Report: Economy growing but incomes stagnating
The Portland area economy is booming but incomes are not keeping pace, contributing to the growing affordability problem in the region.
Those findings are included in the 2015 Check-Up on the Portland Region's Economic Health, which was released Thursday. It is the fifth annual economic assessment prepared by the Value of Jobs Coalition, which includes regional business associations and economic development agencies.
"The real question is, how do we create middle income jobs that allow people to live in the region? How do we sustain the ones we have and create more?" says Sandra McDonough, President and CEO of the Portland Business Alliance, which helped fund the assessment.
The newest assessment says the region has now recovered almost twice the number of jobs lost during the darkest days of the Great Recession. Between September 2008 and September 2009, the Portland-metro area lost 72,900 jobs. The latest job count says the region has only regained all of them but added 70,700 more making it one of the fastest growing major metropolitan areas in the nation.
And the Portland area is also leading in productivity growth, driven largely by the region's strong electronics industry, including Intel's research and manufacturing plants in Hillsboro. Their products make up a large share of the traded sector imports that bring new dollars into the area.
"Semiconductors make up more than 40 percent of our exports, which is higher than any other region," says John Tapogna, president of the ECONorthwest economic consulting firm, which compiled the assessment.
But, as previous assessments have also noted, incomes continue to lag in the region. By 2014, the per capita income in the region was $45,794 $1,821 below the national average for metro regions of $47,615. Median household incomes also stagnated, only increasing from $60,128 to $60,248 between 2013 and 2014.
That gap developed well before the Great Recession and is continuing, despite the other positive signs of the economic recovery. One reason is a longterm decline in middle income jobs that is happening in other regions, too. According to the report, in 1980, middle income jobs represented 69 percent of Portland area employment. By 2013, they had fallen to 57 percent.
Another reason is a loss of full-time jobs. The report says only 47.9 percent of regional workers had full-time jobs in 2014, down from 53 percent in 2000.
"The loss of full-time jobs was a big surprise," says McDonough.
One result of the disparity is a growing affordability problem, especially given the recent dramatic increases in housing costs that have generated protests by renter groups and demands for more affordable housing by advocacy organizations. According to the report, comparing 2013 median household incomes with regional cost of living figures, Portland is a less affordable place to live than Cincinnati, Denver, Minneapolis, Salt Lake City and St. Louis.
"The buying power in those cities is greater, even when the cost of living is taken into account," says Topagna.
That's the case, despite the fact that Portland area MHI surpasses the national average by $3,700.
"Couple income stagnation with rapidly rising housing prices and increases in the cost of living and we have some fundamentally profound changes emerging in the Portland-metro area around who can afford to live here," reads the report.
The Value of Jobs Coalition includes Associated Oregon Industries, Greater Portland Inc., the Oregon Business Association, the Oregon Business Council, the Port of Portland, and the Portland Business Alliance.
For more information, visit valueofjobs.com.