Inflation’s Effect on Wages

by Erik Knoder

December 4, 2018

Most Oregon’s counties had an increase in inflation-adjusted average wages from 2007 to 2017. Overall, the average wage for the entire state increased by $4,473 after adjusting for inflation. Most of the statewide increase was driven by the large gains in Washington, Multnomah, and Clackamas counties. These three counties in the Portland metro area are home to more than 1.8 million Oregonians (44% of the state’s population) and nearly $46 billion in payroll (nearly 60 percent of the state’s total). The Portland metro area led Oregon’s recovery from the Great Recession, and it continues to power much of the state’s economy.

Several of the top-gaining counties on a per-job basis are located in the Columbia Gorge. Sherman, Morrow, Hood River, and Wasco counties benefited from their agricultural bases and the expansion of agricultural suppliers and processors. Food manufacturing, wholesale trade, warehousing, and transportation businesses have fueled wage growth.

Only one county, Gilliam, had a higher inflation-adjusted wage in 2007 than in 2017. Gilliam County had good growth in its waste management industry, but the county lost new construction jobs as its windfarm industry finished building out. The county also lost a few state government jobs over the decade.



Overall, 2017 wages that were higher than they were in 2007 even after adjusting for inflation. This corresponds well with the idea that the economy is essentially at full employment.


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