By Josh Lehner
Oregon Office of Economic Analysis Blog
One of our state’s key economic features in recent years is that the robust job gains have also been joined by strong wage gains. Oregon’s average wage, while still below the national average, is at it’s highest relative point in a generation, or at it’s highest relative point since the mills closed in the 1980s. Oregon is showing signs of a deeper labor market recovery than in the typical state.
However, what is driving the wage gains? Is it due to actual wage increases for workers or is it simply the fact that via job polarization we’re adding a lot more high-wage jobs, thus the shifting industrial mix is pulling up the average?
The gains are entirely due to workers seeing increases and not the industrial mix shifting. I was surprised at the results as I figured it would be partially due to both. If anything, the industrial mix actually pulls down the statewide average just a hair. Below, the dark blue bars are actual average wages in 2007 and 2014. The light blue bars take the 2014 industrial structure and apply 2007 average wages, and take the 2007 industrial structure and apply 2014 average wages. You can see that the results are nearly identical to the dark blue bars, hence the conclusion that the industrial mix is having a negligible impact on wages.
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