Oregon’s economy continues to recover and change rapidly.
At 16 months after the initial downturn in the pandemic recession, Oregon has regained nearly two in three jobs lost in the spring of 2020. In the first six months of 2021, employers in Oregon have added roughly the same number of jobs than in the 22 months preceding the pandemic. . For reference, 16 months into the Great Recession, there had been no recovery at all. Job losses continued to mount. The speed and shape of this economic recovery seems different and has happened much faster than what we have seen in the past.
While many companies have hired heavily, many others have reported difficulty adding as many workers as they would like so far in 2021. Their difficulty consists of two general parts: competition with other employers due to widespread hiring, and a relatively low supply of available workers.
Oregon and the United States have seen record levels of job vacancies in recent months. In Oregon, private companies reported 98,000 job openings at any given time between April and June. This is nearly 50% higher than ever reported in the eight-year history of the Oregon Job Vacancy Survey. The demand for hiring in the spring of 2021 has been reported across all sectors of the Oregon economy and in more than 240 different types of occupations.
This record hiring demand also comes at a time when the available workforce is relatively low. Oregon’s unemployment rate was 5.6% in June. It’s relatively low by historical standards; the long-term unemployment rate was 6.8% in Oregon.
There are also still many people, not counted among the unemployed, with barriers preventing them from returning to work or taking a job. Between April and June, 32,500 Oregonians said a COVID-related issue prevented them from looking for work. This could include people with their own underlying health issues, or parents without childcare options or unable to work until they return home from school in person. While this trend has improved from around 65,800 in fall 2020, the recent increase in the COVID-19 Delta variant is creating ongoing concerns.
Overall, high hires, relatively low unemployment, and the barriers that keep some workers out have created a tight labor market. Employers have responded to tense labor market conditions in a number of ways.
On the one hand, employers have increased wages. Actual (or inflation-adjusted) average starting salaries have risen by more than 2% in Oregon in the past year. Companies have also increased their wages for existing workers. Real average hourly earnings for all workers also increased by more than 2% from the pre-recession level in February 2020.
Not all employers can raise wages. Some have found other ways to recruit and retain talent. The job market was also tight before the pandemic. In 2018, the Employment Department interviewed private employers to inquire about the benefits they offered to employees. Three in five offered health benefits and half offered retirement benefits. One in ten employers with health insurance and one in five employers with retirement benefits cited the hiring and retention benefits associated with these offers.
Half of Oregon’s private companies offered paid time off and the other half offered paid time off. One-third offered at least one of the following: flexible working hours, production or performance bonuses, paid professional development training, and life insurance.
Relaxation experience requirements
When the job market has been tight in recent years, some employers have relaxed their requirements for previous work experience. As of spring 2021, about half (53%) of all vacant positions required previous work experience. Almost 19,000 of the 98,000 job postings this spring required less than a year of experience. The largest number of these job postings requiring less than a year of experience were for restaurant waiters, retail staff, licensed practical nurses, restaurant cooks and food preparers. When this does not pose a safety risk and employers are able to do so, relaxing previous experience requirements can increase the number of people qualified for their job openings.
In tight labor markets, employers tend to overlay the signs of seeking help over other efforts such as referral incentives, signing bonuses, posting to online job boards, and collaboration with recruiters outside their immediate geographic area. This includes listing jobs with WorkSource Oregon, where tens of thousands of workers have registered in the job search system.
Any stratification that employers can do with their hiring and retention strategies can help them find and keep more workers in a tight labor market.
Gail Krumenauer is an economist in the Oregon Department of Employment. She can be reached at 800-262-3912, ext. 71268, or at [email protected]