Challenges Facing Rural Oregon

More than 83 percent of Oregon’s population is concentrated in the state’s eight metropolitan statistical areas. Rural cities and towns stand as islands of development surrounded by a sea of forest, farms, and rangeland. This distinct urban/ rural divide is in a large part due to Oregon’s strict land use planning laws, which encourage density in urban settings over suburban sprawl into rural communities. Oregon’s rapid job growth has received significant attention as employment growth ranked second fastest in the United States over the past year. Much of the current economic expansion is being driven by job growth in the state’s major urban centers, while rural Oregon continues its long and slow recovery from the devastating recession. Why is the pace of recovery so much slower in rural Oregon? What economic challenges do rural Oregonians face?

An Uneven Recovery

Oregon has been in a period of economic expansion since October of 2014 when total nonfarm employment levels exceeded the pre-recession peak. It was a long recession and slow recovery, taking six and a half years to add back all the lost jobs. However, in rural Oregon the recovery is ongoing. Today, employment levels remain 3.2 percent below the pre-recession peak in rural counties, while employment levels in urban counties are 6.6 percent above the pre-recession peak. In order to recover from the recession, rural counties would need to add nearly 8,000 additional jobs, which would take another year and a half at the current pace of job growth.

Demographics

One of the largest challenges faced by rural economies is the overwhelming demographic trends that are leading to rapid aging in these communities. Natural population growth is low, in-migration is slow, and young people often leave rural communities to seek educational or employment opportunities in urban centers.

Oregon’s rural communities are growing, just at a much slower pace than in urban centers. According to Portland State University, rural counties added nearly 13,000 new residents between 2010 and 2015 (+1.9%), whereas urban counties expanded by 4.9 percent over the same period.

To learn more about the economic recovery, demographics, infrastructure and industry composition in rural Oregon, read the full article "Challenges Facing Rural Oregon" by Regional Economist Damon Runberg.