Posted by: Josh Lehner | June 4, 2020

Economic Disparities, an Ongoing Discussion

The world is data rich these days. One of our office’s roles is to bring to life this data to better understand, and better explain what is happening. Not everything our office does is directly tied to the revenue forecast, even as it does further our understanding and ability to communicate with policymakers and the public. The key as a researcher is to always peel the onion. There are new layers to uncover and examine. Good analysis should always lead to more questions.

Our office tries to look beyond the headline economic data to see what it means in terms of the daily life of Oregonians. We typically analyze and think through the implications when it comes to different regions of the data, for workers in different industries or occupations, or by their level of educational attainment. In recent years we have taken a few steps — not a lot, but a few — to further explore the changes seen for different racial or ethnic groups in the state. We need to do better. We will do better and are working to incorporate a regular section in our forecast document that adds this additional lens through which to examine the latest socio-economic data.

The key is we know that economic gains do not accrue equally. There are some segments of our society that truly only benefit during tight labor markets and full employment. As the economy strengthened in recent years, we saw better job and income growth in rural Oregon, among those without a high school diploma, those with criminal records or self-reported disabilities, and certainly among our communities of color. Even with these gains, there remains large gaps, or disparities when it comes to socio-economic opportunities and outcomes.

Previously our office looked at household income and employment in addition to poverty rates for different racial and ethnic groups in Oregon. Below is an updated look at one of economists’ favorite metrics: prime-age EPOP. This is the share of prime working-age Oregonians (25-54 years old) who have a job. Even as the differences finally began to narrow some in recent years, it is quite clear there is a sizable, persistent gap over time.

A few notes. First, the way Census asked about and categorized residents by their race and ethnicity has changed over the decades, e.g. you used to be only able to choose one race, now you can choose multiple races or ethnicities.

Second, more historical data exists than is shown here, but Oregon’s black population was extremely small prior to WWII. For example, in the 1940 Census there were about 2,600 black Oregonians, of which 600 were prime working-age men. It is hard to draw many conclusions from the data given such a small population, even as you can draw conclusions about our state’s history.

Third, highlighting and exploring the data is one thing. However explaining the differences can be more difficult, or more uncomfortable to discuss. Now, there are some underlying reasons why these gaps or disparities emerge. Research finds that differences in individuals’ work experience, the occupations they enter into, and their level of educational attainment all drive some of the topline differences in employment, poverty, and income. However these factors never explain all of the differences. The portions unexplained by standard data in the models is generally considered to be due to harder to measure things like broader societal factors or outright discrimination. And these factors also drive some of the other data used to explain the differences to begin with.

Finally, as an example of peeling the onion, and some of the research our office will be incorporating into our forecast documents moving forward, the last couple of graphs dig a little bit into differences in educational attainment among black Oregonians and the statewide figures. As seen below, educational attainment is rising in recent decades for all Oregonians. These gains are relatively consistent across different racial or ethnic groups. However it is clear that black Oregonians earn college degrees at a lower rate than their statewide, mainly white non-Hispanic, peers.

So where does this gap come from? Well, it’s about 50/50 in terms of the share not graduating from high school, and the share that attends college but does not finish a degree. The share of the population with the other levels of educational attainment — a high school diploma, an Associate’s degree or an advanced degree — are all equal.

And of course the reasons this type of analysis and socio-economic outcomes matter is at least twofold. First, it matters in the everyday life of Oregonians in terms of how they live and work. Second, it also matters for future economic and revenue growth for the state. Our office focuses a lot on migration, industrial structure, different forms of capital and productivity, because those all drive future economic gains. Being able to talk through the implications and differences across the state geographically, for different industries and occupations, and for different segments of the population is important. So stay tuned for more consistent research from our office along these lines, where we continue to peel the onion in hopes of better understanding the Oregon economy.

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