This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.
On paper, Oregon wages are rising rapidly. But anyone who’s been to the grocery store, gas station or brewpub recently can tell you that’s not the whole story.
The state’s average, private-sector hourly wage was $31.11 in February, according to new survey data out from the Oregon Employment Department. That’s up $1.82 from a year earlier.
But factoring in annual inflation, which was 7.9% in February, Oregon workers actually lost ground. They were effectively making less than they were a year earlier.
In Oregon, “real wages” fell by 1.6% in February. Inflation-adjusted paychecks dropped by even more rapidly nationwide, down 2.6%.
Economists have many explanations for why inflation is running at its hottest pace in four decades.
The global supply chain crunch has demand for goods outpacing supply, which pushes up prices.
People came out of the pandemic recession with more to spend, thanks to stimulus payments and rising wages. That gave retailers the flexibility to pass along some of their higher costs to shoppers.
And it’s not just supplies that cost more – workers do, too. Oregon has more open jobs than unemployed people, forcing companies to bid up wages to bring in staff.
Those raises vary considerably across industries. Many lower-paid professions and in-demand jobs are still outpacing inflation.
Take Oregon’s hospitality sector, which was paying an average hourly wage of $20.46 in February. That’s up 4.1% from a year earlier, even after accounting for inflation.
David Cooke, statistics coordinator for the employment department, said the rising wages probably reflect the pandemic’s unique effect on hospitality jobs.
Restaurants, bars and many other attractions closed altogether early in 2020 when the state ordered mandatory lockdowns to prevent the spread of COVID-19.
“Then when the demand and conditions returned more toward normal, many of the workers had found jobs in other industries,” Cooke said. “So it is tough to attract them back to the restaurant industry.”
Additionally, Cooke noted, hospitality work and other relatively low-paying industries have reaped a boost from rapid increases in Oregon’s minimum wage. The hourly minimum has climbed from $9.75 in 2016 to $14 an hour today.
Skilled jobs, like construction and nursing, are in high demand and have pushed up Oregon wages in their categories (up 5.2% and 4.1%, respectively, both handily outpacing national wage gains).
But Cooke said other factors may be at work. He notes that the number of people working in nursing and residential care facilities, a relatively low-paying job, has fallen in the past year. With fewer jobs at the bottom of the wage scale, that means the average across the sector will be greater. Meanwhile, hospitals are hiring higher-paid nursing staff as fast as they can.
The majority of Oregon industries are paying less, after accounting for inflation. Manufacturing suffered the biggest decline in adjusted wages, 4.8%, according to the survey numbers. That could reflect a peculiarity of the data, according to Cooke. By another measure, manufacturers’ own reports of wages paid, he said pay appears to have modestly outpaced inflation over the past year.
On the flip side, the category of “other services” (which includes repair and maintenance jobs, religious organizations and other small categories) appears to have shown strong wage gains in the last year. But Cooke cautioned that the relatively small number of Oregon jobs in that segment might make the data unreliable, given that the category showed a 2.9% decline – after adjusting for inflation – nationally.
Broadly speaking, 80% of workers are losing ground to inflation, according to federal data. And Cooke said the Oregon wage data underscores the toll inflation is having on what workers take home.
“Wage increases have risen substantially across most industries,” Cooke said. “But overall, wage gains have been less than consumer price increases.”
— Mike Rogoway | firstname.lastname@example.org | Twitter:|