Labor Force Participation Can Be a Bumpy Ride

September 14, 2020

Eastern Oregon’s labor force participation rate dipped by 0.5 percentage point in 2019, decreasing to 60.0 percent. Seven counties in the region saw a decrease in the participation rate over the year. Grant County was the lone county in the region to see an increase, rising 0.5 percentage point to 52.6 percent. Participation dropped in 31 Oregon counties, as well as the state overall. Labor force participation was steady in one county and increased in four. The long-term trend for Eastern Oregon is a slow, bumpy road downhill, as seen in the accompanying chart.
Participation in the labor force was strongest in 2002 and similarly strong in 2011. Low points came from 2005 to 2007 and 2013 to 2015. The peaks and valleys of Eastern Oregon’s labor force participation seem counterintuitive given the official national timeline for the 2001 and 2007 recessions. Labor force participation strengthened in the region during both recessions, and continued to strengthen for a relatively short time following the official end of these recessions. Then participation weakened in the region and was lowest during periods of economic expansion.

Population dynamics and the timing of regional recovery may explain this counterintuitive behavior. While the 2001 recession was short, officially ending in November of the same year, Eastern Oregon saw employment decrease from 2002 until 2005. The region then added employment again until the Great Recession hit in 2007. Officially, the Great Recession ended in June 2009, but employment in Eastern Oregon didn’t bottom out until January 2010. Employment was roughly flat thereafter, until 2015 when the region finally started to turn up the heat on economic recovery. Growth in the civilian noninstitutionalized population was steady from 2001 to 2009, which suggests that new participants were moving into Eastern Oregon during both recessions and adding to the region’s labor market while the economy was still struggling. In addition, labor force growth likely ramped up as well in the region as family members who normally choose not to work entered the labor force to compensate for family members who lost jobs or saw work hours cut. Given these factors and allowing for a certain degree of lag, labor force participation tracks roughly with the timing of employment gains, losses, and stagnation in Eastern Oregon.
Declining labor force participation in Eastern Oregon from 2000 to 2019 was strongest in four counties that experienced a large shift in the share of residents 65 years and older. Grant County saw the 65 and older population jump from 17.0 percent of residents in 2000 to 34.6 percent in 2019. Harney’s share of residents 65 and older grew 10.8 percentage points to reach 25.8 percent, while Wallowa’s grew 12.3 percentage points to reach 31.3 percent. Union County’s share of 65-plus residents rose 7.1 percentage points to nearly 22.0 percent. At the same time, the county’s labor force participation rate dropped 7.9 percentage points to 55.3 percent (third lowest in the region). Union County would likely have a much larger share of residents 65 and older if not for Eastern Oregon University. The University helps prop up Union’s younger population, while the student population also puts downward pressure on labor force participation rates.
Baker County also had a large shift in the share of residents 65 and older, which makes the county appear to be an outlier. Baker’s share of 65 and older residents rose 8.9 percentage points to 28.0 percent, while the county’s labor force participation rate decreased by only 2.6 percentage points from 2000 to 2019. However, in 2000, Baker had the highest share of residents 65 and older in the region and an already low labor force participation rate at 56.2 percent (the second lowest). In 2019, Baker had the third highest share of residents 65 and older with the second lowest participation rate.

Although Eastern Oregon has a slightly lower labor force participation rate than Oregon overall, the regional and statewide trends have been in line since 2011. The trend continues downward as an aging population drags on the region’s participation rates. In Eastern Oregon, the long-term trend is a slow descent along a bumpy road.