The South Coast economy: Q and A with a state economist
Kale Donnelly is a workforce analyst for the Oregon Employment Department. His coverage area includes Central Oregon and the Columbia Gorge as well as Southwest Oregon’s Coos, Crook, Curry and Douglas counties.
Donnelly recently looked at how Coos County and surrounding areas are recovering from the Great Recession. His presentation is available here.
Donnelly: The industries that added the most jobs between 2016 and 2017 were local government (+120), construction (+80), and trade, transportation, and utilities (+80). Local government’s new jobs can be mostly attributed to local education, while increases in retail trade employment largely drove the growth in the trade, transportation, and utilities sector. Construction saw the greatest relative growth in employment, topping the list at a 9.8 percent annual growth rate.
Donnelly: Coos County is roughly 5 percent down from its pre-recession peak employment levels, so we’re almost there! However, we’ve yet to recover to our pre-recession levels due to a few reasons.
First, Coos County was hit disproportionately hard during the Great Recession due to its large share of employment in the wood product manufacturing industry. If you drive through Coos Bay, it is still very easy to tell that we are an exporter of a large amount of various wood products. When the housing bubble burst and the economy collapsed many Coos County residents were without work, but especially those who were employed within the sectors that fed in to the construction industry. Home-building came to a standstill after the bubble burst, and so did the demand for wood products and other various new-construction inputs (appliances, windows, air ventilation, electrical wiring, etc.).
Second, housing availability and housing costs are a large barrier to entry for many workers and/or job-seekers looking to relocate to the area. The local housing costs don’t necessarily reflect the local wages paid, and the construction of new homes is not at a pace that we would like to see, especially in multi-family units. However, the state as a whole is in that same boat.
Additionally, many young residents are moving out of the region to pursue higher education or more expansive job opportunities elsewhere, draining the labor pool of new, incoming workers that could help ease the current demand for labor that we’re seeing. All of these factors combined are having a discernable effect on Coos County’s economic recovery.
Donnelly: The industry mix of each county is unique, and rural counties are no exception.
Coos County’s recovery has been very similar in scope to other rural counties, but Coos is known more for its tourism and wood product manufacturing industries. There are other rural counties that specialize more in agricultural products. However, the commonality between rural economies is that they seem to rely more on “goods producing” industries rather than “service producing” industries like their metro area counterparts.
Donnelly: The industries that reported the largest share of difficult-to-fill vacancies being due to a “lack of qualified candidates” and a “lack of applicants” varies greatly. Industries reporting a greater share of vacancies going unfilled due to a lack of applicants in 2016 were financial activities (53 percent of responses), health care and social assistance (49 percent) and leisure and hospitality (45 percent).
Answering “why” job seekers hadn’t applied for these industries’ positions is tough to answer. It could be because the job seeker didn’t think they were qualified for the position to begin with, or that the line of work and/or wages offered weren’t favorable to those passing up the choice to apply.
Those industries with a greater share of “lack of qualified candidates” responses were transportation, warehousing, and utilities (40 percent of responses), professional and technical services (38 percent), and wholesale trade (27 percent). I’d imagine that qualifications for truck drivers, engineers, scientists, lawyers, forklift operators, and other occupations typically concentrated within these industries have high standards for entry-level employment – and deservedly so! These jobs require highly skilled workers to effectively complete their job duties.
Donnelly: Definitely. With Coos County being a destination for retirees the labor force participation rate is notably lower than other areas of the state. Demographics are one of the largest factors that influence the labor force participation rate (LFPR). A low LFPR is not inherently a bad thing, but ours is rather indicative of the “quieter” nature of the area and its draw to those looking to retire near the coast.
Donnelly: Unfortunately, there’s not much data to really tie in to the discussion of the Chetco Bar fire since typical seasonal layoffs occur in the same timeframe we saw the smoke at its worst. There was a sharp increase of nearly 1,700 jobs in the industry that houses wildland/forest firefighters and a loss of roughly 350 jobs in leisure and hospitality throughout the state. So, there was a kind of “yin and yang” to Oregon’s employment. The largest impact was actually in Central Oregon, which saw larger than expected September losses in leisure and hospitality due to smoke. We didn’t see any measurable, negative employment impacts on the South Coast last September.
The future of forest fires may look similar, as many tourists are less likely to take advantage of Oregon’s outdoor amenities and attractions when there are thick clouds of smoke in the air.