Josephine County Employment Growth Strong, but Wages Rising Slowly

Josephine County Employment Growth Strong, but Wages Rising Slowly

by Guy Tauer

July 18, 2017

Payroll employment rose strongly in Josephine County from May 2016 to May 2017, up by 4.2 percent, which was nearly the fastest growth among Oregon’s metro area counties. Only Deschutes County had faster job growth during that time, adding 5.0 percent. So that’s the good news. The less good news is that growth in average wages during the most recent year available in Josephine County has been soft, only rising by 2.3 percent.

You might assume that with unemployment rates hovering near record lows and strong job growth, the result would be rising average pay. However, the rate of job growth alone doesn’t explain annual average pay growth. Other factors such as the number of hours worked, seasonal or part-time jobs, and industry mix also affect the rate of overall pay growth. Let’s take a closer look at how industry mix affected Josephine County’s average pay over the last year.

Josephine County Job Growth by Average Pay and Industry

To get a sense of why wage growth slowed to 2.3 percent in 2016 we can analyze job change by industry, grouping industries by low, medium, and high wage. In this analysis, we’ll start at the broad industry group. It’s useful to look at this wider grouping of industries because once we drill down to greater industry detail, we lose important details due to confidentiality suppressions. For example, in Josephine County, data are not disclosed in significant industries such as hospitals or furniture manufacturing. But if we look at broader sectors like health care and social assistance, and manufacturing, their employment and payroll are included those broader categories.

One factor in Josephine County’s slower wage growth is that low wage industries grew faster than medium and high wage industries from the fourth quarter of 2015 to the fourth quarter of 2016. Low wage industries (+6.6%) grew at nearly twice the rate of high wage industries (+3.4%). In this analysis, all published industries were sorted by average wage, and then groups of industries with approximately equal thirds of employment were used to make the comparisons.

Low Wage Sectors ($28,000 Annual Wage or Less)

The low wage group of industries added about 540 jobs, up by 6.6 percent between fourth quarter 2015 and fourth quarter 2016. Retail trade accounted for the greatest number of jobs in this group, up by about 210. Other services and leisure and hospitality both added roughly 150 jobs during that time.

Medium Wage Sectors ($28,001 to $43,100 Annual Wage)

The group of medium wage industries gained about 390 jobs over the year, an increase of 5.9 percent. Manufacturing lost about 50 jobs, while other medium wage sector industries boosted jobs during those four quarters. Natural resources and mining, and professional and business services both added about 150 jobs. Construction employment gained about 100 new jobs.

High Wage Sector ($43,101 or Greater Annual Wage)

The high wage group of industries added about 230 jobs from fourth quarter 2015 to fourth quarter 2016, a 3.4 percent increase. Health care and social assistance was the largest contributor to the increase, adding about 220 new jobs. Financial activities employment also rose, up by about 50. Wholesale trade employment fell by about 40, offsetting some of the increase in other high wage industries.

It is good news that Josephine County has experienced strong job growth during the past couple of years. However, that good news is somewhat tempered by slow growing average wages. Slower growth in average pay is in part due to more job growth in low wage industries and slower job growth in Josephine’s high wage industries.