Third Quarter 2022: Oregonians at Work – Real Wage Growth Faltered Amid Job Gains
June 15, 2023Oregon had 2.04 million people working in jobs covered by the state’s unemployment insurance system during the third quarter of 2022. This was an increase of 47,500, or 2.4%, from the same quarter of the previous year. They earned a total of $32.0 billion, with an average wage of about $15,731 per worker for the quarter. The median hourly wage during the quarter was $24.98.
Median Wage in Many Industries Struggled to Keep Up With Inflation
Oregon employers reported more than 2.2 million jobs during the third quarter of 2022. The vast majority of Oregonians (88.3%) held one job during the quarter. Approximately 10.0% of workers in the third quarter of 2022 held two jobs, 1.3% of workers held three jobs, and 0.4% of workers held four or more jobs. This looks almost identical to a year ago in the third quarter of 2021.
Meanwhile, the median wage decreased by $0.47 over the year, after being adjusted for inflation according to the Consumer Price Index for All Urban Consumers (CPI-U). Inflation reached the highest rates in forty years in June 2022, and that has translated to fewer industry wages keeping up in their real purchasing power. Three industries had real wage gains, meaning that the median wage increased more than inflation: non-classifiable, information, and leisure and hospitality. Non-classifiable had the biggest real gain in median wage percentage growth from third quarter 2021 to third quarter 2022 (10.8%). However, most industries had decreases in real median wage. Natural resources and mining jobs had the biggest decrease in real percentage change (-7.2%), while transportation, warehousing, and utilities had the largest real dollar value decrease (-$1.45).
Median wages and real gain over the past year can also be analyzed by firm class size. As has been the case historically, median wages tend to be the highest in firms with at least 500 employees. The median wage is usually lower in smaller firms. That is still the case in third quarter 2022. Further, if we look at how the median wage has fared over the past year when it comes to inflation, we see a pattern. Adjusting median wages for inflation according to CPI-U, we can determine if a wage is worth as much now as it was last year. As it turns out, workers at smaller firms with less than 50 employees had positive real wage growth from third quarter 2021 to third quarter 2022.
To describe this observation in other words, if someone made $25 per hour in third quarter 2021, is that $25 worth more or less in third quarter 2022? For workers at firms with less than 50 employees, that $25 is worth more. On the other hand, for workers at larger firms – those with 50 or more employees – that $25 is worth less.
However, upper wage growth (considered to be $50 or more per hour in this analysis) was noteworthy in many industries. Average upper wage growth was 13.4% for all industries. Nine industries had greater upper wage growth than the average for all. Construction was at the top of the list at 26.1%, with state government (21.4%) and professional and business services (21.0%) right behind. The number of jobs paying less than $15 per hour declined 59% from third quarter 2021 to third quarter 2022. The number of jobs paying $50 or more per hour increased by 12%.
Most Industries Gained Jobs over the Year
Of the almost 65,000 jobs gained between third quarter 2021 and third quarter 2022, professional and business services experienced the largest growth in both numerical change (25,300) and percentage change (8.9%). The largest decrease in both numerical change and percentage change occurred in financial activities (-3,400; -3.6%).
However, it can sometimes be more helpful to look at the percentage of all jobs rather than the raw numerical value, to put the change in number of jobs in perspective. Some industries are larger than others by nature, and large increases or decreases, though they are many jobs, are a small percentage when compared with the size of the industry. For example, leisure and hospitality gained more than 13,000 jobs between third quarter 2021 and third quarter 2022. However, this only constituted a 5.2% increase. Conversely, private educational services grew by 8.5%, which was about 2,700 jobs.
It is also interesting to look at the composition of industries in the economy. As different industries experience fluctuations, the number of jobs increase or decrease enough that the share of jobs for a particular industry increases or decreases within the economy. Generally speaking, adding jobs can lead to a larger share in the economy, while losing jobs can decrease an industry’s share of jobs – though there are exceptions. From the third quarter of 2021 to the third quarter of 2022, the share of jobs in professional and business services increased from making up 13.0% of all jobs to 13.8%. Leisure and hospitality; construction; natural resources and mining; transportation, warehousing, and utilities; and private educational services also increased in their share of all jobs. State government added 425 jobs from third quarter 2021 to third quarter 2022, but decreased in its share of all jobs.
To provide better data, this analysis also filters out job records that probably contain errors. Jobs that report zero hours or more than 999 hours (about 77 hours per week) worked in a quarter and jobs that paid less than the federal minimum wage ($7.25 per hour) are excluded. Jobs that paid more than $500 per hour and reported less than 10 hours work during the quarter are also excluded.