This week, we released the sixth annual Value of Jobs Economic Check-Up in partnership with the Value of Jobs Coalition. The report looks at Portland-metro’s economic performance in 2015 and shows that we’re repeating some key trends seen in our region’s economic history; trends that follow recessions and upswings. In short, we’re seeing a landscape similar to 2014 showing strengths in job growth, productivity and exports. Portland-metro’s median household income (MHI) even outpaces the national average as well as some U.S. metro areas with whom we compare ourselves. Yet, incomes continue to grow slowly. Portland-metro’s median household income only increased $120 between 2013 and 2014. Individual per capita income has grown a paltry $740 since 2000. Contrasted with our much more rapidly rising cost of living, it’s clear that our region continues to become more unaffordable for many working families.
But let’s start by diving into the good news. Portland-metro’s job growth is experiencing a faster rebound from recessionary job losses than most metro regions across the country. The region added 35,800 new jobs between September 2014 and September 2015, and has now added a total of 70,700 net new jobs since 2007, which was our peak employment before the recession. We’re seeing this growth in local and traded sectors, both of which are important to a healthy regional economy. As we all know, our core mission at the Alliance is to grow private-sector jobs in the region, so as a general trend, we welcome this news – especially given our rapid population growth.
Two other areas where Portland-metro’s economy shines are in productivity and exports, driven largely by our very strong electronics industry, specifically the impact of semiconductor manufacturing, otherwise known as “the Intel effect.” Portland-metro continues to outpace the nation in Gross Metropolitan Product (GMP), landing ninth in the nation for year over year growth in 2015. Additionally, Portland-metro is a national leader in manufacturing as a percentage of overall exports, with 75 percent of Portland-metro’s exports attributed to manufacturing compared to 60 percent nationally. This last point underscores two things – the importance of manufacturing to jobs in our region and the critical role international trade continues to play in the overall economy.
Yet despite this good news, we’re still seeing concerning trends related to incomes and affordability, and so once again, we looked at the types of jobs that are growing here. Since we began these reports in 2010, a persistent concern has been our lagging income growth, especially for middle-income workers. It is troubling to see that incomes have still not rebounded even though the number of jobs has bounced back. Portland-metro’s per capita income trails the national average by $1,821, while median household income outpaces the national average by $3,700 but lags– Seattle, Denver and Minneapolis – which are our aspirational comparative regions. In fact, since 2010 the gaps between Portland’s household income and those of our aspirational regions have only grown wider.
Both of these measurements are important indicators of how Portlanders are faring in the economy. What these latest statistics shows us is that we need to focus on creating more job opportunities that offer better incomes, specifically middle-income jobs that another recent Value of Jobs report revealed have been in decline for three decades
The area that I found the most interesting, and concerning, is where we look at the types of jobs offered in the region and what that means for prosperity. Again, the results look great at first. Portland-metro’s labor force participation outpaces the national average across most age ranges, particularly for those in prime income earning years. However, when we consider only full-time and full-year employees, Portland underperforms the U.S. metro average at every age range. This means Portlanders are working, but a disproportionate number are in part-time jobs that are less likely to offer good wages and benefits. This has negative implications for the region’s economy, because lagging incomes make it much harder for individuals and families to save for retirement, purchase a home, put kids through college or just make ends meet.
So, what do we need to do? We need to focus not just on job growth, but ensuring good jobs for everyone. We also need to address the affordability issue, which is increasingly becoming more challenging for Portland families as a result of slow income growth, rapidly rising housing prices and cost of living increases. If we want Portland to be a place where middle-income families can prosper, we need to address some of the issues raised in this report. It is our hope we can work with you, our members, leaders and decision makers to grow good jobs, raise incomes and increase affordability.
Please take the time to read the full report at www.valueofjobs.com.
Oregon Senator Ron Wyden is a key negotiator on both pieces of legislation, which also have President Obama’s strong backing. I’d like to offer a perspective on why the TPA and TPP are essential for the economic prosperity and vitality of our state, and even important to small businesses like mine, which you wouldn’t typically think are connected to trade.
But first, the background.
Renewal of the TPA must come first. Created by Congress in 1974, Trade Promotion Authority is power granted by Congress to the president to negotiate and sign trade pacts such as the Trans-Pacific Partnership. The TPA expired in 2007 and must be renewed.
The TPP — Trans-Pacific Partnership — is a proposed trade agreement among the United States, Canada, Japan, Australia, Malaysia, Darussalam, New Zealand, Chile, Peru, Mexico, Singapore, Vietnam and Brunei, a list that includes eight of Oregon’s 12 largest export destinations. The TPP has the potential to greatly expand Oregon’s trade with new markets, reaching new customers, primarily in Asia. As President Obama recently stated, 95 percent of the world’s consumers live outside the U.S. That makes global trade legislation something we cannot afford to postpone if Oregon is to stake a competitive claim in a rapidly evolving marketplace.
Trade is a regional strength. In 2014, Oregon exported $21 billion in products to markets in every corner of the world. Our workers and farmers produce the most sophisticated, sought-after and high-quality products available, and it is a source of pride that our small state plays such an outsized role in driving our nation’s exports. According to public opinion research conducted by DHM Research for the Portland Business Alliance, 90 percent of voters surveyed in the Portland region felt it important for Oregon’s elected leaders to support the development of international trade. In addition, 62 percent said increasing the promotion of Oregon products abroad to open up and expand markets should be prioritized.
That voter support for trade exists for good reason. Trade brings revenue and family-wage jobs to businesses of all sizes and sectors. In fact, according to the Alliance’s Value of Jobs reports on trade, about 90 percent of Oregon exporters are small- to medium-sized businesses. Plus almost half a million jobs in the state are tied directly or indirectly to trade, and trade-related jobs, on average, pay nearly 20 percent more than those not connected to trade.
It also seems to me that trade should play a key role in our equity agenda. Many of our key trade-related industries are manufacturers, and we know that manufacturing jobs, on average, pay more than non-manufacturing jobs. In fact, a Value of Jobs look at manufacturing found that people of color and people who don’t speak English at home earn 50 percent more in manufacturing jobs — and those jobs frequently provide a path out of poverty for less advantaged families. So if we are serious about pursuing an equity agenda in this region, promoting trade has to be part of it.
The ripple effect across the economy is significant. Trade-based companies rely on local service providers like contractors and suppliers, and their workers buy houses and cars, and shop and eat in local establishments. And sometimes they remodel, which is where my business, InterWorks, LLC, comes in. I know that a lot of my customers work for companies that are directly related to trade. If they didn’t have those jobs — and those paychecks — they wouldn’t be coming to me to remodel their houses. So I — and the people who work for my small business — benefit from trade.
The TPP could expand the possibilities of Oregon’s trade-based economy even further, growing more jobs. Countries in the TPP make up 48 percent of Oregon’s exports, and they are a source of important foreign direct investment for our state: more than 145 companies from the TPP nations have a presence in Oregon, employing thousands of workers. With the new legislation, that presence can only grow.
I have written my congressional representatives asking them to support the TPA and the TPP. I hope you will as well.
Debbie Kitchin is owner of InterWorks, LLC, a general contracting firm located in Portland’s Central Eastside. She chairs the Portland Business Alliance Board of Directors and is president of the Central Eastside Industrial Council.