Labor Market Trends in Oregon

February 9, 2023

Oregon ended 2022 at a new, all-time high level of total nonfarm employment. By the end of 2022, Oregon’s labor force was larger than prior to the pandemic. Most Oregonians who aren’t in the labor force are retired. The number of unemployed in the state remained historically low in 2022.

Employers have been hiring rapidly and the level of openings is still elevated compared with prior to the pandemic. Employers report most of their job vacancies as difficult to fill. These tight labor market conditions persisted through 2022.

Unemployed Adults Not Working in Oregon

Oregon’s labor force consists of two main parts: employed workers and the unemployed. The employed part of the labor force includes anyone 16 and older who lives in Oregon, and works either for an employer, is self-employed, or works on a farm. The unemployed part of the labor force is not working, but has been actively looking for a job in the past four weeks, and is available and able to take a job if it’s offered to them. By definition, those who are unemployed in Oregon’s labor force are not working, but are able to work, and actively seeking work.

Oregon’s labor force was larger at the end of 2022 than it was before the pandemic recession. Although the number of unemployed people has changed dramatically over the past five years, the levels of unemployment in Oregon were relatively low at the end of 2022. Statewide, unemployment totaled 99,000 in December 2022, which was about 27,000 above the pre-recession level.

Adults Not in Oregon’s Labor Force

Another category of adults not working in Oregon includes those who are not in the labor force. They are at least 16 years old, have not actively looked for job in the past four weeks, and/or are not available or able to take a job. The largest group of Oregon adults who are not in the labor force are retired, although some may be younger than 65. The number of retired people not in Oregon’s labor force increased from 735,000 in 2018 to 741,000 in 2022. Another category of Oregon adults are not in the labor force due to disability; this has declined from 149,000 in 2018 to 139,000 in 2022.

Another set of Oregon adults do not participate in the labor force for “other reasons.” Some may be focusing on high school or higher education. Some may be out of the labor force due to family or home care obligations, or other priorities. While this number has risen since the 2000s, the number of people in Oregon who were out of the labor force for other reasons was similar in 2018 (409,000) and 2022 (412,000).

Labor Force Participation

Oregon’s labor force participation rate is the share of the overall population ages 16 and older who are either working, or unemployed but actively seeking work, and available and able to take a job. The labor force participation rate accounts for those who are both in and out of an area’s labor force.

Oregon’s labor force participation rate peaked at 68.9% in 1998. The participation rate has declined, both in Oregon and the U.S., due largely to demographic changes such as more retirees. In addition, some ages 16 to 24 have delayed entry into the labor force due to greater participation in education and school-related activities than in the past. Still, Oregon’s labor force participation rate was 62.9% in December 2022. Recent participation rates statewide have been at the highest level since 2012.

Labor force participation varies widely among Oregon’s counties. In 2021, the most recent data available, the labor force participation rate ranged from a low of 43.7% in Curry County to a high of 75.9% in Hood River County. Several factors can influence the participation rate in local areas. Counties with larger shares of population either 65 or older, or between the ages of 16 and 24, tend to have lower labor force participation rates. Counties with larger populations of Hispanic or Latino origin generally tend to have higher participation rates. Oregonians of Hispanic or Latino ethnicity had a relatively high labor force participation rate (68.5%) in 2021.

Leisure and Hospitality Employment

Overall, Oregon lost 282,000 jobs in the pandemic recession, and regained those job losses as of August 2022. Oregon ended 2022 at a new, all-time high level of total nonfarm employment. Oregon’s hotels, restaurants, bars, and entertainment places were the hardest-hit in the pandemic recession. Statewide, the leisure and hospitality sector lost one out of every two jobs in two months’ time. By the end of 2022, leisure and hospitality regained 93% of those job losses. Still, the sector remains 8,000 jobs (-3.7%) below its pre-recession jobs level.

Difficulty Finding Workers

Oregon employers have added jobs at a record pace over the past two years. They added nearly 100,000 jobs between December 2020 and December 2021, and another 81,000 jobs between December 2021 and the end of 2022. That has brought unemployment back down to relatively low levels. Oregon had more vacancies than unemployed workers from fall 2021 through summer 2022.

The rapid hiring of the past two years has created more competition among employers to get workers. Meanwhile, hiring demand has continued at or near record-high levels for nearly two years. For more than a year, Oregon’s private employers had about 100,000 jobs openings at any given time. They still reported 86,000 job openings in fall 2022. Before the pandemic recession, the largest number of job openings in Oregon totaled about 67,000 in summer 2017.

Relatively low unemployment and much higher numbers of job openings have heightened the difficulty for employers to fill their vacancies. For nearly two years, Oregon’s private employers have reported seven out of 10 job vacancies as hard to fill. The most commonly cited reason for difficulty filling job vacancies is a lack of applicants.

Population Trends

The primary way Oregon has grown its labor force in recent decades is through net in-migration – more people moving here from other states and areas. This trend was slowing before the pandemic recession, and has declined further in the past few years. Oregon’s Office of Economic Analysis recently reviewed changes in Oregon’s population, which show fewer births, more deaths, and lower net in-migration.

Hiring and Retention in a Tight Labor Market

One out of four job holders in Oregon is at least 55 years old. Low unemployment, high levels of job openings, slowing population gains (or even decline), and an aging population all contribute to ongoing tight labor market conditions. Through surveys and conversations, businesses have told the Employment Department about ways they make job openings more competitive to attract and retain workers:

• Raise wages
• Add benefits and other job perks
• More flexibility in scheduling, remote work, or other options
• Reduce previous experience or other requirements
• Increase the number, types, and geographical area of job postings
• Speed up the hiring process