Workforce Challenges are More Severe for Rural Oregon

Oregon's job situation has improved in recent months as more people are finding work. The recovery has been far from ideal, however.We have profiled several of Oregon's workforce challenges at the statewide level, but many of these issues are more severe in rural Oregon.

Unemployment is Persistently Higher in Rural Oregon
Persistently high unemployment has long been a challenge for rural Oregon. Unemployment rates in non-metropolitan counties were already higher at the onset of the recession than they were in the metropolitan areas (MSAs), and that continues today. The non-metro unemployment rate was 10.3 percent in September 2012, 2.8 percentage points above the Portland area unemployment rate of 7.5 percent and 2.0 percentage points higher than the other combined metro areas' unemployment rate of 9.3 percent.

Structural Changes and Slow Job Growth Hit Rural Oregon Especially Hard
The most challenging economic structural change faced by rural Oregon has been the reduction in logging jobs, and the shift away from wood product manufacturing jobs. In 1979, roughly two of every three manufacturing jobs in rural Oregon belonged in wood product manufacturing. By 2010, wood products accounted for one out of three rural manufacturing jobs. The mix of Oregon's manufacturing jobs also shifted away from "traditional" manufacturing jobs in non-metro areas to manufacturing jobs in the metro areas, many of which require workers with completely different sets of skills. In 1979, Oregon's metropolitan areas - including counties that would become MSAs in later years - accounted for about seven out of every 10 manufacturing jobs. Now, about nine out of every 10 jobs in manufacturing is in a metropolitan area.

Structural change and the recession, among other factors, have worsened the problem of slow job growth in rural Oregon. The state's non-metro counties experienced far slower employment growth than their metropolitan counterparts over the past two decades. In recent years, rural Oregon, like all areas, lost a lot of jobs during the recession. But unlike the Portland region, which is driving the statewide jobs recovery, Oregon's rural areas and smaller metro areas have continued to see net job losses.

Younger Workers Leaving and Older Workers Heading to Retirement
Between 2000 and 2010, the number of young Oregonians between the ages of 15 and 24 grew 8 percent statewide. At the same time, the number of people in that age group actually declined in 14 Oregon counties, all of which were rural. Two rural counties experienced the greatest declines: Grant County lost 22 percent of its young people and Wallowa County lost 21 percent. The decline also reached double digits in Sherman (17%), Wheeler (16%), Gilliam (16%), and Crook (12%) counties. Fewer job opportunities explain part of this shift, but the aging population of rural areas also leaves fewer families with children in that age group.

The population of Oregon's rural counties tends to be older than the population of metro areas. The statewide median age is 38 (one-half of all Oregonians are 38 years or older) while the median age is over 50 in six rural counties - Curry, Gilliam, Grant, Lincoln, Wallowa, and Wheeler counties. Although people are working far longer than they have in previous generations, it's probably safe to assume that most workers would like to retire eventually. It could be a challenge to keep the same level of economic activity going unless rural counties can attract new workers.

Read more about the workforce challenges facing rural Oregon in the full article, co-authored by State Employment Economist Nick Beleiciks (Nick.J.Beleiciks@state.or.us) and me (Gail.K.Krumenauer@state.or.us). More information on Oregon's key workforce challenges is available in the full series of articles at QualityInfo.org.