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Inflation’s Effect on Wages

Inflation’s Effect on Wages

by Erik Knoder

November 2, 2017

Most Oregon’s counties had an increase in inflation-adjusted average wages from 2006 to 2016. Overall, the average wage for the entire state increased by $2,865 after adjusting for inflation. Most of the statewide increase was driven by the large gains in Washington and Multnomah counties. These two counties in the Portland metro area are home to nearly 1.4 million Oregonians (about one-third of the state’s population) and nearly $46 billion in payroll (about 50 percent of the state’s total).

Several of the top-gaining counties on a per-person 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.

Some counties with the larger losses were hit unusually hard in the Great Recession. Columbia and Linn counties lost many jobs in paper manufacturing and wood product manufacturing. Klamath County was doubly hit by the housing bust as local housing and mortgage businesses cut back and well as manufacturers supplying the national construction market.

Despite some losses, a majority of Oregon’s counties – 29 out of 36 – had 2016 wages that were higher than they were in 2006 even after adjusting for inflation. Even better news is that these counties are home to about 88 percent of the state’s population.