Oregon Office of Economic Analysis

One economic bright spot during this cycle has been the strong, inclusive recovery. This goes for income and employment trends by educational attainment, gender, geographic location, and race and ethnicity. This does not mean that equity abounds. We know that large, historical disparities remain. What I mean by an inclusive recovery is that these disparities did not widen, and in some cases they have actually declined somewhat in recent years. Further efforts and progress are needed to achieve equity as many disparities remain. However, the fact that these did not widen during the pandemic is certainly a glass half full, if not a bit more.

Data housekeeping note: The traditional real-time economic data for Oregon generally has too small of sample sizes to truly get at economic trends by race and ethnicity. We generally have to wait for the annual American Community Survey data to be published by Census, and then wait until the underlying microdata is released to go in and crunch the numbers ourselves. ACS data comes out with nearly a full year lag. For example the 2021 ACS data was just released recently, and this post uses that new information.

In order to not bury the lede I am pulling out this first chat looking at median household incomes in Oregon for Black, American Indian and Alaska Native, and Hispanic or Latino households relative to their white, non-Hispanic neighbors. I’ll get into the caveats in a minute, but frankly this is a really encouraging chart.

We know that the racial poverty gap has been narrowing in the past decade. That is tremendous news in that fewer of our friends, family, and neighbors are living below the federal poverty threshold. But to be honest, for much of the past decade we didn’t exactly see the improvements in poverty translate into higher incomes further up the distribution for many Black, Indigenous and People of Color in the state. It was as if we saw a shift of those living just below poverty to living just above poverty. An improvement is still an improvement, but it still meant many of our neighbors, and particularly our BIPOC neighbors, were and are struggling.

But what the new data shows is that the income gaps across different races and ethnicities in Oregon appears to be narrowing as well. Median incomes, of those for the typical Black, Indigenous, and Hispanic household still lag behind their white, and Asian peers, but the gap has narrowed in recent years. What used to be gaps of 20-40% now appear to be more like 10-20%. Sizable, yes. But smaller than anything in the past 20 years.

Now for the caveats. While we see some upward trends in recent years, especially for our Hispanic and Latino neighbors, we are mostly talking about one year of data. And it is 2021 data at that, a year still greatly impacted by the pandemic. Keep in mind that Census did not publish official 2020 ACS data due to the low response rate. I have omitted even the 2020 “experimental estimates” as they call them here and trended out the differences between 2019 and 2021, hence the dotted lines. There is a chance that the improvements seen in the chart above are more about data quality or a funky pandemic year. I don’t know that for sure. I am not calling into question the Census Bureau. But I do have my data spidey senses up and am wondering about it. I really do look forward to the 2022 and 2023 data to confirm that these gains are sustained.

The next set of charts looks at the 21 year trend for inflation-adjusted median incomes by race and ethnicity in the state. Here you can see these differences over time. Some of the volatility, particularly among our Pacific Islander neighbors, is likely due to sample sizes, but broadly speaking the trends are clear.

Next we turn to employment trends in Oregon by race and ethnicity. We are focusing on the employment rate for prime working-age Oregonians, or those between the ages of 25 and 54 years old. This calculation shows the share of folks with 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. Now, here I am including those 2020 experimental estimates as I think they do make a bit more sense when examining the employment data, but the focus should be on the larger trends, and the changes from 2019 to 2021 specifically.

The big picture summary here is that many of these employment rate differences held steady. Comparing employment rates in 2019 to 2021 by race and ethnicity to the economy overall finds that the differences for white, non-Hispanic, Hispanic or Latino, and American Indian or Alaska Natives is the same. The employment differences saw improvements for Asian and Black Oregonians, again, relative to the overall employment rate. And the differences worsened somewhat for Pacific Islanders, dropping from just above to just below the overall prime-age EPOP for the state.

While there are clear historical disparities, I could not find where these disparities widened noticeably during the pandemic. Now, just as with the income data, I very much look forward to seeing the 2022 and 2023 numbers and updating our look at Oregon.

Finally, 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.

As just one example, but one that is large enough to be seen in Census data, let’s take a look at institutionalized prime working-age men in Oregon. Overall prime-age Black men in Oregon have an employment rate that is 8.6 percent lower than all prime-age men in the state. One key factor here is the larger share of prime-age Black Oregon men who do not live on their own but in so-called group quarters, and specifically in institutional group quarters like correctional, mental, or for the elderly, handicapped, or poor. This accounts for 1 in 20 prime-age Black men in the state, and means that is 1 in 20 that are not living or working in the broader society. And while factors such as this do not explain the entire employment rate difference, mathematically it does account for 3.2 of the 8.6 percentage point difference. And this also highlights one reason why policies aimed at improving labor market outcomes for those with criminal records also matter, and how that impacts these bigger picture disparities seen in the data.