Professional, Scientific, and Technical Services Employment in the Rogue Valley

by Guy Tauer

June 5, 2017

Jackson County’s professional, scientific, and technical services industry included 568 business units with 2,362 jobs that had a total payroll of $122,128,527 in 2016. Josephine County had 156 business units with 535 jobs and $19,167,048 total payroll in this industry last year.

The professional, scientific, and technical services (PSTS) industry engages in processes where human capital is the major input. This industry depends on the knowledge and skills of their employees, often on an assignment basis, where an individual or team is responsible for the delivery of services to the client. The distinguishing feature of the professional, scientific, and technical services subsector is the fact that most of the industries grouped in it have production processes that are almost wholly dependent on worker skills. In general, equipment and materials are not of major importance, unlike health care, for example, where ''high tech'' machines and materials are important collaborating inputs to labor skills in the production of health care. Thus, the establishments classified in this subsector sell expertise. Much of the expertise requires degrees, though not in every case.
Employment in a number of more detailed PSTS industries are categorized in a recent analysis by East Cascades regional economist Damon Runberg as “lifestyle industries.” There were a variety of qualities used to develop an industry definition for the lifestyle sector. Damon writes “These are traded-sector businesses that are flexible in where they can be located and largely internet based. These lifestyle businesses are not to be confused with leisure and hospitality or tourism businesses, such as hotels, recreation, restaurants, or other tourism related businesses. Instead, these are businesses with enough flexibility to locate their business where they choose. They are not bound by access to major infrastructure networks. Finally, the primary way these businesses deliver their good or service is through the internet or telephone.” Lifestyle industries within the PSTS sector include architectural, engineering and related services; specialized design services; computer systems design and related services; management, scientific and technical consulting services; scientific research and development services; advertising, public relations and related services; marketing research and public opinion polling; and all other professional, scientific and professional services not elsewhere classified.
As economies continue to transition to more knowledge-based work, with higher wage and skill jobs coveted by workforce and economic development professionals, how an area performs in attracting and retaining jobs in these industries should be on their radar screens. The average wage per job in PSTS industry in Oregon was $74,449 in 2016. Wages varied widely among Oregon counties, with more rural areas having significantly lower average wages than particularly the Portland metropolitan area counties. Jackson County average wages were about 70 percent of the statewide average, at $51,706 in 2016, the 10th highest among published Oregon counties. Josephine County’s average wage was only about one-half of the statewide average, at just $35,826 and was the fourth lowest wage in this industry among Oregon counties. Multnomah, Clackamas and Hood River counties all exceeded the Oregon average wage while Benton and Washington County essentially matched the statewide PSTS annual average wage per job in 2016.

Looking at longer-term job growth trends among Oregon’s metropolitan statistical areas shows the Rogue Valley lagging behind in job growth compared with most other metropolitan areas of the state. This trend of slower job gains in the Rogue Valley continued in 2016. Among smaller and medium size metropolitan statistical areas (MSA), the Eugene and Bend MSAs added about 200 PSTS jobs, where the Medford MSA (Jackson County) added about 50 jobs. Professional, scientific, and technical services employment actually declined slightly in the Grants Pass MSA (Josephine County) from December 2015 to December 2016. This fact deserves further attention. Why are other metropolitan areas doing relatively better in attracting and retaining these higher-wage, higher skill jobs, especially in the “lifestyle industry” group? These are essentially traded-sector firms that are not as place-dependent as service industries that serve a local customer base.

Occupational Employment

The diverse group of industries also has a wide variety of occupations that employ many higher-wage, higher-skill workers in the Rogue Valley. According to the “industry profile,” available from qualityinfo.org, more than 110 different occupations were employed in the PSTS industry. The lowest-paying occupations included animal caretakers, veterinary assistants, cashiers, and mail clerks. Highest-paying occupations included lawyers, information security analysts, chief executives, financial managers, sales managers, computer and information systems managers, management analysts, and veterinarians. The table lists the top occupations within the professional, scientific, and technical services industry where both occupational employment and wage data are both published for the Rogue Valley.
Employment Concentration: Location Quotients

Oregon has less concentration of employment in this industry than the U.S. overall. An industry’s location quotient (LQ) is its share of total employment in a local area compared with the concentration of employment in that industry in a base area. In this analysis of location quotients, we compare the concentration of employment in professional, scientific, and technical services in Oregon and its counties with the United States figures. Oregon has only 80 percent of the U.S. employment concentration, as of September 2016, therefore a LQ of 0.8. Among Oregon counties, Benton, Clackamas, Washington, Deschutes and Hood River all had PSTS location quotients above the Oregon average, but all were below the U.S. average industry concentration.
Jackson County ranked about in the middle of Oregon counties, with a LQ of 0.44 – meaning that the percent of PSTS payroll employment was just less than one-half of the U.S. percent of employment in professional, scientific, and technical services. Josephine had the eighth lowest concentration of PSTS employment among published Oregon counties, at just 30 percent of the U.S. average concentration, or a LQ of 0.3 in September 2016, according the Bureau of Labor Statistics.

With a smaller concentration of employment and average wages, and slower long and short-term growth than many other Oregon metropolitan areas, further research could be done in analyzing what factors are depressing wage and job growth in these typically higher-wage, higher-skilled jobs in the Rogue Valley economy. Is it the mix of industries that our local area has compared with the Portland or Bend areas? Is it the mix of occupations found in our professional, scientific, and technical services industry, or is it related to growing clusters of these types of industries found in larger metropolitan areas compared with the Rogue Valley? This topic seems ripe for further research from economic and workforce development practitioners.


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