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Rural Oregon lags in job growth, employment

December 20, 2012

Job growth in the Portland area and other metro counties combinedBy Oregon Employment Department

Oregon’s job situation has improved in recent months as more people are finding work. The recovery has been far from ideal however. We have profiled Oregon’s key workforce challenges at the statewide level in other articles, but many of these challenges are more severe in rural Oregon. This article looks at several key workforce challenges in Oregon’s 25 non-metropolitan counties.

Unemployment is Persistently Higher in Rural Oregon

Persistently high unemployment has long been a challenge for rural Oregon. Unemployment rates in non-metropolitan counties were already higher at the onset of the recession than they were in the metropolitan areas (MSAs) and that continues today. The unemployment rate for the combined non-metropolitan counties was 6.4 percent in December 2007, 1.7 percentage points above the Portland area’s unemployment rate of 4.7 percent, and 1 percentage point above the 5.4 percent unemployment rate in the combined metro areas of Bend, Corvallis, Eugene-Springfield, Medford, and Salem (Graph 1).

More than three years after the end of the recession, unemployment rates for Oregon’s rural counties remain stubbornly high. The non-metro unemployment rate was 10.3 percent in September 2012, 2.8 percentage points above the Portland area unemployment rate of 7.5 percent and 2.0 percentage points higher than the other combined metro areas’ unemployment rate of 9.3 percent.

 

Graph 1

Unemployment rates higher in non-metro counties

Structural Changes Hit Rural Oregon Especially Hard

Structural changes in a region’s economy occur when technology, trade, or policy changes alter the fundamental structure of industries within the region. When these structural changes lead to large job losses, it creates structural unemployment that can persist even through an economic recovery. This is because some workers who lost their jobs may not have the skills needed by growing industries. It takes time for displaced workers to retrain for new jobs or move to where jobs are available.

The most challenging economic structural change faced by rural Oregon has been the reduction in logging jobs, and the shift away from wood product manufacturing jobs. In 1979, roughly two of every three manufacturing jobs in rural Oregon belonged in wood product manufacturing. By 2010, wood products accounted for one out of three rural manufacturing jobs. The mix of Oregon’s manufacturing jobs shifted away from “traditional” manufacturing jobs in non-metro areas to manufacturing jobs in the metro areas, many of which require workers with completely different sets of skills. In 1979, Oregon’s metropolitan areas – including counties that would become MSAs in later years – accounted for about seven out of every 10 manufacturing jobs. Now, about nine out of every 10 jobs in manufacturing is in a metropolitan area.

 

Slower Job Growth in Rural Areas

Structural change and the recession, among other factors, have worsened the problem of slow job growth in rural Oregon. The state’s non-metro counties experienced far slower employment growth than their metropolitan counterparts over the past two decades (Graph 2). For the combined non-metro counties, employment rose each year throughout the 1990s, and the number of jobs grew 19 percent from 1990 to 2000. But that rate of jobs growth was far short of the much faster pace of the metro areas. The number of jobs in the Portland area grew 33 percent during the 1990s, while the other combined metro areas grew 29 percent.

The disparity between non-metro and metro employment growth rates continued to grow during the next decade. Non-metro counties’ employment grew 24 percent, adding 61,000 jobs from 2000 through their pre-recession peak in 2007. Job growth was much faster in Oregon’s metro areas during that period. The Portland area gained 305,000 jobs (42%) over the period, and employment in Oregon’s other combined metro areas increased by 155,000 jobs (45%).

Like all areas, rural Oregon lost a lot of jobs during the recession. Unlike the Portland region, which is driving the statewide jobs recovery, Oregon’s rural areas and smaller metro areas have continued to see net job losses.

The challenge of slower job growth in Oregon’s rural areas isn’t likely to end soon. In fact, employment projections for the 10-year period between 2010 and 2020 show generally slower growth for rural regions than for metropolitan regions (Table 1). Each of the six workforce regions with the fastest projected employment growth include a metro area, while the five regions with the slowest projected rates of employment growth are comprised entirely of non-metro counties.

 

Table 1
Slower Job Growth Projected for Oregon’s Rural Workforce Regions, 2010-2020
Percent
Counties 2010 2020 Change Change
Clackamas 139,140 168,270 29,130 21%
Multnomah and Washington 667,400 804,300 136,900 21%
Lane 141,100 166,700 25,600 18%
Crook, Deschutes, and Jefferson 72,160 84,660 12,500 17%
Marion, Polk, and Yamhill 185,100 215,300 30,200 16%
Benton, Lincoln, and Linn 97,670 113,580 15,910 16%
Douglas 34,680 40,220 5,540 16%
Gilliam, Hood River, Sherman, Wasco, and Wheeler 26,000 29,840 3,840 15%
Clatsop, Columbia, and Tillamook 35,580 40,800 5,220 15%
Jackson and Josephine 99,610 113,960 14,350 14%
Morrow and Umatilla 34,510 39,140 4,630 13%
Klamath and Lake 24,670 27,830 3,160 13%
Baker, Union, and Wallowa 18,130 20,130 2,000 11%
Coos and Curry 27,910 30,880 2,970 11%
Grant, Harney, and Malheur 18,010 19,640 1,630 9%
Graph 2

Job growth in the Portland area and other metro counties combined

Younger Workers Leaving Rural Areas

The slow job growth in rural counties leaves fewer opportunities for the unemployed and for younger workers getting started on their career paths. Young workers everywhere were damaged by the recession, but the youth population itself was damaged in many rural areas.

Between 2000 and 2010, the number of young Oregonians between the ages of 15 and 24 grew 8 percent statewide. At the same time, the number of people in that age group actually declined in 14 Oregon counties, all of which were rural. Two rural counties experienced the greatest declines: Grant County lost 22 percent of its young people and Wallowa County lost 21 percent. The decline also reached double digits in Sherman (17%), Wheeler (16%), Gilliam (16%), and Crook (12%) counties. Fewer job opportunities explain part of this shift, but the aging population of rural areas also leaves fewer families with children in that age group.

 

Rural Workforce is Older and Heading to Retirement

The population of Oregon’s rural counties tends to be older than the population of metro areas. The statewide median age is 38 (one-half of all Oregonians are 38 years or older) while the median age is over 50 in six rural counties – Curry, Gilliam, Grant, Lincoln, Wallowa, and Wheeler counties.

The older population of rural counties means their workforces are also older. Statewide, 22 percent of workers in Oregon were 55 years old or older in 2011. In 14 of Oregon’s 25 non-metropolitan counties, at least 25 percent were 55 or older (Table 2). The oldest example is Wheeler County, where one in three workers is at least 55.

Although people are working far longer than they have in previous generations, it’s probably safe to assume that most workers would like to retire eventually. It could be a challenge to keep the same level of economic activity going unless rural counties can attract new workers.

 

Table 2
Rural Counties Have Higher Shares of Workers 55 and Over
Area Number of Workers 55 and Over Percent of All Ages Area Number of Workers 55 and Over Percent of All Ages
Oregon 340,514 22%
Wheeler 88 33% Sherman 139 24%
Lincoln 4,553 29% Linn 9,043 23%
Curry 1,690 29% Klamath 4,848 23%
Grant 554 29% Benton 7,858 23%
Wallowa 724 29% Lane 31,430 23%
Lake 538 28% Jackson 17,458 23%
Gilliam 209 27% Marion 29,928 23%
Coos 5,368 27% Columbia 2,052 23%
Harney 525 26% Hood River 2,649 23%
Tillamook 2,073 26% Union 2,191 22%
Clatsop 3,760 26% Yamhill 6,537 22%
Morrow 948 25% Polk 3,716 22%
Wasco 2,220 25% Malheur 3,045 22%
Douglas 7,989 25% Umatilla 6,318 22%
Jefferson 1,421 24% Clackamas 29,675 21%
Crook 1,264 24% Multnomah 87,122 20%
Josephine 5,215 24% Deschutes 11,406 20%
Baker 1,251 24% Washington 44,709 18%
Quarterly average employment for 2011.
Source: U.S. Census Bureau, Local Employment Dynamics
Challenges More Severe in Rural Areas

The majority of projected job openings in all areas of the state between 2010 and 2020 will be due to retirements. If trends continue as they have over the long term – older workers retire and young people leave – Oregon’s rural counties could have trouble finding enough replacement workers, and businesses in these areas could face increased difficulty in finding skilled workers.

All areas of Oregon face several common workforce challenges, including high unemployment rates, slow job growth, and an aging workforce. These challenges are even more severe and more pressing for rural areas. Addressing the workforce needs of rural areas in a time of recovery in the metro areas continues to be one of Oregon’s key workforce challenges.

  
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