Oregon s Falling Labor Force Participation Workers Compensation Insurance Seminar May 22, 2013 Nick Beleiciks Let s start with a simple graph. Oregon Employment Loss by Recession 0% % Job Loss from Peak Employment 2% 4% 6% 8% 10% 12% 1948 1953 1957 1960 1969 1973 1980 1990 2001 2007 Mar Baseline 0 1 2 3 4 5 6 7 Number of Years from Employment Peak Projection: Oregon Office of Economic Analysis, March 2013 1
Translation: three years into recovery, we ve added back fewer than half of the jobs lost in the recession. th Percent Job Losses Relative to Peak Employment Mont 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% Percent of Job Losses in Oregon Since Peak in December 2007 74,200 more are needed to return to peak. 72,400 jobs have been added back. -8.0% 146,600 jobs were lost. -9.0% - 6 12 18 24 30 36 42 48 54 60 66 72 78 84 90 Number of Months After Peak Employment That s why Oregon s unemployment rate is still at historically high levels, equal to the worst rates of the early 2000s recession. Percent of Labor Force 12.0 9.0 6.0 3.0 Seasonally Adjusted Unemployment Rates, Oregon and U.S. 2003 to Present Oregon U.S. Oregon s April Unemployment Rate In 2011: 9.6% In 2012: 88% 8.8% In 2013: 8.0% Source: Local Area Unemployment Statistics 0.0 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 2
And there are still nearly 151,000 unemployed in Oregon, far above the roughly 100,000 pre recession level (but much better than the recession s 240,000). 250,000 200,000 150,000 100,000 Unemployed Persons, Oregon Statewide Not Seasonally Adjusted, 2003 to Present Oregon s April Unemployed Count: In 2011: 187,500 In 2012: 170,500 In 2013: 150,600 50,000 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Monthly job gains have been pretty average lately. 15,000 Oregon's Monthly Job Growth or Decline seasonally adjusted 10,000 5,000 Employment Low Point February 2010 0-5,000-10,000-15,000-20,000 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 3
90,000 Some industries are actually doing quite well. Seasonally Adjusted Employment in Oregon Professional and Technical Services: 1997-2013 85,000 80,000 Employment 75,000 70,000 65,000 Seasonally Adjusted Employment in Oregon Private Health and Social Services: 1997-2013 60,000 220,000 1998 2000 2002 2004 2006 2008 2010 2012 200,000000 Employment 180,000 160,000 140,000 120,000 1998 2000 2002 2004 2006 2008 2010 2012 What s happening in manufacturing? Employment 240,000 220,000 200,000 180,000 Seasonally Adjusted Employment in Oregon Manufacturing: 1990-2013 Consider this scenario: Increasing demand for manufactured products. Productivity high. Profits decent. Do we need to hire more people? 160,000 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 4
Other sectors are not doing so well. Seasonally Adjusted Employment in Oregon Construction: 1990-2013 110,000 100,000 90,000 Employment 80,000 70,000 60,000 Seasonally Adjusted Employment in Oregon Government: 1990-2013 50,000 320,000 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 300,000 Employment 280,000 260,000 240,000 220,000 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Five Key Facts from Last Week s News Release Unemployment rate fell to 8.0 percent Lowest rate since October 2008 (7.77 percent) Nonfarm payrolls added 3,700 jobs in April Payroll employment has risen for seven months in a row Oregon added 27,500 jobs since April 2012 Labor force participation rate was 61.9 percent Record low since series began in 1976 5
Oregon s labor force participation rate has fallen dramatically in the last few years. 70.0 69.0 Oregon Labor Force Participation Rate 68.0 67.0 66.0 65.0 Jan 2005 Jan 2011 64.0 63.0 62.0 61.0 This is perhaps the biggest single trend impacting Oregon s economy right now. It s one we knew was coming 2,050,000 000 Oregon Civilian Labor Force, Seasonally Adjusted 2003 to Present Slow population growth Retirements Low teen participation 2,000,000 1,950,000 1,900,000 1,850,000 1,800,000, 1,750,000 1,700,000 1,650,000 1,600,000 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Source: Local Area Unemployment Statistics 6
Net migration into Oregon has slowed a lot. This has implications for labor force growth, labor force supply, and demand for products and services. 100,000 Components of Oregon's Annual Population Change 80,000 60,000 Net Migration Natural Increase 40,000 Persons 20,000 0-20,000-40,000-60,000 Source: Portland State University, Population Research Center Year The definition is important for this discussion. Participation Rate = In 2012, 63.4% = Employed + Unemployed Civilian Noninstitutional Population 1,792,000 + 171,000 3,097,000 Unemployed = No job, available and currently looking for work (regardless of unemployment insurance eligibility) Civilian = Not on active duty in the armed forces Noninstitutional = Not residing in prisons or homes for the aged Population = Anyone 16 years and older Students? In labor force if they are working or looking for work Retirees? In the population if not in a nursing home Undocumented immigrants? Included 7
Oregon s participation rate peaked at 68.9% in 1998. 70 Oregon Has Followed the Long-Term U.S. Trends. Labor Force Participation Rates, Ages 16+ 69 68 67 66 65 64 63 62 United States Oregon 61 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 Oregon s rate is the lowest since state records began in 1976. 70.0 69.0 68.0 67.0 Labor Force Participation Rates, Seasonally Adjusted US U.S. Oregon 66.0 65.0 64.0 63.0 62.0 61.0 60.0 59.0 58.0 8
More women participating in the labor force raised participation rates during the 1970s 100.0 90.0 80.0 U.S. Labor Force Participation Rates by Sex Total Men Women 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 and Oregon s labor force showed a similar pattern. 85.0 Oregon Labor Force Participation Rates by Sex 81.0 77.0 Total Men Women 73.0 69.0 65.0 61.0 57.0 53.0 49.0 45.0 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 9
The aging of the population is responsible for about one half of Oregon s falling labor force participation (similar to the U.S.). Aging Population Accounts for One-Half of Falling Participation Rates Oregon's Population and Labor Force Participation Rates by Age Group 2000 2012 Age Group Population Share LFPR Population Share LFPR 16-19 7.2 56.9 6.3 36.5 20-24 8.7 82.1 8.7 73.3 25-34 17.6 85.6 16.6 80.1 35-44 20.5 85.6 16.4 82.5 45-54 19.3 84.9 16.4 80.5 55-64 12.6 57.1 16.9 67.0 65+ 14.1 11.9 18.7 17.0 Total 100.0 69.1 100.0 63.2 Percentage Points Total LFPR change, 2000-2012 -5.9 Due to aging -3.2 Due to other effects -2.7 Source: Oregon Employment Department, using Current Population Survey data Older workers buck the trend of declining participation. 70 68 U.S. Labor Force Participation Rate, Age 55-64 68.8 66 64 64.5 62 60 58 56 54 52 Age 55-64 Projection 2010-2020 50 1948 1954 1960 1966 1972 1978 1984 1990 1996 2002 2008 2014 2020 10
Perhaps it is time to expand the prime working age? 88.0 Labor Force Participation Rates, Age 25-54 86.0 84.0 82.0 80.0 78.0 76.0 United States Oregon 74.0 1978 1982 1986 1990 1994 1998 2002 2006 2010 Discouraged workers who quit looking for work in the last 12 months are a small part of Oregon s falling labor force. 2,050,000 Oregon Labor Force and Discouraged Workers, 2002-2012 2000000 2,000,000 Discouraged Workers (not in labor force) Labor Force Number of People 1,950,000 1,900,000 1,850,000 1,800,000 1,750,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 11
Declines in participation among teenagers and young adults account for one fourth of the overall falling participation rate. 70 Oregon Labor Force Participation Rate, Age 16-19 65 60 Age 16-19 Projection 2012-2020 55 50 45 40 35 35.5 30 29.9 25 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 Oregon s labor force participation rate ranks 31 st highest among the 50 states. 2012 NV = 64.7% ID = 64.6% WA = 64.5% U.S. = 63.7% OR = 63.2% CA = 63.0% High ND = 83.7% Low WV = 54.3% 12
Labor force participation rates vary widely across Oregon s counties. High Hood River 83.7% Labor Force Participation Rates by County, 2012 Low Curry 47.4% 47.4% to 59.7% 59.8% to 63.3% 63.4% to 68.0% 68.1% to 83.7% Participation rate projected to continue falling through 2020. 70 Oregon Labor Force Participation Rate 69 68 67 66 65 64 63 63.4 62 Oregon 61.2 Projection 2012-2020 61 Projection 2002-2012 Trend 60.6 60 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 13
Overall participation rate will continue to fall as the population ages. LFPR for men will fall more than for women. Oregon Labor Force Participation Rate Projections, 2012-2020 Teenager and young adult age groups will continue their trend of falling participation. Total, 16 years and older 2012 LFPR 2020 LFPR 2012-2020 Change 63.2 61.2-2.0 The prime working age population is expected to remain relatively lti l unchanged. Older worker age groups will continue to increase their participation. Men 68.2 65.8-2.4 Women 58.5 57.3-1.2 16 to 19 36.5 29.9-6.6 20 to 24 73.3 68.9-4.4 25 to 34 80.1 78.8-1.3 35 to 44 82.5 82.0-0.5 45 to 54 80.5 80.2-0.3 55 to 64 67.0 70.1 3.1 65 and older 17.0 21.2 4.2 Nick Beleiciks, State Employment Economist Oregon Employment Department Nick.J.Beleiciks@state.or.us (503) 947-1267 To find this presentation online, go to www.qualityinfo.org and use the search box to look up my name Join the conversation: OregonEmployment.blogspot.com Twitter @OrEmployment 14