Oregon’s Nonresident WorkersFebruary 3, 2020 Oregon’s open beaches, rugged mountains, and grape-filled hillsides make it a popular destination for visitors. But there’s something else about Oregon that attracted nearly 119,000 people from out of state in 2017 – jobs. Roughly 7 percent of people who make their living in Oregon make their home in some other state. Not surprising to anyone driving the bridges over the Columbia River during rush hour, four out of five of these nonresident workers come from Washington.
Traveling in the other direction are Oregonians who migrate to work for employers in other states. There were about 63,000 people who lived in Oregon and worked out of state in 2017. This resulted in a net inflow of about 55,600 workers to Oregon – up from a net inflow of 51,400 in 2015. Workers crossing state boundaries influence the economy in a variety of ways. This article focuses on where nonresident workers live, their contribution to Oregon’s General Fund, and their effect on Oregon’s per capita personal income.
Growing Number of Nonresident Workers
The number of nonresident workers grew rapidly over the last decade, from 85,077 in 2007 to 118,785 in 2017. That impressive 40 percent increase in nonresident workers was surpassed by the 51 percent rise in Oregonians working in other states, which grew from 41,875 in 2007 to 63,213 in 2017. Since the number of nonresident workers employed in Oregon started from a larger base, the net inflow of workers continued to grow from 43,202 in 2007 to 55,572 in 2017.
Home Is Where the Tax Form Is
The 93,370 Washingtonians working in Oregon in 2017 accounted for more than 5 percent of all workers with jobs in Oregon. Among Oregon’s other neighbors, there were 8,507 Californians, 7,729 Idahoans, and 614 Nevadans working in Oregon.
The fact that people live in neighboring states and work in Oregon isn’t surprising. But what about workers living in Texas, New York, Florida, and other far away states? Their numbers nearly quadrupled between 2007 and 2017, but they’re not likely crossing the Snake River on I-84 each morning to get to work. Nonresident workers may live in both states but maintain their primary residence outside Oregon, or work in Oregon on temporary assignment, or they may have moved during the year and their residency status wasn’t updated yet. Residency is assigned by the U.S. Census Bureau based on data from federal agencies such as the Internal Revenue Service and the Social Security Administration, so the state where the worker files their taxes is considered home.
One possible explanation for the growing number of nonresident workers is the rise in teleworking – regular employees working outside the conventional workplace and interacting with others via communication technologies. According to the U.S. Census Bureau, the number of people working from home in Oregon increased by 48,781 from 2007 to 2017. There’s a good chance that teleworkers are driving some of the increase in Oregon’s nonresident workforce.
Taxed By Where the Work Takes Place
Regardless of where they claim residency, income earned from services performed in Oregon by nonresidents is subject to Oregon income tax. According to the Oregon Department of Revenue, the total Oregon personal income tax liability of nonresidents was nearly $639 million in 2017, or 8 percent of the total tax liability. Personal income tax is the largest source of revenue for Oregon’s General Fund.
The Oregon personal income tax liability of Washington residents was $325 million in 2017, with nearly 70 percent coming from Clark County residents. In fact, Clark County would rank eighth among Oregon counties for Oregon personal income liability (if it were in Oregon). The Oregon personal income tax liability of Californians was $55 million, Idaho residents were responsible for $28 million, and $230 million came from residents of other areas outside Oregon.
Inflow of Workers Lowers Oregon’s PCPI
Nonresidents working jobs in Oregon lowers one closely followed measure of regional income. The U.S. Bureau of Economic Analysis (BEA) estimate of per capita personal income (PCPI) is the annual sum of all resident income in a geographic area divided by the number of residents in the area. The BEA adjusts for residency by counting work income in the worker’s state of residence. A net outflow of workers adds to a state’s PCPI, while a net inflow of workers, such as Oregon has, subtracts from a state’s PCPI.
With a net $4.9 billion in earnings by the inflow of nonresident workers in 2018, Oregon had the fourth largest net out-adjustment for residency of any state in the BEA’s calculation of PCPI. The large adjustment is a result of Oregon’s major employment center – Portland, with about half of the state’s jobs – being right on the border with Washington. If Oregon had no net inflow of workers in 2018, Oregon’s PCPI would have been about $1,170 higher and would have stood at 96 percent relative to the nation’s PCPI instead of 93 percent. In other words, nonresident workers account for roughly one-third of the gap between Oregon’s PCPI and the nation’s.
Nonresident Workers Data
Information about Oregon’s nonresident workers is from the U.S. Census Bureau’s OnTheMap data, part of the Local Employment Dynamics (LED) partnership with the states. OnTheMap provides the most comprehensive data available for worker flows by residency and place of work. The data is for workers during the second quarter of the year. This analysis only considers a worker’s primary job – the job with the most earnings during the quarter – to avoid double counting of workers with two jobs.
To explore and use the data available from OnTheMap, visit http://onthemap.ces.census.gov.