Posted by: Josh Lehner | April 24, 2018

Economic Disparities: Geographic, Racial and Ethnic

One of the key talking points our office has been using in recent years is that the economic recovery and expansion is now reaching all corners of the economy. Every region in the state is adding jobs, poverty rates are dropping for all groups, and incomes are rising at all points in the distribution. This doesn’t mean everyone has shared equally, of course. Many economic disparities remain, even as we have turned the corner on all fronts. In presentations, we’d then show a chart or two along these lines.

After a recent presentation, I was asked more about the racial and ethnic trends seen in the data. This equity lens is one our office does not discuss as frequently, at least in part due to our office’s role, in part due to our oversight and in part due to data availability. The CPS, or the monthly household survey, does not really have a big enough sample size here in Oregon to extract (un)employment trends for different racial or ethnic groups in real time, and the CES, or the monthly employer survey, does not contain any information on worker characteristics, just employment by industry. So, I turned to the Census data to compile the following looks at employment rates and household incomes for different racial and ethnic groups here in Oregon. Before 2000, a respondent had to choose a single race or ethnic group. Since 2000, a respondent can choose multiple races or ethnicities. In this analysis, I am using the inclusive definition, where someone saying they are bi-racial is included in the data work for each of the two (or more) races filled out on the Census/ACS survey.

First, let’s take a look at the employment rate for prime working-age Oregonians, or those between the ages of 25 and 54 years old. This calculations shows the share of folks who have a job, and gets away from the unemployment rate or labor force participation rate questions about whether or not someone is actively looking for a job. The first set of charts below shows that for the most part, employment rates for different racial or ethnic groups in Oregon have recovered to where they were prior to the Great Recession, at least through 2016 which is the latest available Census data. Disparities remain, as employment rates for Black Oregonians and American Indian or Alaska Native Oregonians are sizably lower than for the other racial or ethnic groups. However these employment differences do not appear to be widening over the business cycle. Note that the noisy year-to-year movements are more likely about sample size issues for Oregon’s various racial and ethnic groups, than about true economic shifts. That said, the big picture trends are clear and I would focus on those.

In terms of median household incomes, there is a wider range of outcomes than just focusing on employment for prime working-age Oregonians. Here, too, you can see the income disparities across Oregon’s racial and ethnic groups. When it comes to decomposing these disparities, the literature finds that differences in employment rates, educational attainment, employment in different types of occupations, and household composition (number of family members, number of earners, etc) explain much of the differences. However they do not explain all of the differences. Just as it is true with the gender wage gap, there remains an “unmeasurable” component to these income disparities. This “unmeasurable” component is evident in the data and is commonly used to gauge outright discrimination.

Beyond differences seen among Oregon’s racial and ethnic groups, there are other types of economic disparities as well. One type is geographic disparities within a regional economy. When our office looks around the state we tend to focus on a single county, but more commonly on groups of counties. This, of course, masks ground level, or neighborhood level trends and issues. In recent years, Employment’s Christian Kaylor has been using variations of the chart below to discuss income and inequality within the Portland region. Christian has done very interesting, enlightening, and depressing work along these lines. I am borrowing/stealing his concept to show regional disparities for household incomes on the City of Portland’s westside — everything west of the Willamette River — and in East Portland — basically everything east of 82nd but including the airport and surrounding industrial land. When you layer on multiple issues like housing affordability, displacement, job polarization and the like, you can end up with situations like the following where there has been no real income gains in some neighborhoods within an otherwise thriving regional economy.

Unfortunately these geographic disparities are not limited to the City of Portland as we all know. This was one issue that recently came up regarding the Opportunity Zones that came out of the federal tax reform. Business Oregon put together a really good interactive map showing which part of Oregon qualified for such a designation. As seen in the screenshot below, these potential Opportunity Zones are everywhere, including both rural and urban parts of the data. Furthermore, DHS regularly tracks so-called poverty hotspots which are census tracts with very high rates of poverty year-after-year.

Bottom Line: The economic recovery and expansion is reaching all corners of the Oregon economy. However many economic disparities remain. The gaps seen in employment and income for Oregon’s different racial and ethnic groups do not seem to be widening, but they are also not getting better. It’s a glass a quarter full vs three quarters empty situation. Geographic disparities on the other hand have widened this cycle both across and within regions of the state.


Responses

  1. […] Source: Economic Disparities: Geographic, Racial and Ethnic | Oregon Office of Economic Analysis […]

  2. […] toward the edges of the metro region, into east Multnomah County in particular. This is part of the increasing geographic disparities seen across the state. While the added housing supply in the urban core is now holding down rents […]

  3. […] Geographic disparities [Slide 10] […]


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