Oregon is the second fastest growing economy in the U.S., according to a recent MSNBC study behind that of North Dakota. That’s good news, but requires a closer look.
1. A boom in North Dakota and Oregon is a blip in California and Texas.
You’ll notice both North Dakota and Oregon are relatively small states. That means that a boom in output that would have a relatively small impact in larger states, like California and Texas, will have a big impact in these states.
North Dakota has enjoyed job creation in the energy sector, with their abundance of natural gas.
Portland (and Oregon’s) primary economic growth is fueled by “Durable Goods,” or manufactured items designed to last for at least three years. In short, it’s Intel, which is in the process of repatriating manufacture of microchips, largely due to overseas problems. These highly technical jobs are growing at a brisk pace. The effect of this growth is far more significant in real terms than in North Dakota, because Oregon’s gross domestic product (“GDP) is five times larger.
2. Job growth is highly stratified.
By far, the three most significant industries in the state of Oregon are durable goods (like Intel, discussed above) followed by real estate and government, all of which require s
Pity the worker who lost their job in recreational vehicle manufacturing
in the Great Recession. Fully 64% of those workers now earn almost 20% less at their new jobs. This is symptomatic of a national unemployment trend.
At the end of last year, when the unemployment rate was 8.6%, unemployment by level of education was:
• High school education – 12%
• College degree – 4.5%
• Professional degree – 2%
Consistent with that data, my cousin and his wife were both hired by Intel last year, and both are recent Ph.D. graduates.
On the other hand, the RV manufacturing job may never return. Jobs that require a high school education, regardless of business tax incentives, are likely to be permanently exported to countries with lower wages and benefits. Globalization is a reality.
3. Education is paramount
As the recovery from the Great Recession grinds forward, it is clear that skills training in areas of the economy that are growing, like technology and health care, are critically important. As we make difficult economic choices to reduce the national deficit, states that are enjoying growth would do well to invest in such training for their long term economic health.