Oregon’s Company Headquarters: Strong Growth and High Wages

by Amy Vander Vliet

February 1, 2018

While Oregon is home to just two Fortune 500 companies, that doesn’t mean headquarters don’t have an impact on our economy. Oregon’s 1,300 establishments in the ‘management of companies’ sector employ nearly 47,000 people and pay a whopping average wage of $114,500. And while it’s just 3 percent of Oregon’s private-sector employment, it generates 6.8 percent of the state’s private-sector payroll and contributed 4.5 percent to job growth since the end of the Great Recession.
(For those wondering, Oregon’s two Fortune 500 companies are Nike (ranked 88th in revenues) and Lithia Motors (318th). Precision Castparts fell off the list in 2017 after being sold to Warren Buffett’s Berkshire Hathaway, thus no longer a publicly traded company.)

What exactly do we mean by ‘management of companies’ (sometimes referred to as headquarters)? According to the official definition, these are establishments primarily engaged in “administering, overseeing, and managing other establishments of the company or enterprise.” They typically carry out strategic or organizational planning and decision-making responsibilities.

In other words, these establishments primarily run some or all of company operations. They can be large global headquarters – think Walmart, with nearly 20,000 people working in its Bentonville, Ark. Headquarters – or small district offices employing fewer than a dozen. The product the company produces, or service it provides, runs the industry gamut from manufacturing to retail to healthcare.

In Oregon, this sector represents a wide array of industries: truck manufacturing (e.g., Daimler); lumber products (Roseburg Forest Products); health care (Kaiser); auto sales (Lithia); utilities (Portland General Electric); and even the vacation rental business with the arrival of San Francisco-based Airbnb’s operational headquarters to Portland in 2014.

But our sportswear companies dominate this sector. It’s not just Nike, with at least 10,000 workers at its Beaverton global headquarters (according to the Portland Business Journal). Columbia Sportswear, adidas, Keen, and LaCrosse all have administrative operations in Oregon, among others. In total, sportswear companies account for more than one-quarter of management-related employment.

Trends

After growing at about the same pace as the overall economy (private sector) through the first half of the 2000s, the management of companies sector began to pull away right before the Great Recession hit. The state would go on to lose nearly 150,000 jobs, a decline of 8 percent. In contrast, management of companies was resilient. It shed just 1,100 jobs, a decline of 3 percent. And while it took nearly five years for the greater economy to regain all of the jobs lost during the recession, management of companies rebounded in two years. Since the end of the recession, it’s grown nearly twice as fast as the overall economy.

Post-recession growth has also handily outpaced national trends in this sector. Since mid-2010, Oregon’s headquarters expanded by 34 percent; one-and-a-half times faster than the nation’s 22 percent.
High Wages

Management of companies pays an average wage of $114,500; more than twice the average across all industries ($50,500). It’s not just well-paid CEOs bringing up the average, although that’s undoubtedly a large part of it. The overall mix of jobs is skewed toward high-paying occupations. Three of the 10 largest occupations pay more than $100,000 annually: general and operations managers ($141,190); financial managers ($133,100); and ‘all other’ managers ($105,200). Together, these three occupations account for 9 percent of the sector’s employment compared with 3 percent across all industries. Delving deeper down the list, eight of the 20 largest occupations pay over $100,000 and account for 16 percent of employment compared with just 4 percent across all industries. 

Oregon Stands Out

While Oregon may not have the largest headquarters sector in the nation – those honors go to California, New York, Pennsylvania, and Ohio – we have one of the highest concentrations of headquarters employment. It accounts for 2.9 percent of total private-sector employment. Only three states are more concentrated: Arkansas at 3.3 percent with Walmart; Minnesota at 3.2 percent with 18 Fortune 500 companies including 3M, General Mills, US Bancorp, and Target; and Rhode Island also at 3.2 percent with CVS and Hasbro. We’re tied with Ohio, which has 25 Fortune 500 companies.

The importance of this sector to Oregon’s economy is also reflected in output data. Management of companies contributed 3.1 percent to the state’s gross domestic product (GDP) in 2016. This is significantly higher than the national average of 1.9 percent, and higher than all but five states: the four mentioned above, plus Pennsylvania, home to Comcast, Rite Aid, and U.S. Steel.

Outlook

Despite recent layoffs announced by Nike, the outlook for Oregon’s management of companies sector is positive. Preliminary forecasts show this sector growing twice as fast as the overall economy between now and 2026.


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