The Oregon Business Plan has two primary goals: Raise per capita personal income above the national average by 2020 and create an average of 25, 000 jobs per year through 2020. How are we doing?
Oregon hit the jobs target in 2011 but job growth has slowed considerably in 2012. And while per capita personal income grew in real terms in 2011, Oregon made up no ground when compared to the rest of the U.S.
Oregon did receive some good news last week. The U.S. Bureau of Economic Analysis reported that Oregon’s Gross Domestic Product (GDP) growth was 4.7% in 2011, ranking second among all states, behind North Dakota. Eighty-four percent of that growth, or 3.94 percentage points, came from durable goods manufacturing (i.e. metals, machinery, semiconductors).
This is welcome news and it means that, at least in some segments, we have a productive economy that is making and selling things. Durable goods manufacturing firms employ thousands of people at very high wages. Those employees pay taxes and spend their earnings at local businesses, benefiting all Oregonians.
But unfortunately these GDP gains-as impressive as they are-are not enough to generate the job and income growth in every part of Oregon that we need to lift up struggling families and to generate the tax revenues that will support investments in our public schools, transportation, and critical health and safety net services. Oregon needs more firms selling lots of products, hiring lots of people, and paying high wages to generate the gains that we need across the state. That means we need to start more, grow more, recruit more and retain more highly productive companies in a variety of sectors, and not just in the Portland Metro area. Some of that will happen naturally as the economy recovers, but a lot of it will come from making the right policy and investment choices as a state.
Per Capita Personal Income Up, But Not Compared to U.S.
While GDP growth is one important measure of economic health, the Business Plan focuses on two other measures of economic health: per capita personal income and jobs.
The Business Plan aims to help Oregon raise per capita personal income above the national average by 2020. Currently Oregon’s per capita personal income is 91% of the U.S. average, virtually unchanged in 2011 from 2010. Beginning in 1997, Oregon’s per capita personal income took a dive compared to the U.S. and has bumped along between 90-92% of the U.S. average for the past several years.
In real terms per capita personal income has increased in each of the last three years and, for the first time since the recession began, was higher in 2011 than it was in 2007. However, this growth has not outpaced the U.S. as a whole, maintaining Oregon’s low position compared to the nation.
Per capita personal income is a critical measure of economic health because it defines, in a general sense, how well individuals and families are doing, as well as the tax base upon which we fund our public services like education. When Oregonians are poorer than their peers across the nation, their relative standard of living is diminished, as is Oregon’s ability to pay for great schools and other public goods. In a global economic environment where education and skills are the primary predictor of economic success, this is a major problem.
Per capita personal income United States, Oregon and Washington (U.S. B.E.A.).
Per capita personal income is total personal income divided by total midyear population.
For a more in-depth discussion of per capita income and its effect on Oregon’s economic and fiscal health click here.
Oregon hits the job mark in 2011 but is off pace in 2012
The other primary goal of the Oregon Business Plan is to create an average 25,000 jobs per year through the year 2020 (250,000 net new jobs between 2010-2020).
Oregon hit the mark in calendar year 2011, creating 26,084 jobs. This figure includes payroll jobs, self-employment, farm jobs and several other, albeit minor, categories of employment. In 2011, the biggest gains came in construction, wholesale trade, and accommodation/food services.
Pace slows in 2012
The pace of growth slowed considerably through April of this year, however. In the first four months of 2012, Oregon created a total of 5,200 jobs with the largest gains coming in professional and technical services, durable goods manufacturing, and leisure/hospitality. This puts Oregon on pace to create just over 15,000 jobs in 2012, 10,000 below the Oregon Business Plan target. Job growth across the U.S. has slowed in 2012 due to a variety of factors, both international and domestic.
The Oregon Business Plan jobs statistics are compiled by ECONorthwest, an Oregon based economics consulting firm.
Recipe for Success: The Oregon Business Plan
We believe that the Oregon Business Plan provides the framework for Oregon to grow jobs and raise incomes. Many factors driving job and income growth are national and international in nature, but there is no question that certain places do better than others at growing jobs, attracting investment, and raising incomes. The Business Plan emphasizes the importance of understanding and focusing on the needs of our key traded sector industries. Based on these needs, we have proposed several initiatives to improve the skills of our people, the productivity of our business environment, the quality of place that attracts and retains talented people, and our culture of pioneering innovation.
Read, and help improve, the Plan