Posted by: Josh Lehner | April 22, 2014

Hours Worked in Oregon

While the state is getting there in terms of the total number of jobs, increased attention is being paid to the other measures of the labor market — e.g. see the spider chart. While jobs are very important, hours worked and wages obviously are as well. The typical pattern is that during a recession businesses lay off workers but also work the remaining employees fewer hours due to slack business conditions. In recovery, as sales and demand picks up, firms begin working employees more hours before hiring additional workers. For this reason it is important to also focus on the total number of hours worked in the economy, not just employment counts.

The first graph below illustrates the decline in total hours worked during the recession and then were each metropolitan area in the state is today (well, the past 12 months) relative to pre-recession peaks. Note: This is the same methodology and graphing style used previously to highlight trends by region and by industry across the state. 

MetroHoursWorked0314

A few items stand out. First, the state lost about 8.5 percent of its jobs during the recession, however total hours worked fell further, to nearly 12.5 percent. Today, jobs are about 2 percent below pre-recession peaks but hours worked remain about 4 percent below. This implies that both the average work week and number of jobs have improved but the jobs account for the majority of the improvement (see graph below).

Additionally, the Portland MSA recently returned to peak in terms of jobs, but it likewise has as well in terms of total hours worked. This means the average work week is all the way back, as are the number of jobs. One surprising finding in this work is Medford. As part of the epicenter of the housing bust, Medford lost nearly 12 percent of its jobs but the average work week pretty much held steady. So far in recovery Medford remains about 8 percent below in terms of jobs but just 2.5 percent below in total hours worked, due to the average work week continuing to increase.

Each metro in the state has its own pattern of recession and recovery, however impacting all areas is the changing nature of the industry mix. Manufacturing and financial activities both have above average work weeks compared to the total and these industries experienced much more severe recessions and slower recoveries thus far. One concern is that the economy is replacing these types of jobs with part-time, generally low-wage service jobs. As our office has shown — see job polarization and part-time employment — that while these trends are a part of the story, they are not the majority of it. Likewise the data presented here, also shows that aggregate hours worked is improving and in a place like Portland, it is all the way back, right alongside the number of jobs.

The second graph decomposes the improvement in total hours worked to show how much of the gains are due to a longer work week and how much are due to more jobs overall. This is slightly different from above in the sense that the first graph allows the peaks and troughs to vary across areas, given that local business cycles are not perfectly in sync. This graphs, however, shows the improvement in just the past 4 years and fixes the start and end dates.

HrsImprovement0314


Responses

  1. Random methodology question:

    How did you calculate the above values for nonmetro areas through March of 2014, given that part of the Portland MSA is in Washington state? For North Carolina, which also has its largest metro area on a state border, I’ve not been able to find CES data (or its equivalent) for nonmetro areas or for in-state-only portions of metro areas. I could use QCEW data, but I only have it through September 2013. Thanks in advance!


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