered another recession and joblessness began to climb once again. The rise in unemployment was due not only to recession-induced layoffs and slower economic growth, but also to the influx of job seekers moving into the area from other states at a rate faster than the economy could create jobs. Even so, this period of unemployment was relatively mild and short-lived. Peak joblessness reached just 6.4 percent, significantly lower than at any time during the previous recession. Following the recession, unemployment rates began to fall. Joblessness reached historically low levels in 1994 and remained low through Contributing to the fall in unemployment was strong job growth and the tapering off of in-migration. As in , labor shortages once again became cause for concern, as many employers reported difficulty finding enough qualified workers. Recent Times Right before this publication went to press, Oregon was officially declared in a recession. October 2001 marked the eighth consecutive month of job losses (seasonally adjusted). After peaking in November 2000, employment levels dropped by 32,300 a decline of two percent spread across most major industries. The unemployment rate in 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% Graph 9 PMSA: 2001 PMSA: 2000 Monthly Unemployment Rates U.S., Oregon, and Portland-Vancouver PMSA: 2001 (not seasonally adjusted) Jan Feb Mar Apr May Jun Jul Aug Sep Oct October was 6.5 percent (preliminary), a level not seen since November of Portland s jobless rate steadily increased during 2001 as well (Graph 9). By September, it had exceeded the rate posted by the rest of the state for the first time since The current recession is shaping up a little differently than the last one. Instead of being somewhat insulated from the more severe effects of the national Oregon U.S. 16 Oregon Employment Department: REP: 12/01

21 recession, as was the case 10 years ago, Oregon is relatively vulnerable this time around. That s because the nature of the current national downturn is hurting industries that have a strong presence in Oregon, specifically, manufacturing. Oregon is more dependent on manufacturing than the nation as a whole, so the decline in U.S. manufacturing employment is hitting the state especially hard. Most components of manufacturing have shed jobs, some more than others. High tech, the engine of growth in Oregon during the 1990s, has been hit by plummeting demand and weak chip sales. Transportation equipment manufacturers are reeling from a sharp decline in truck orders. And the local energy crisis has taken its toll on metals manufacturers. The blows dealt to manufacturing over the past year are rippling through to other sectors. Construction lost 7,100 jobs between October 2000 and October 2001, trade shed 4,800, and transportation/public utilities was down by 1,500 jobs. The breadth of the current employment decline is wider and deeper than that of the early 1990s. The Geography of Unemployment Although, for most purposes, the Table 4 Portland-Vancouver PMSA is considered a single labor market, unemployment rates for areas within the region vary significantly (Table 4). At the high end, Columbia and Yamhill counties registered 5.1 and 4.5 percent, respectively. These were balanced out by relatively low rates near three percent in Clackamas and Washington counties. Generally, unemployment was lowest in the suburban areas, with rates somewhat higher in both the more urbanized and rural areas. There can be as much disparity in jobless rates between regions within the PMSA during a single point in time as there is for the PMSA as a whole over a long period of time that encompasses both recessions and recoveries. Portland PMSA Unemployment Rates By Geographic Area: 2000 Portland-Vancouver PMSA 3.9% Clackamas County 3.2% Lake Oswego 2.3% Clark County 4.2% Columbia County 5.1% Multnomah County 4.3% Portland 4.6% Gresham 3.2% Washington County 3.3% Beaverton 3.0% Hillsboro 3.3% Yamhill County 4.5% Source: Bureau of Labor Statistics Oregon Employment Department: REP: 12/01 17

22 Education and Unemployment The unemployment rate is closely watched as a measure of the economy s health as well as a barometer of the general ease with which people are able to find employment. In general, finding a job is easier if the unemployment rate is at five percent and falling, rather than 10 percent and rising. In addition to the overall nature of the economy, education can also affect the ease with which an individual can find a job. The unemployment rate varies dramatically when educational attainment is considered (Graph 10). In 2000, the overall U.S. unemployment rate for individuals ages 25 and older was three percent. For college graduates, however, the unemployment rate was less than two percent. Those holding advanced degrees saw even Unemployment Rate by Educational Attainment United States (age 25+): 2000 Doctorate Professional Degree Master's Degree Bachelor's Degree Associate Degree Some College High School Graduate High School Dropout Source: Bureau of Labor Statistics Graph 10 lower rates: 1.6 percent for master s degrees and under one percent for professional or doctoral degree holders. At the other end of the spectrum, those who had not completed high school faced tougher job prospects even when the economy was strong. The jobless rate for people who did not complete high school was 6.4 percent in 2000, more than double the overall rate. Although unemployment data by educational attainment are not available for the Portland area specifically, it is not unreasonable to expect that a pattern similar to the nation s can also be found in the local labor market. 0.9% 0.9% 1.6% 1.8% 2.3% Overall Unemployment Rate = 3.0% 2.9% 3.5% 6.4% 0% 1% 2% 3% 4% 5% 6% 7% 18 Oregon Employment Department: REP: 12/01

23 INDUSTRY EMPLOYMENT The 1990s were a decade of rapid economic growth in the Portland-Vancouver PMSA during which the area created over 239,000 new jobs. Although each year saw the creation of new jobs, the rate of growth varied dramatically from year to year (Graph 11). After slowing to a virtual halt during the recession of , employment 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 growth strengthened in Between 1994 and 1997, growth averaged 4.6 percent annually, peaking at 4.7 percent in 1995 and This brisk growth was bound to slow at some point, and so it did in 1998 (+1.8%) and 1999 (+1.3%). Several major events contributed to the slowdown, first and foremost being the Asian financial crisis. Troubled markets overseas led to a sharp decline in demand for Oregon products, especially high tech. Exports plummeted and local employers cut production and, consequently, employment. Conditions were exacerbated by a glut in the domestic semiconductor industry, where bloated inventories and declining domestic demand for computer chips led to additional production and staffing cuts. Finally, the area suffered from a labor shortage across a variety of industries and occupations. The lack of qualified workers to fill vacant positions also put the brakes on employment growth. In mid-1999, the region began recovering from the Asian crisis and the semiconductor industry once again spoke of expansion. By 2000, annual employment growth registered 2.1 percent as the economy created 19,500 jobs. An Analysis of Employment Growth in the 1990s 0 Graph 11 Annual Nonfarm Employment Growth Portland-Vancouver PMSA: Between 1990 and 2000, employment in the Portland metropolitan area grew by 33.0 percent. Nationally, employment grew by 20.1 percent. Was the region s stronger growth due to the its industry mix? That is, did Portland have a Oregon Employment Department: REP: 12/01 19

24 relatively larger proportion of typically fast-growing industries? Or did the area s industries grow at a faster pace locally than their national counterparts? Perhaps a combination? A shift-share analysis tackles these questions and suggests that the overwhelming reason behind Portland s more rapid growth was that its industries outperformed their national counterparts. Table 5 goes into more details. The first four columns in the top part of the table present Portland s industry employment for 1990 and 2000 and the corresponding growth between the two years. The fifth column ( Standardized Growth-Percent ) is the rate at which these industries grew nationally and thus answers the question of whether growth in an industry locally was faster, slower, or equal to the national growth rates. For example, services grew faster locally (51.3%) than it did nationally (44.6%) between 1990 and Table 5 Shift-Share Analysis of Employment Growth Portland-Vancouver PMSA: Employment Actual Growth Standardized Growth Industry Percent Net Percent Net Manufacturing 124, , % 23, % -4,200 Services 183, , % 94, % 81,900 Retail Trade 129, , % 41, % 23,300 Wholesale Trade 55,700 67, % 11, % 7,900 Construction/Mining 36,800 54, % 17, % 8,800 Trans. & Public Utilities 43,200 56, % 13, % 9,100 Finance, Insur, & R.E. 52,400 64, % 12, % 7,100 Government 99, , % 25, % 12,400 Total 725, , % 239, % 146,300 Shift-Share Components of Employment Growth National Growth Industry Mix Regional Shift Industry Percent Net Percent Net Percent Net Manufacturing 20.1% 24, % -29, % 27,400 Services 20.1% 36, % 44, % 12,400 Retail Trade 20.1% 26, % -2, % 17,700 Wholesale Trade 20.1% 11, % -3, % 3,900 Construction 20.1% 7, % 1, % 9,000 Trans. & Public Utilities 20.1% 8, % % 3,900 Finance, Insur, & R.E. 20.1% 10, % -3, % 5,400 Government 20.1% 20, % -7, % 13,300 Total 20.1% 145, % % 93,000 Actual Growth = National Growth + Industry Mix + Regional Shift 239,300 = 145, , Oregon Employment Department: REP: 12/01

25 Finally, the last column ( Standardized Growth-Net ) applies the national growth rate to the region s employment levels and calculates how many jobs would have been created had the region s industries grown at the national rates. For example, services would have grown by 81,900 jobs had it mirrored national trends. Basically, what the top half of Table 5 shows is that every major industry in the Portland metro area grew at a faster rate than its national counterpart. The bottom half of the table breaks out the components of growth: national growth effects, industry mix effects, and regional effects. The National Growth- Net column is straightforward. It calculates the growth in the Portland PMSA that can be attributed to overall national trends and conditions. If each industry in the region had grown at the overall national rate (20.1%), then total employment would obviously have grown by 20.1 percent (145,891 jobs). The Industry Mix column answers the question Did the region s growth outperform the nation s because its employment was more concentrated in relatively fast-growing industries? If the region s employment by broad industry had grown at the national rate for the same industry, overall growth for the region would have been 146,300 jobs (20.2%). On the other hand, if each of the region s broad industries had grown by 20.1 percent (the overall national growth rate), job growth would have been 145,891. The positive difference between these two figures (488; 0.1%) suggests that the region s industry mix was slightly more concentrated in relatively fast-growing industries (e.g., services). Finally, the Regional Shift columns compute the proportion of the region s job growth that resulted from its industries growing faster than their national counterparts. It s simply the difference between Portland s actual growth and its standardized (or nationalized ) growth. For example, services grew by 51.3 percent between 1990 and 2000, adding 94,300 jobs. Had this sector grown at the national rate of 44.6 percent, it would have gained 81,900 jobs. So an additional 12,400 jobs (6.8%) were created because the services sector grew faster locally than it did nationally. Overall, nearly one-third (38.9%) of the metro area s employment growth in the 1990s was due to the fact that its industries outperformed their national counterparts. Had industries in the region grown at the same rate as they did nationally, employment would have grown by 146,300 jobs well short of its actual increase of 239,300. Some of the metro area s key growth industries in the 1990s were construction, services, manufacturing, and trade (Graph 12). At first glance, growth in manufacturing seems unremarkable when compared with growth in the region s other industries. But, when one realizes that manufacturing declined by over three percent nationally, the Portland area s growth of 19 percent looks a little more impressive. Services and trade (wholesale and retail), which together Oregon Employment Department: REP: 12/01 21

26 account for over half the region s employment, also saw substantial growth in the 1990s. Industry Composition 60% 50% 40% 30% 20% Employment Growth Rate by Major Industry Portland-Vancouver PMSA vs. U.S.: 1990 to 2000 U.S.- All Industries United States Portland-Vancouver PMSA Broken out by broad industry, the services industry accounted for the largest percentage of jobs in the metro area, employing 278,000 in 2000 (Graph 13). The two largest components of the services category were health services and business services, which includes the rapidly expanding help supply services and data processing services sectors. The trade industry, which includes wholesale and retail trade, was the second largest source of jobs. This sector employed over one-quarter of a million people in 2000, 10% 0% -10% Graph 12 Graph 13 Manufacturing Construction & Mining 5.7% Trans. & Public Utilities 5.8% accounting for one in four jobs (24.7%). Retail trade employed 170,400, nearly 72 percent of the region s trade-related employment. The region s manufacturing sector provided 147,200 jobs, one-third of which employment was in high tech. Other major employers included metals and transportation equipment manufacturing. Services Rounding out the broad industries, 125,500 jobs (13.0%) were in the government sector, almost half of which were education-related. Finance, insurance, and Retail Trade Whole. Trade Construction Trans.& Pub. Util. Finance, Insur, & R.E. Employment by Major Industry, Portland-Vancouver PMSA: 2000 Manufacturing 15.3% Trade 24.7% Government 13.0% Government Services 28.8% Fin., Ins., Real Est. 6.7% 22 Oregon Employment Department: REP: 12/01

27 real estate employed 64,900 (6.7%), followed by transportation and public utilities (56,200; 5.8%) and construction (53,600; 5.7%). Compared with the State The Portland area s industry structure differs in several ways from the rest of the state (Graph 14). The most notable difference is the proportion of jobs in the government and services sectors. About one in eight jobs in the region are in government, compared with one in five for the rest of the state. This can be explained, in part, by the large concentration of state government in Salem, home of the capital. The Salem metropolitan area contains 36 percent of Oregon s state government employment, yet only eight percent of Oregon s total employment. Another explanation for the area s lower share of government employment involves economies of scale. The region s share of employment is smaller than that for the rest of the state because more populous areas can take advantage of economies of scale that smaller, more rural counties cannot. Manufacturing Percentage of Employment by Industry Portland PMSA (OR portion) and Rest-of-Oregon: 2000 Finance, Insur., & R.E. Trans. & Public Utilities Construction & Mining Graph 14 Government Services Trade Manufacturing Agriculture Portland PMSA (Oregon portion) Rest-of-Oregon 0% 5% 10% 15% 20% 25% 30% While national manufacturing employment declined over the course of the 1990s, the metro area saw substantial growth. Between 1990 and 2000, the area created 23,200 jobs, an increase of 18.7 percent. During the same time period, national manufacturing employment declined by 3.2 percent. High tech has been one of the region s primary drivers of manufacturing job growth (Graph 15). This sector, which employed 30,100 in 1990, grew by nearly 59 percent between 1990 and 2000 (+17,600). With the exception of a four percent decline in 1999 (fallout from the Asian crisis), high-tech manufacturing grew by between 2.5 and 12.2 percent annually in the 1990s. Oregon Employment Department: REP: 12/01 23

28 Although they do not account for as many jobs as high-tech manufacturing, both fabricated metals and transportation equipment also experienced considerable growth in the 1990s, adding 2,500 jobs each. However, not all manufacturing sectors fared so well. Those industries associated with natural resources notably food products, lumber, and paper products experienced job losses between 1990 and Manufacturing job growth slowed in the late 1990s. In 1998, jobs were added at a rate of 1.3 percent, compared to annual rates of 3.5 to 5.6 percent in 1994 through In 1999, the sector actually lost jobs (-3,100; -2.1%) for the first time since But not all components of manufacturing experienced job losses; a notable exception was Annual Job Growth Rate: % 6% 4% 2% Manufacturing Employment Growth Portland-Vancouver PMSA: Food Products Other Mfg. High Tech Mfg.* 0% Metals* -2% Lumber Note: Bubble size reflects 1990 industry employment and Paper Products* -4% -10,000-5, ,000 10,000 15,000 20,000 25,000 Job Growth: *High tech mfg. Includes sic 357, 36, 38. Metals includes sic 33,34. Lumber and Paper Products includes sic 24 and 26. Graph 15 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Graph 16 Transport. Equipment Electronic Equipment and Transportation Equipment Manufacturing Employment Portland-Vancouver PMSA: 1990-October 2001 Electronic Equipment Transportation Equipment Oct-01 transportation equipment manufacturing. With strong domestic and international demand for trucks, Portland companies such as Freightliner and Gunderson announced aggressive hiring plans for 1998 and into Employment growth in these companies helped to offset losses in other industries, such as high tech, incurred by the Asian crisis (Graph 16). 24 Oregon Employment Department: REP: 12/01

29 But transportation equipment manufacturing is a highly cyclical industry, and 2000 brought hard times to the sector. Businesses were hit by rising interest rates, higher insurance costs, rising fuel costs, and a glut of used trucks flooding the market. Demand declined steeply and layoffs ensued. As of the fall of 2001, transportation equipment manufacturing employment had fallen to levels not seen since Metals manufacturers also experienced rough times in 2000 and into 2001, as the energy crisis caused many smelters in the Northwest to come to a virtual standstill. Reynolds Metals (Alcoa) in Troutdale shut down in September of 2000, laying off over 500 employees. Vanalco, an aluminum smelter in Vancouver (Clark County), shut down in 2000, putting 600 people out of work. As of October of 2001, manufacturing employment in the Portland metro area was almost 10,300 jobs (-7.3%) below post-asian peak levels set in July Components suffering the largest losses include metals, transportation equipment, and machinery. High-tech Manufacturing High-tech manufacturing consists of computer and office machinery, electronic equipment, and instruments and related products. This component of manufacturing was largely responsible for the local economy s robust growth in the mid-1990s, and then subsequent slowing in 1998 and Washington County accounted for over half of the state s 2000 employment in hightech manufacturing. Multnomah County 10.0% With the addition of Clackamas County Multnomah and 5.8% Clackamas, this tricounty area employed almost three out of every four high-tech workers in the state Rest-of-State 28.4% (Graph 17). In addition to the jobs in the Oregon portion of the metro area, Clark Graph 17 County also has a large high-tech sector, with employment levels over 8,000. High-Tech Manufacturing Employment Portland Metro Area (Oregon Portion) and Rest-of- State: Statewide Employment = 54,581 Washington County 55.9% Oregon Employment Department: REP: 12/01 25