OLMIS

by Barbara E Peniston
Published Oct-27-2011

The National Picture Background Recession and Recovery: Job Loss and Growth in Oregon Portraits of the Recession: Oregon Versus the Nation

How did job losses during and job growth following the 2008 recession compare to that of the 2001 recession in Oregon? Were the trends of industries paying higher, middle, and lower wages different? How did Oregon's experience of the last decade's economic cycles compare with the national experience?

In February of this year, the National Employment Law Project (NELP) released a report, A Year of Unbalanced Growth: Industries, Wages, and the First 12 Months of Job Growth After the Great Recession, describing the results of analyses that strove to answer the questions above, for the nation as a whole. Two key findings of the NELP report are the following:

1. There is a significant imbalance between where private-sector job losses and subsequent job growth occurred in the 2008 recession. Higher-wage industries constituted about 40 percent of job losses, but only 14 percent of recent job growth. Lower-wage industries comprised 23 percent of job losses and nearly 50 percent of all recent job growth.
   
   
2. The recovery following the 2001 recession looked much better than the current period of recovery. After a year of job growth, nearly half of the private-sector jobs lost in the 2001 recession had been recovered; after a comparable period of time, only 14 percent of the jobs lost in 2008 and 2009 had been recovered. The recovery from the 2001 recession also saw significantly more growth in higher-wage industries.

This Oregon study drew inspiration from A Year of Unbalanced Growth. The types of analyses used and methods of presenting results closely parallel those followed by NELP. One small difference was in the choice of time periods for pulling data for the comparative analysis. NELP used data from the low points in national employment and a point 12 months into the recoveries (February 2010 and January 2011, for the 2008 recession). Because Oregon's recent economic recovery lagged a bit behind the nation's, the Oregon study evaluates the state's recovery five quarters after its recessionary low point. However, to make direct comparisons between the Oregon and national recoveries (based on the results of the NELP analysis), wage data from four quarters following Oregon's recessionary low points was also analyzed.

The results presented in this report are based entirely on the analysis of private-sector Oregon Unemployment Insurance (UI) wage records. In contrast, the NELP study drew on two sources of private-sector U.S. Bureau of Labor Statistics (BLS) data: Current Employment Statistics survey data for seasonally adjusted monthly payroll employment, and Occupational Employment Statistics survey data for occupational wage and employment data by North American Industry Classification System industry. Due to job churn captured in quarterly UI wage records, the counts of jobs and recessionary trends presented here differ from more commonly evaluated employment series like CES. For more information on these data sources and this study, reference the full report on the Wages and Income page at www.QualityInfo.org.

The 2008 recession in Oregon, from the peak number of jobs in the first quarter of 2007 to the low in the third quarter of 2009, brought a seasonally adjusted loss of more than 220,000 private-sector jobs (Graph 1). Between the third quarter of 2009 and the fourth quarter of 2010, the private sector experienced a net gain of about 33,000 jobs. The fourth quarter 2010 total private-sector job count in Oregon was 1.46 million, 11.4 percent lower than the first quarter 2007 peak of 1.65 million jobs. In contrast, total job losses during the 2001 recession (measured between the first quarter of 2001 and the second quarter of 2003) numbered only about 62,000; nearly 37,000 jobs were gained during the first five quarters of subsequent expansion.

Which industries have been recovering after the 2008 recession and what are the wages they pay? How do the job loss and growth patterns of the recession earlier this decade compare to the 2008 recession? To answer these questions, the first quarter 2007 median hourly wage (inflation adjusted to 2010, using the Consumer Price Index) and seasonally adjusted number of jobs by quarter (first quarter 2001 - fourth quarter 2010) were determined for each of 84 detailed industries. The industries were sorted by median wage and divided into three groups (lower-wage, mid-wage, and higher-wage) so that each group had roughly the same total number of jobs. The job losses and job growth for each of these groups were then calculated and tracked over time.

Graph 2 reveals that higher- and mid-wage industries accounted for nearly 60 percent of total job losses in the 2008 recession, but little more than 31 percent of job growth in the first five quarters of the recovery. Lower-wage industries constituted 41 percent of the job losses and 69 percent of the growth in jobs. From another perspective, job gains represented 25 percent, 9 percent, and 7 percent, respectively, of the recessionary job losses in lower-, mid-, and higher-wage industries.

The ratios of job losses to subsequent job growth are striking. Among higher-wage industries, 14 jobs were lost to the recession for every one gained back in the subsequent five quarters of recovery. The mid-wage industry ratio was 12 to one. At the lower-wage end of the spectrum, the ratio was four to one.

In comparison, job growth following the 2001 recession (Graph 3) was more in balance with job losses. Roughly half the number of jobs lost in higher- and lower-wage industries were gained in the first five quarters after the low point of the recession. Fully three-quarters of mid-wage jobs lost were recovered. Sixty-eight percent of all job losses and 73 percent of all job gains were in mid- and higher-wage industries.

As the nation experienced, there is a significant imbalance between where the job losses of Oregon's 2008 recession and subsequent recovery occurred. Nationally, higher-wage industries accounted for 40 percent of job losses during the recession and 14 percent of job gains in the first year of job growth. In Oregon, higher-wage industries, which constituted about 30 percent of total job losses, were even slower to add jobs. They accounted for only 1 percent of job gains in the first year and 14 percent after five quarters. Lower-wage jobs comprised 23 percent of all job losses and nearly half of all job gains in the nation. In Oregon, larger percentages of both job losses (41%) and subsequent job gains (65%) in the first year were in lower-wage industries. After five quarters of growth, nearly 70 percent of all job gains in Oregon were in lower-wage industries.

Compared with the 2001 recession, recovery from the 2008 recession was much more tepid in both Oregon and the nation as a whole. During the first year after the end of the 2001 recession, about half the jobs lost nationwide were recovered; the same was true for Oregon. After one year of growth following the 2008 recession, the nation recovered only about 14 percent of the jobs that had been lost. Oregon recovered an even smaller percentage of the jobs it lost: 10 percent in the first year. After five quarters, 14 percent of the state's job losses had been recovered.