Rising Craigslist Ad Costs Cause Help Wanted Online Index to Drop

Online advertisements for jobs fell by 22 percent in Oregon between February 2016 and February 2017, according to The Conference Board Help Wanted OnLine data series (HWOL). Job ads also declined across the nation, but at a lower rate of 15.7 percent. Recent drops in the number of online job ads do not fully reflect changes in labor demand. Oregon’s job ad decline follows a steady decline in the unemployment rate and steady job gains during the year. The unemployment rate dropped to 4.0 percent in February 2017 and total nonfarm employment grew by 2.2 percent (39,900 jobs) over the prior 12 months.

Labor economists noticed that the price increases for online job ads had distorted the recent HWOL data. Job ads posted through Craigslist are a major source of online job ads picked up by HWOL. For many years, Craigslist charged a fee for posting job ads only in major cities, including the Portland metro area where the cost of a job ad was $25. In October 2015, the cost of posting job ads increased in major cities; the cost in Portland rose to $35. The number of HWOL ads, which had been stable in the prior year, started drifting downwards after the price increase.

From December 2015 to December 2016, Craigslist expanded their practice of charging fees to all areas in the United States. The cost for posting job ads varies by area. The minimum cost is $7 per job ad (up from free) in the Eastern Oregon, Coastal Oregon, Roseburg, and Klamath Falls areas. In Bend, Corvallis, Albany, Medford, and Ashland the cost is $10 per ad and in the Salem and Eugene metro areas the cost is $15 per ad. The recent price increase caused another noticeable drop in the number of HWOL ads. Almost all Oregon counties and metro areas saw declines in job ads over the year. Among metro areas, the largest declines occurred in Medford (-29.3%), Corvallis (-28.3%), and Grants Pass (-25.9%).

For more information, read the full article "Rising Craigslist Ad Costs Cause Help Wanted Online Index to Drop" written by Economist Felicia Bechtoldt.