Migration in Oregon Before the Days of COVID

May 5, 2020

One of Oregon’s most significant competitive advantages is migration. New migrants become essential contributors to the statewide labor supply, allowing businesses to tap into a more diverse and higher skilled pool of labor. The region has generally had this competitive advantage since migrants began pouring into the west on the Oregon Trail. In today’s modern economy, many of the fastest growing states are also the states with the strongest and fastest growing economies.

There is always a chicken or egg question when talking about economic growth and migration. Does migration lead to economic growth? Or does the economic growth attract new migrants who are looking for a good job? The answer is probably both, but it is important to understand that they are linked. The share of Oregon’s population growth coming from net migration rises and falls with the rate of employment growth. Quality of life and economic opportunity attract people to Oregon. In turn, those migrants drive an increase in demand for local goods and services, which drives employment up higher. A positive feedback loop.
Portland State University recently released their 2019 Annual Population Report, which highlights the nature of Oregon’s population change last year. In a world of COVID-19, this 2019 population report may seem like it comes from a vastly different world. It is a reflection of slowing growth in an economy that was just wrapping up the longest expansion in U.S. history. Rates of job growth had been tailing off since 2016, but the share of population growth from migration only began to show its first sign of weakening in 2019.

Oregon’s population rose by an estimated 41,100 in 2019 (+1%), down notably from the gain of 54,000 in 2018 and 64,750 in 2017. Although the state continued to see positive net migration in 2019, the growth from migrants was down 26 percent from levels in 2018 and down 38 percent from levels in 2017.
It is impossible to parse out exactly why population gains posted such a notable slowdown in 2019. The slowing job market was likely the largest driver, but housing availability and affordability may have also been a factor. Although Oregon’s housing market remains more affordable than neighbors to our north or south, many of the region’s largest metropolitan areas are losing the “low cost” competitive advantage. California continues to dominate the rankings of the least affordable housing markets along the West Coast. According to Zillow, the Bend metropolitan area is the most expensive market in Oregon, yet housing prices are roughly 38 percent lower than the Los Angeles area. Despite the fact that people from these high-cost metro areas still find much of Oregon affordable, the gap is closing as home price appreciation has been far faster for Oregon’s metro areas the past four years than metro areas in California. As prices rise and supply drops, communities in other states, such as Boise, Idaho, become increasingly more attractive.

Today we live in a world gripped by the COVID-19 pandemic. Although it is impossible to tell how the pandemic is going to impact migration in the long term, there are a few things we can be certain of in the short term. First, migration will be at or near historically low levels in 2020. Geographic mobility has stalled across the globe due to stay at home orders. Migration from one state to another will likely remain at very low levels for the remainder of 2020.

Second, our long economic expansion has ended. Through the first six weeks of the COVID-19 crisis, more than 30 million Americans filed for unemployment insurance. Here in Oregon about 362,000 initial claims for unemployment benefits were filed over the first six weeks of restrictions and closures in response to the pandemic, representing roughly 17 percent of the statewide labor force. As shown earlier, our migration patterns mimic the employment landscape. During our last recession that began in 2008, migration drew to a stand still for several years. The severity of these COVID-employment losses means we will likely see very little migration in 2020.

The long-term outlook is unknown, but certainly less grim. Once the health crisis gets under control and consumer confidence rebounds, our migration patterns will likely bounce back to normal levels. Oregon will remain attractive from a quality of life perspective and there is every reason to believe that Oregon’s economy will recover as quickly as the national economy.