Demographic Challenges for Oregon’s Rural Workforce

by Gail Krumenauer

June 7, 2017

Employment Landscape of Rural Oregon 

The Oregon Employment Department recently released a special report entitled The Employment Landscape of Rural Oregon. Our economists have been providing data and analysis of the state’s 23 rural or “nonmetropolitan” counties for decades. This report marks the first time in many years we’ve both updated and compiled the many workforce-related topics specific to rural Oregon together into one publication.

Our examination of rural Oregon’s employment landscape shows a variety of factors have led to a slower recovery outside metropolitan areas. Demographic trends are among the most striking. Natural population growth is low, in-migration is slow, and young people often leave rural communities to seek educational or employment opportunities in urban centers. Older in-migrants choosing rural locales for retirement bring dollars into their new home communities and increase local demand for goods and services. Meeting the needs of aging populations and businesses’ need to replace many workers reaching retirement are major challenges for some areas.

Population Dynamics

Oregon’s rural communities are growing, just at a much slower pace than in urban centers. According to Portland State University, rural counties added 19,900 new residents between 2010 and 2016, a growth rate of 2.7 percent. Urban counties expanded by 7.1 percent over the same period.
Below the surface, trends in population growth are even more striking. Net population change results from the combination of two factors: natural increase or decrease in a population (births minus deaths); and net migration (in-migrants minus out-migrants). In-migration – new residents moving in – accounts for all of the population growth in rural Oregon between 2010 and 2016. In total from 2010 to 2016, Oregon’s 23 rural counties combined actually had a natural decrease, with 400 more deaths than births among residents. In metro counties, natural increase accounted for 33 percent of population gains between 2010 and 2016.

A lack of natural increase alone wouldn’t be troubling for the workforce pipeline in rural areas, so long as in-migration included working adults and children. Between 1995 and 2015, that does not appear to be the trend though. Twenty years ago only 13 percent of the workforce in rural Oregon was 55 or older. That share has roughly doubled to 27 percent of the workforce. There are more than 35,000 additional workers ages 55 and older in rural Oregon today, an increase of 135 percent. Meanwhile, the rural prime working age and youth workforces are both smaller today than back in 1995.

Aging Workforce

These population dynamics contribute to the tendency for many rural Oregon counties to be older than the population of metro areas. The statewide median age is 39 (one-half of all Oregonians are 39 years or older) while the median age is over 50 in five rural counties  – Curry, Grant, Lincoln, Wallowa, and Wheeler.
The older population of rural counties means their workforces are also older, and presumably heading towards retirement. Statewide, 23 percent of workers in Oregon are 55 years old or older. All rural counties have higher shares of workers ages 55 and older. Wheeler County serves as the most extreme case, where nearly two out of every five workers (37%) are at least 55 years old. More than 30 percent of workers also clock in at 55 years or older in Wallowa, Lake, Gilliam, Grant, and Lincoln counties.

Replacing Retiring Workers

Statewide, 63 percent of total projected job openings between 2014 and 2024 are expected due to the need to replace workers, and the other 37 percent are due to growth from new and expanding businesses. In several rural regions, replacements outweigh growth openings by a three to one margin. While rural economies in some areas of the state aren’t expected to grow quickly, there are opportunities, mostly due to an aging workforce and impending retirements, for new workers to replace those who are leaving.
Growth doesn’t have to be the goal: a desire to thrive with the current level of population and business activity is understandable. A rural eastern Oregon resident summed it up well when she said, “I don’t want my community to become like the big city, but I want there to be enough opportunity for my children to live and work here if they so choose.” So, how do counties with an aging workforce and shrinking youth and working age populations overcome a declining labor force?

Of course there is no one single solution to fit the many, varying needs of each rural Oregon community. Local economies are often influenced by variables that are outside the control of many within the community. Sometimes, luck plays a role; combined with the hard work of many, local communities can strategically move toward an exciting future. Rural Oregon is in need of its next generation of leaders and could benefit from finding ways to alleviate the tendency toward aging that is a major challenge in many nonmetro areas.

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