Posted by: Josh Lehner | April 19, 2016

Oregon’s Total Employment Gap, March 2016

Last week’s employment report brought continued good news regarding Oregon’s labor market. The most commonly reported figure was an all-time record low unemployment rate in the state’s history. Or at least back to the 1970s when the good data begins. The only time period in Oregon’s history where our unemployment rate has been below 5% was a brief 11 month stretch in 1994-1995. That is until 2016, at least based on the initial data. Regardless of where revisions will take the data, we know Oregon’s labor market is doing quite well.

The combination of Oregon’s ongoing economic strength and dwindling, but still existent, skepticism about the data, I just wanted to take the opportunity to update our Total Employment Gap measure of the state. We first released this measure back at the beginning of 2015. The biggest benefit of this measure is it takes into account many of the common criticisms of the unemployment rate itself. The Total Employment Gap includes those working part-time but want full-time work, and it takes into account individuals who gave up looking for a job during or following the Great Recession. All told, Oregon’s Total Employment Gap is closing quickly. Currently, at around 1%, it is as small as the state has experienced since the dotcom bust back in 2001.


The graphs below show each of the three individual components and their evolution over the past 15-20 years. A note about each:

  • If you are wondering how the unemployment gap can be negative, it is because the current unemployment rate is below the estimate of the natural rate of unemployment in the state. This, of course, is a rough gauge but we adjust the Congressional Budget Office’s national figure to create an Oregon version based on historical patterns.
  • Underemployment in Oregon is back to pre-Great Recession levels and rates. Both the number of and share of the workforce that is working part-time but want full-time work is back to the same numbers seen in 2005-2007.
  • The Particiaption Gap is closing. While the LFPR has rebounded strongly in recent months, it remains the largest component here. The trends are improving and the economy is pulling workers into the labor force. Yet participation remains considerably lower today than the aging demographics alone suggest.



When you add each of these components together, you get a better or more clear picture of the labor market. It is true that the standard unemployment rate today has lost some meaning (not all, but some) given the severity of the Great Recession and its impact on the participation rate. That is why our office uses the Total Employment Gap to gauge the strength of Oregon’s labor market. The fact that the good employment numbers are translating into stronger wages too is very encouraging.


  1. […] the state’s “Total Employment Gap” is closing quickly and currently stands at about 1%, the smallest since the dotcom bubble burst in […]

  2. […] is nearing full employment, a milestone not seen since 2000. According to our office’s Total Employment Gap, the one remaining part that is not fully healed is the participation gap. This measures the […]

  3. […] more job opportunities — employment growth continues to outpace population growth. Second wages rise as businesses must compete on price to attract and retain the best workers in a tighter labor […]

  4. […] hard calculation. That doesn’t mean we don’t try. That is the entire purpose behind our Total Employment Gap work. Another, simpler and easier-to-understand way to gauge economic slack is to look at the […]

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