Employment Recovery Continues in Rural Oregon

by Jessica Nelson

May 12, 2017

Oregon’s rapid job growth has received significant attention as employment growth ranked eighth fastest in the United States over the past year. The economy is near full employment and overall, Oregon’s employment levels have reached all-time highs.

Much of the current economic expansion is being driven by job growth in the state’s urban centers. While most of rural Oregon saw faster job growth than the U.S. average last year, most rural counties still have fewer jobs today than they did 10 years ago. Twenty of Oregon’s 36 counties have yet to recover from the Great Recession – of those, 17 are rural. Why is the pace of recovery so much slower in rural Oregon?

A variety of factors have led to a much slower recovery in rural Oregon. Less industry diversity in the rural economy increases vulnerability to economic shocks. The rural population and workforce are aging quickly. And rural Oregon needs improved access to infrastructure in order to get rural goods to market. Local areas across Oregon are working toward the economy of the future. New opportunities exist today, with more on the horizon. 

An Uneven Recovery

Oregon has been in a period of job expansion since February 2010. In October 2014 statewide employment levels exceeded the pre-recession peak. It was a long recession and slow recovery, taking six and a half years to add back all the lost jobs. However, in rural Oregon the recovery is ongoing. Today, employment remains 3.2 percent below the pre-recession peak in the combined rural counties, while metro counties as a group are solidly above their pre-recession peak. In order to fully recover from the recession, rural counties would need to add about 7,800 additional jobs, which would take another two years at the current pace of job growth.
Job Losses and Gains by Industry Wage Level

In addition to having farther to grow to reach pre-recession employment levels in some rural areas around the state, the jobs that have returned in nonmetro areas have more often been lower- and mid-wage jobs. Higher-wage jobs have yet to recover.

Between the second quarter of 2007 and the second quarter of 2009, Oregon’s rural counties lost almost 27,000 private-sector jobs. When the industries are lined up in terms of median wage and split into higher-wage, mid-wage, and lower-wage thirds by industry, the largest job loss occurred in the higher-wage industries. Rural Oregon’s high-wage industries – such as wood product manufacturing, specialty trade contractors, and forestry and logging – dropped more than 11,000 jobs in the Great Recession. Mid-wage industries dropped about 6,000 jobs in rural Oregon, and lower-wage industries lost 9,000 jobs.
In the recovery period from the second quarter of 2009 through the second quarter of 2016, lower- and mid-wage industries, such as food services and drinking places, have made full recoveries in Oregon’s rural counties overall, with nearly 14,000 lower-wage jobs and 10,000 mid-wage jobs added. The higher-wage industries have added 6,000 jobs, little more than half of the jobs lost between 2007 and 2009. Jobs in higher-wage construction of buildings, specialty trade contractors, and wood product manufacturing remain more than 20 percent below the level in 2007.

Rural Job Opportunities

The economy has been strong in recent years in much of the state. Unemployment rates are below their long-term averages and job growth has occurred in all areas of the state. Employers are having increasing difficulty finding the workers they need to fill job vacancies. And on the horizon, with an aging population there will be many job openings and employers seeking their next great hire over the coming years. Opportunities are out there!

Anticipated job growth in rural areas of Oregon, according to employment projections covering the 2014 to 2024 period, is muted compared with anticipated growth in metro areas. Between 2014 and 2024 statewide growth is anticipated to be about 14 percent. In the eight-county Eastern Oregon region, growth is pegged at 6 percent – less than half the statewide rate. South Central Oregon (Klamath and Lake counties) anticipates growth of almost 7 percent. In the Southwestern Oregon area – made up of Coos and Curry counties along the south coast and Douglas County inland – projections show growth of 7 percent by 2024.

Rural areas that come close to matching the anticipated growth in the state’s metros include the Central Oregon area, where rapid growth in Bend is providing some job opportunities for outlying areas, too. The three-county Central Oregon area (Crook, Deschutes, and Jefferson counties) anticipates faster than statewide growth, with a projected rate of 16 percent by 2024. The Columbia Gorge is also expected to grow quickly among rural areas, with a projected rate of 11 percent by 2024. The Columbia Gorge benefits from proximity to the Portland area, a transportation corridor along I-84, and renewable energy development.

Replacement Job Openings

Even when an economy isn’t growing fast, there’s enough churn in the labor market that job opportunities due to the need to replace workers who leave their occupations are still expected. 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. In some areas of the state replacement openings make up an even larger share. 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 retirements, for new workers to replace those who are leaving.
In Northeast Oregon (Baker, Union, and Wallowa counties), job growth of about 6 percent is anticipated between 2014 and 2024, with 1,100 openings projected due to growth and 4,600 to replace workers leaving their occupations. Education and health services employers can anticipate more than 900 openings due to replacements; it is the industry with the most replacement needs over the decade. Retail trade, government and leisure and hospitality will also need to replace a significant number of current workers, each with more than 500 replacement openings expected. More than 400 replacement openings are expected in manufacturing.

Projections show growth of 5 percent in the South Coast region (Coos and Curry counties), with 1,600 growth openings and 7,200 replacement openings projected. Replacements are expected to be greatest in education and health services, followed by retail trade and leisure and hospitality – each industry expects more than 1,100 replacement openings between 2014 and 2024. Replacement openings in government should number close to 900 in the two counties. Manufacturing can anticipate a need for about 500 workers to fill jobs as current workers leave their occupations.

Employment in the Columbia Basin (Grant, Morrow, and Umatilla counties) is expected to grow 7 percent between 2014 and 2024. More than 2,900 job openings are anticipated due to growth and another 9,600 openings are anticipated to replace workers leaving their occupations, mostly through retirements. Government is the top source of replacement needs, with more than 1,500 replacement openings over the decade. Education and health services will have 1,400 replacement openings, while manufacturing, retail trade, and natural resources industries will have more than 1,000 apiece.

South Central Oregon (Klamath and Lake counties) is expected to grow about 7 percent between 2014 and 2024. The region anticipates 1,800 job openings due to growth and 6,500 due to replacements by 2024. The educational and health services industry is once again a major source of replacement openings, accounting for 1,300 openings. Retail trade and leisure and hospitality will each have close to 1,000 replacement openings.

Projected job growth is pegged at 9 percent in Douglas County between 2014 and 2024. The county can expect 3,300 job openings due to growth and 9,000 to replace workers leaving their occupations. The most replacements are expected in education and health services, at 1,600. Another 1,300 replacement openings are expected in retail trade. Manufacturing and leisure and hospitality will each have about 1,000 replacement openings.

The Columbia Gorge area is the fastest-growing rural region in Oregon, with growth projected at 11 percent between 2014 and 2024. Growth will add about 3,300 job openings, while 7,300 replacement openings are projected. Leisure and hospitality expects the most replacement openings, swiftly followed by education and health services, and natural resources – each accounts for about 1,200 openings by 2024.

The Northwest Oregon region includes two metropolitan counties and three nonmetropolitan counties along the north coast. The data is heavily weighted toward the larger metro counties; projections for 2014 to 2024 show growth of 7 percent. Northwest Oregon can anticipate 7,400 openings due to growth and another 24,200 to replace workers who leave their occupations. Industries with the greatest anticipated replacement openings include education and health services, leisure and hospitality, and retail trade. Regional manufacturers can anticipate needing to fill more than 2,000 openings to replace current workers by 2024.

Read more about employment in Oregon’s 23 rural counties in the full report The Employment Landscape of Rural Oregon at QualityInfo.org.

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