Third Quarter 2021: Higher Wages at Larger Firms, and Small Firm Job Gains
May 9, 2022 Oregon had 1.99 million people working in jobs covered by the state’s unemployment insurance system during the third quarter of 2021. They earned a total of $29.3 billion, with an average wage of about $14,700 per worker for the quarter. The median hourly pay during the quarter was $23.49.Bigger Wages in Larger Firms
Just about 2% of Oregon’s firms have 100 or more employees. Yet, more than half (56%) of all jobs in third quarter 2021 were at firms with at least 100 employees. One out of every three jobs (33%) in Oregon was with a firm with 500+ employees.
Bigger employers tend to pay higher wages. Firms with 500 or more employees paid a median hourly wage of $27.37 in the third quarter. That’s nearly $4 per hour more than the next-highest median of $23.55, which was also in the next-largest firm size class of 250 to 499 employees. As the firm size class got smaller, so too did the median wage in third quarter 2021, all the way down to firms with five to nine employees. Oregon’s smallest employers stood out as an exception to this trend. The median wage for firms with fewer than five employees was $22.29, about the same as firms with 50 to 99 employees ($22.27).



The larger factor pulling down real median wage gains to 1% between the third quarters of 2020 and 2021 was inflation. Of the 147,000 jobs Oregon employers added to their covered payrolls, gains occurred in every wage category except jobs paying less than $15.00. So employment did move up the wage scale between the fall of 2020 and 2021.
Meanwhile, the Consumer Price Index started to rise notably in 2021, topping 5% over the year by the third quarter of 2021. This brought median wage gains into negative territory for firms with five to nine employees, those with 20 to 49 employees, and firms with 50 to 99 employees. Larger firms still had real median wage gains, but they were much smaller than the year before. Interestingly, firms with fewer than five employees had the largest inflation-adjusted median wage gain (+3.5%) between the third quarters of 2020 and 2021.
Job Gains at Smaller Firms
Although smaller firms tend to pay lower median wages than the largest employers, firms with the fewest employees are leading post-pandemic job gains. By the third quarter of 2021, each firm category with less than 20 employees rebounded and gained jobs relative to pre-pandemic levels two years before. The largest gains occurred at firms with fewer than 5 employees (+6.5%). Meanwhile, the largest deficits remained at firms with 250 to 499 employees (-5.8%) and those with 500 or more employees (-4.2%).

Another possibility could be increased startup activity in the wake of the pandemic recession. Research from the St. Louis Federal Reserve shows that startups averaged four employees nationally.
Outsized Job Growth and Pay
Oregon’s large employers make up a small share of all firms. At the same time, they account for a majority of jobs, and the highest median hourly wages paid to workers. Meanwhile, Oregon’s smallest employers, those with fewer than five employees, countered the trend of higher wages in larger firms with their relatively high median wages. The state’s smallest firms also had the largest job gains of any employer size class relative to the pre-pandemic period.