A Look at What’s Up with July 1, 2017June 5, 2017 Each quarter, the Oregon Employment Department (OED) publishes a report titled Oregonians @ Work. The report contains a table that details the number of jobs in Oregon by wage category for 13 broad private sectors as well as state and local government. Each year the OED produces this same table for each of Oregon’s 36 counties. These county level tables are not published on Qualityinfo.org, however they are available upon request and are useful in studying the county level economy.
On July 1, nonurban counties in Oregon will see the minimum wage increase to $10.00 an hour. Other parts of the state will see a larger increase. The minimum wage is set to increase by $0.50 in nonurban counties each July until 2022 when it hits $12.50. Urban counties will see a minimum hourly rate of $13.50 in 2022 and the Portland Metro area will reach $14.75. Then starting in 2023, the wage will be tied to the Consumer Price Index (CPI).
Data from the annual county level tables reveals that roughly 8.7 percent of jobs in Oregon paid below $10.00 an hour in the third quarter of 2016 and 38.0 percent of jobs paid below $15.00 an hour. In Eastern Oregon (Baker, Grant, Harney, Malheur, Morrow, Umatilla, Union, and Wallowa), 13.3 percent of jobs paid below $10.00 an hour and roughly half of all jobs paid below $15.00 an hour. Morrow County most resembled the state among the eight counties with 5.9 percent of jobs below $10.00 and 39.2 percent of jobs below $15.00. Malheur County was furthest from the state with 21.6 percent of jobs below $10.00 and 54.7 percent below $15.00.
For many people, it should come as no surprise that over 70.0 percent of jobs below $10.00 an hour in Eastern Oregon and 54.0 percent of those below $15.00 were in three broad sectors; retail trade, leisure and hospitality, and natural resources and mining. What may be surprising is that only two of the eight counties had a higher percentage than the state (8.1%), of jobs in natural resources and mining that paid below $10.00 an hour. In Harney County, 13.3 percent of jobs in natural resources and mining paid under $10.00 an hour and in Malheur County 48.9 percent of jobs in the sector paid under $10.00 an hour.
Malheur County’s high percentage is likely due to several factors. The nature of agricultural production in Malheur lends itself to short-term seasonal jobs with high turnover rates. These jobs often have low or no educational and skill requirements. Malheur’s close proximity to Boise, Idaho and the surrounding communities offers an expanded labor pool. Since Idaho’s minimum wage is $7.25 an hour and Malheur’s is currently $9.50, the competitive wage in Idaho should be driven up while remaining low in Malheur across all industries. In turn, the county’s natural resources and mining sector can compete for employees without paying a premium because the low wage is already a premium. Evidence for this can be seen in two other Eastern Oregon counties. Umatilla and Morrow have agricultural sectors comparable to Malheur’s in both employment and production. However, the bulk of jobs in the sector for these two counties (71.1% and 66.6%, respectively), pay from $10.00 to $14.99 an hour. Umatilla and Morrow are in close proximity to Washington State, which has a minimum wage of $11.00 an hour. So the opposite wage effect should occur. The competitive wage should be driven up in both counties, which appears to be the case.
Retail trade and leisure and hospitality jobs also often have low or no educational and skill requirements. Jobs in these two sectors are dependent on seasonal spending patterns that drive labor demand. Retail jobs tend to pay higher wages than leisure and hospitality jobs. This is likely due to increased availability of low and mid-level management jobs in retail trade that boost wages, and the expectation of tips in leisure and hospitality jobs that boost total expected compensation yet keep employer paid wages low. Roughly 70.0 percent of leisure and hospitality jobs are found in restaurants and other eating places. More than one-quarter (27.6%) of retail jobs in Eastern Oregon paid below $10.00 an hour and 70.0 percent paid below $15.00 in 3rd quarter 2016. This was higher than the state’s average of 17.4 and 62.1 percent, respectively. Almost half (47.2%) of leisure and hospitality jobs in Eastern Oregon paid below $10.00 an hour and 84.8 percent paid below $15.00. This was also higher than the state’s average of 27.7 and 71.3 percent, respectively.
With July 1st just around the corner, an estimated 13.3 percent of Eastern Oregon jobs are expected to see a pay increase. County-level wage tables allow for a look at where those increases should occur. They also allow for analysis of higher wages across other industries, but let’s save that for another article.