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Oregon job seekers have found more employers willing to hire at events such as this September jobs fair, but low-paying jobs are reappearing faster than positions that produce better paychecks.
(Randy Rasmussen/The Oregonian)
The latest Value of Jobs report, part of an ongoing series commissioned by various Oregon business groups, was well-timed. As business leaders rolled it out this week, the state issued its November jobs statistics showing the biggest monthly jump in employment since at least 1990.
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Editorial Agenda 2014
More jobs for Oregon
The Oregon Employment Department reported that November's seasonally adjusted payroll employment of 1,740,800 exceeded the pre-recession peak reached in December 2007 by 3,000. Likewise, the Value of Jobs "economic checkup" has a collection of positive economic numbers that show job growth above the U.S. metro average. But it also contains some sobering comparisons that should temper celebrations over the November employment report.
In short, Oregon is better at creating jobs than it is at creating paychecks – or at least healthy paychecks. And one of the most common prescriptions for lagging pay – an increase in the minimum wage – is unlikely to fix Oregon's core problem.
The Value of Jobs checkup shows that workers on the lower end of the wage scale actually fare better in Portland than in most metro areas. Per capita income here lags the nation and several large metro areas that Portland aspires to match because those at the higher end of the pay scale lag their counterparts elsewhere.
A 2013 Value of Jobs report detailed various factors that influence the pay shortfall, including the types of graduates Portland attracts and comparatively low pay in some high-end professions. Lawyers in the Portland metro area make $42,218 a year less than their counterparts in other U.S. metro areas, for example. And college graduates in Portland are more likely to work part-time than those in other metro areas. As a result, the Portland metro area ranks 270th out of 284 U.S. metro areas in hours worked by 25- to 39-year-old white, college-educated males – a prime demographic for income growth.
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Low incomes are compounded by living costs that, though lower than in other major West Coast cities, still are above the U.S. average. Add the two trends together and, not surprisingly, Oregon ranks in sixth in the nation in the ratio of household debt to income – a staggering 93 percent. Oregon is right at the national average for credit-card and auto-loan debt, but above average for student loans and mortgages.
So, how can Oregon reverse this trend? It will take more than the wage-boosting proposal currently talked about the most. Though an increase in the minimum wage indisputably would put more money in the pockets of low-wage workers who kept their jobs and continued to work the same number of hours, those workers already are earning above the national average compared with counterparts in similar jobs. In fact, a Brookings Institution study released in June showed that Oregon's minimum wage of $9.10 is close to the optimal level – weighing factors such as median income, cost of living and potential job loss – especially compared with most other states.
Significantly improving Oregonian's debt/income ratio will require concerted effort in at least four areas: creating more family-wage jobs, spreading those jobs to all parts of the state, making it possible for Oregonians to train for those jobs without incurring crippling debt levels and increasing the supply of affordable housing.
The Legislature appears to have an appetite for improving career and technical education. And Business Oregon, the state's economic development agency, has prepared a framework for addressing regional employment issues. But, with the economy improving, it will require discipline for legislators to stay focused on job creation and to make sure education and training dollars get distributed to the schools and programs most likely to catapult students into well-paying jobs. Let's hope they pass the test.
--The Oregonian editorial board