Oregon’s Nonresident WorkersFebruary 14, 2023
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 125,000 people from out of state in 2019 – jobs. Roughly 7% 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, almost four out of every 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 almost 66,000 people who lived in Oregon and worked out of state in 2019. This resulted in a net inflow of nearly 59,000 workers to Oregon – up from a net inflow of 57,000 in 2018. 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 87,940 in 2009 to 124,653 in 2019. That impressive 42% increase in nonresident workers was surpassed by the 57% rise in Oregonians working in other states, which grew from 41,808 in 2009 to 65,787 in 2019. Overall, the net inflow of workers grew from 46,132 in 2009 to 58,866 in 2019.
Home Is Where the Tax Form Is
The 97,610 Washingtonians working in Oregon in 2019 accounted for more than 5% of all workers with jobs in Oregon. Among Oregon’s other neighbors, there were 9,277 Californians, 7,888 Idahoans, and 753 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, Arizona, Florida, and other far away states? Their numbers increased 127% between 2009 and 2019, 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.
Another 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 339,142 from 2011 to 2021. 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 more than $782 million for 2020 tax returns, or 8% 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 $362 million for 2020 tax returns, with 63% of that 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 nearly $62 million, Idaho residents were responsible for nearly $49 million, and $310 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 $6 billion in earnings by the inflow of nonresident workers in 2021, Oregon had the fourth-largest net out adjustment to income 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 2021, Oregon’s PCPI would have been about $1,411 higher, and Oregon’s PCPI would have been 98% of the nation’s PCPI instead of the 96% it actually was with so many nonresident workers. In other words, nonresident workers account for 55% 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 considers only a worker’s primary job – the job with the most earnings during the quarter – to avoid double counting of workers with two jobs.
Explore and use the data available from OnTheMap.