Race and Ethnic Diversity in Oregon’s Workforce

by Emily Starbuck

May 2, 2018

Historically, racial and ethnic diversity has not been Oregon’s strong suit. The seven county Portland metro area ranks 44th in diversity out of the 50 most populous metro areas in the U.S., with non-Hispanic white residents making up 74 percent of its population as of the U.S. Census Bureau’s 2016 American Community Survey (ACS). With the exception of Asian workers, people of color in Oregon’s workforce face higher unemployment rates and lower wages than non-Hispanic white workers, and work in lower-paying industries.

Changing Demographics Led by Portland Metro

Though it is still predominantly white, Oregon’s population has started to diversify in recent years. In 2016, the share of people of color in Oregon grew to 24 percent, a 37 percent increase from 2006. This is still 15 percentage points lower than the national average, but the share of people of color in Oregon grew more quickly than nationwide average over this 10-year span. The share of Hispanic or Latino residents of any race in Oregon has increased more than any other racial or ethnic group, with a 39 percent increase in the past decade.

Despite being one of the least diverse large metro areas in the U.S., the Portland metro area is one of the most diverse regions in the state of Oregon. Twenty-six percent of the metro’s population identified as people of color in 2016. Salem is Oregon’s most diverse metro area – one out of three residents are people of color. The least diverse metro regions in Oregon are the Bend-Redmond and Grants Pass metro areas. In both metros, less than 13 percent of residents are people of color.

The majority of foreign-born Oregon residents are Hispanic or Latino (42%). However, foreign-born Asian residents make up a higher proportion of Oregon’s Asian population than foreign-born Hispanic or Latino residents do. Nearly two-thirds of Oregon’s Asian residents are foreign-born, while one-third of Oregon’s Hispanic or Latino population are foreign-born. Unlike the overall makeup of the state, the demographics of the foreign-born population have remained nearly the same over the past decade.

Employment Status Varies by Race and Ethnicity

People of color in Oregon have higher labor force participation rates than white residents. As of the 2016 ACS, the white working age population had a labor force participation rate of 61 percent, seven percentage points lower than the labor force participation rate for people of color. Those surveyed that identified as some other race not listed had the highest labor force participation rates, followed by Hispanic or Latino residents.

Unemployment also varies by race and ethnicity. In total, people of color had a higher unemployment rate than the white workforce in 2016. This may be due in part to higher rates of labor force participation since the unemployment rate is a measure of how many workers currently in the labor force are unemployed, yet this explanation does not hold true for every group. Despite their relatively low labor force participation, American Indians reported the highest unemployment rate. Unemployment continues to decline across all groups as the economy continues to expand.
Wage Disparity

Over the last decade, the wage disparity by race and ethnicity has remained consistent. According to the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics (LEHD), Asian and non-Hispanic white workers have the highest wages, and have seen the fastest real wage growth since 2006. In 2016, wages for black, American Indian, mixed-race, and Hispanic or Latino workers of any race ranged between $35,000 and $43,000 annually – at least $10,000 less than white workers and $20,000 less than Asian workers.

On average, real wages for Oregon workers grew 5.7 percent from 2006 to 2016, an increase of $2,753. American Indian workers have seen the lowest real wage growth of 2.9 percent in the last decade. Real wages for all other racial and ethnic groups grew by at least 5 percent. Asian workers have seen the most real wage growth at 20 percent, an increase of $10,618 in their annual average wages.

This wage disparity is due in part to the industries of employment for each racial and ethnic group. The largest industry of employment for all groups is education and health services, with an annual average wage of $50,916 in 2017. However, the breakdown of employment after this industry varies. In aggregate, the second most common industry of employment for people of color is leisure and hospitality, which had the lowest annual average wages in 2017 ($21,381). In contrast, the second most common industry of employment for non-Hispanic white workers is professional and business services, with an annual average wage of $67,895. Manufacturing, which has one of the highest annual average wages in the state ($68,157), employs 19 percent of Asian workers, which may help explain Asian workers’ higher incomes.

Educational attainment is also a factor. The 2016 ACS reported that 35 percent of non-Hispanic whites over 25 have a bachelor’s degree or higher, compared with 23 percent of people of color. However, 51 percent of Asian residents have a bachelor’s degree or higher, the highest of any race or ethnicity. Typically, those with higher education qualify for higher-paying jobs, which may factor into the higher annual average wages for Asian and non-Hispanic white workers.
Conclusion

The majority of economic indicators are consistent for each racial and ethnic group. Asian workers in Oregon have higher rates of educational attainment and are employed in higher-paying industries, and as a result, have lower unemployment rates and higher wages. Since the majority of the Asian population in Oregon is foreign-born, our high-tech companies may court some of these highly educated workers to fill high-skill, high-wage positions. The top three H1B visa sponsors in Oregon are all tech companies; Intel applied for 527 H1B visas in 2017, followed by fellow tech companies Infosys and Wipro with 424 and 274 applications, respectively.

As Oregon’s population continues to diversify, these patterns may change. Positive changes may depend on increasing access to education for people of color and creating pathways to employment in higher-wage fields.


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