Posted by: Josh Lehner | October 24, 2013

Report: Job Polarization in Oregon

The following is a brief overview of our office’s new research report: Job Polarization in Oregon. There are many interesting details and nuggets of information in the report, and we highly encourage you to read the whole thing to learn more about how job polarization is impacting the economy.

Click Here to Download the Report

Click Here to Download the Slides

Job polarization — the process of shrinking opportunities for middle-wage jobs, with growth concentrated at the high and low ends of the spectrum — has been shaping the national and local labor market for decades. Since 1980, Oregon has polarized in-line with the average state, however we have done a little bit better in terms of high-wage jobs and lower middle-wage jobs.

Polarization19802010

In particular, Oregon’s employment growth, and job polarization, has varied considerably by decade. The early 1980s recession, which was very severe locally, impacted growth during that decade, along with the absolute and relative decline of the timber industry in the state in the past 30 years. In the 1990s, growth across the board was strong and Oregon was able to stem the polarization tide. However in the 2000s, middle-wage jobs suffered more than in most other states, with growth heavily concentrated at the high and low ends. As shown previously, employment growth during and after the Great Recession has exacerbated the job polarization trends and nearly all job growth in the past two years has been either high- or low-wage. Please see the report for a more complete discussion on these patterns.

Another important aspect to job polarization in Oregon has been the relative changes in the state’s metropolitan areas compared with the rest of the state. Overall job polarization has been more pronounced in Metro Oregon since 2000. However, nearly all of the high-wage job gains have occurred in Metro Oregon as well. Rural Oregon has seen the loss of many middle-wage jobs over the past 12 years, with employment growth heavily concentrated in low-wage occupations.

PolarizationMetro

What can be done about polarization? The first answer one hears is usually: education, education, education. And that’s right to a certain degree. Overall there is a high correlation between educational attainment and wages, however it is not a perfect one. As seen below there is considerable variation in wages among similar educational groups but also considerable variation in educational attainment among similar wage groups. For example, Teachers and Construction workers get paid approximately the same even though they have substantially different formal education requirements. Additionally, Management — the highest paid — has the lowest educational attainment of the high-wage occupations.

PolarizationOccWages

Earning a four year degree is the most likely path to obtaining a job in one of the high paying occupations. However a college degree is not be-all and end-all, particularly for the upper middle-wage jobs. There are also differences between high school degrees and some college education for the lower middle and low-wage jobs. See the report for a discussion on the implications for each type of job, what is the underlying economic driver for these different wage groups, the impacts of job polarization on them and also what it means going forward.

Finally, it is important to remember that these labor market transformations are not costless. The process of job polarization does displace workers. Although the remaining workers are more productive, those most impacted face a tough transition to obtaining another job, particularly if it requires retraining in a new field. A microcosm of the negative side effects of job polarization is the RV industry in Oregon. Based on research by the Oregon Employment Department, and discussed previously on the blog, workers who were able to find another job in Oregon after leaving the RV industry, faced a considerable downward shift in wages. These events, where a worker loses a middle-wage job and replaces it with low-wage work is the bad type of polarization.

PolarizationRV

Much more information and a more complete discussion of these trends can be found in the report.

Click Here to Download the Report

Click Here to Download the Slides


Responses

  1. […] Our Job Polarization in Oregon report focused on trends at the state level and had some discussion on the urban-rural split in job growth, however these processes can be experienced and observed even down to the neighborhood level. Examining such changes — polarization, economic sorting, integration/segregation — is very interesting and with another year or two of ACS data, we can get good numbers locally as well to compare pre-recession and post-recession trends. This also has been shown to have big implications for economic mobility, as discussed previously. In the future, we hope to work on producing such maps once more data becomes available. […]

  2. […] not all of this education and training necessarily has to be in the classroom, as discussed in our Job Polarization in Oregon report. Many of the upper middle-wage jobs (construction, installation, maintenance and repair, […]

  3. […] than the state overall. Plus a lower relative share of low-wage jobs. These trends are part of the overall job polarization process, part of which is the creation of high-wage jobs predominately in metropolitan areas. While no […]

  4. […] varies across occupations as well, so just as job polarization impacts employment and economic growth, it likewise has an impact on patterns of consumer spending, which does include […]

  5. […] New occupational data for 2013 was just released by the Bureau of Labor Statistics. Overall 2013 was not only stronger than previous years, since we already knew job growth accelerated, but the pattern of growth across occupations was also more encouraging.  Below is an update on job polarization in Oregon, following the same methodology and sources as our research report last year. […]

  6. […] official unemployment rate, with good reason. Hours worked were cut, the job ladder is/was broken, job polarization pushes some into underemployment and the like. Besides, the unemployment rate can go up for good […]

  7. […] when looking at the occupations by wage group, the pattern of job polarization is also apparent. In the first graph, the high-wage (green) occupations are generally easy to fill […]

  8. […] discussions on the economy revolve around employment (industries, job polarization, etc) or the unemployment rate (with some discussion on short- vs long-term unemployed) but rarely […]

  9. […] jobs that pay enough to cover even a scaled-down version of the middle-class purchase list. A report by the Oregon Office of Economic Analysis last year detailed the decline of middle-class jobs, especially traditional blue-collar jobs. Those […]

  10. […] one important aspect are wages. As discussed in our office job polarization report last fall, not only have wood product jobs, and the forest sector more broadly, fallen by half to […]

  11. […] economy and our office tries to provide the full picture when available. For example, our work on job polarization showed that the economy was not just adding low-wage jobs, but also lots of high-wage ones as well. […]


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