Portland: Better than Nashville
We're better than Nashville — barely.
An economic study by ECONorthwest to take the pulse of the Portland area economy shows that for all its national name recognition, Portland has some seriously off-brand moments.
The annual Economic Check-Up no longer looks back to the Great Recession to see how we're faring. It now looks at cities with similar attributes, such as 1 to 4 million people, gross metropolitan product, income per capita, STEM workers as a share of the labor force and share of households that are cost-burdened (code for poor).
This year, the net included Salt Lake City, Austin, Nashville and Indianapolis. Seattle was retained for old time's sake. Culturally its very similar, but it has Fortune 500 companies that lift it way above us.
In general, the report says, "By a number of economic measures, Portland-metro continues to excel — increasing jobs, growing household incomes and a more educated workforce are evidence of that."
With that comes prosperity but also inequality. Some communities of color have substantially lower average household median incomes than others,
Fear of losing out
In the group of six urban areas, Portland's gross domestic product per capita ($62,606) is second only to Seattle's ($77,273). Lowest is Nashville ($58,639). The U.S. metropolitan average is $53,645. That looks good, until you see the chart for GDP growth from 2015 to 2016. Then Portland is second-last to Indianapolis, around 3 percent compared to Seattle's 5 percent.
In the next chart, Portland has zoomed to the top again: in manufacturing as a share of GDP, Portland is at 25 percent, compared to last in place SLC's 8 percent. The reason however is Intel, according to the report's author economist John Tapogna. Intel spends an incredible amount of capital on the chip-making tools — machines that cost millions of dollars, are obsolete within a few years and need replacing. All that economic activity is good for the books. Take away Intel, and Oregon would be a lot feebler.
The cost of not having many big companies headquartered here came up again in a chart of per capita income for 2016. That's income of every person not just the workforce. Seattle, with Amazon and Microsoft and a fair chunk of Boeing's business, topped the group at $64,553. The rest were between $52,450 (Nashville) and $46,023 (SLC). Tapogna explained that with Fortune 500 companies come good jobs for lawyers, accountants and people in advertising. Portland is also hurt in this chart by being in a high tax state right next door to a no tax city, Vancouver, Washington.
Worsening news comes when you look at median household income and regional price parity. It shows Portland's buying power (adjusted median household income) is very middling. At $67,462, it is unimpressive compared to Seattle's $71,857, and not much better than Nashville's $63,930.
Race and commuting
And then there is income disparity by race. Looking at four races 2016, Asians have the highest median household income, around $80,000, followed by whites ($71,859) Hispanics (around $52,000) and finally African Americans ($37,452). Looking back to 2007, African Americans have been losing ground even as the economy recovers.
Citing the work of Raj Chetty, Tapogna says that economic segregation is baked into the history of the southeastern U.S. Charlotte, North Carolina, is bottom of the league for that.
In 2016, 41 percent of Portland's workers had commutes longer than 30 minutes. SLC is the quickest place to get around (29 percent) while Seattle is molasses (48 percent).
Traffic slowdowns in Portland are inevitable with in-migration and narrow freeways. In a different PBA survey, the three things people were most concerned about were homelessness, traffic and affordability.
Portland shares last place of the six when it comes to housing cost-burdened households, on a par with Seattle with 37 percent. That means look around your MAX car or traffic jam and a third of the people are struggling to pay their rent or mortgage because it's 30 percent of their income. Again, Portland and Seattle are jointly the worst off when you look at home price to income ratio in 2016. With a ratio of 4.84:1, we're a lot worse off than the national average which is 3.81:1.
When it comes to education, measured as the share of the population over 25 with an associate's degree or better, Portland is middling at 48 percent (Seattle is 51 percent, Nashville 41 percent) but Portland has the greatest rise in that number between 2010 and 2016.
"We're better at bringing people in (with degrees) than growing our own," said Tapogna, referring to the common complaint from prospective companies that the Oregon workforce is not highly educated.
Another factor education plays into is venture capital.
Portland is second worst in VC deals ($123 million) with SLC at $533 million and Seattle at $396 million. All that activity in SLC remains unexplained, but the drift is that a city needs a major research university to spin off startups that VCs can bet on. Tapogna suggested maybe as OHSU and the Knight Cancer Research Center grow the could link up with the new science campus in Eugene at the University of Oregon.
Employment grew between 2015 and 2016 most in construction, followed by education and health services. The big drop-offs in employment, despite the economic recovery, were in government jobs and retail.
A simple line graph index from the year 2000 tracking total employment, population and housing unit stock shows employment taking a savage dip after 2007 (the Great Recession) but coming back, and housing unit stock falling relative to the other two. Meaning: finding a place to live here is harder than ever before.
The report ends with a cry for action, talking about the need "to focus on affordability and growing jobs for the region to continue its strong economic performance."
The goal? "To provide a key tool for policymakers and stakeholders to identify areas to focus on to ensure a world-class region with opportunities for all."
Portland: We're #4!
The 2017 Economic Check-Up focuses on three broad categories of measurements for Portland-metro: 1) prosperity and productivity, 2) opportunity and affordability, and 3) workforce and investment climate.
In addition to some Portland-metro specific data, the report evaluates how the region fares in these three categories relative to five updated comparator regions - Austin, Seattle, Indianapolis, Nashville and Salt Lake City. Among the regions, Portland-metro ranks fourth overall across all economic indicators in each of the three categories.
Reporter, The Business Tribune
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