Economists: More workers moving to Oregon, more construction jobs need to be filled
One in three construction jobs in Oregon was lost during the Great Recession, and employment in that market did not pick up again until 2013. It has rebounded significantly since then and the construction industry is one of the state's most robust. Oregon's construction sector grew by 9.7 percent between the first quarter of 2017 and the first quarter of 2018, above the national average, according to the state's Office of Economic Analysis.
Oregon is attracting more workers than it is losing, despite its shortage of affordable housing, and those who are looking for work in the trades are having no trouble finding jobs. In fact, the construction industry is facing a shortage of workers to fill the number of jobs that are available.
Gail Krumenauer, senior economic analyst with the Oregon Employment Department's Workforce and Economic Research Division, said the most recent job-to-job flows data from the Census Bureau show that, on average, about 1,170 workers came from other states to take jobs in construction in Oregon each quarter between the spring of 2015 and the winter of 2016. During the same period, the average number who left to take jobs in any sector in other states was 1,020, with Oregon netting a gain of workers.
Krumenauer said that while the data doesn't show how many of those coming into Oregon worked in a different sector in their origin state, or how many who left Oregon went to a job in a different industry, it seems likely that many would continue working in construction because the industry is growing so fast right now and construction jobs tend to pay well.
From the spring of 2015 to the winter of 2016, 70 percent of construction jobs were held by "prime-age" workers ages 25-54, while 22 percent were 55 years or older and 8 percent were ages 14 to 24. Those shares were similar for the previous year as well, she said.
"I went back and looked at the spring of 2011 through the winter of 2012 to see if there were any differences in the age distribution. That period of time would have been after the huge job losses in 2009 and 2010, but before construction really started seeing notable growth again in 2013. Looking at the 2011-2012 timeframe, 74 percent of jobs were held by prime-age workers, while 20 percent were workers ages 55 and older, and 7 percent were ages 14 to 24," Krumenauer noted.
For a comparison, she looked at the age distribution of all jobs in Oregon and found that for the 2015-2016 timeframe, construction had a slightly higher share of prime-age workers in jobs (70 percent) than all industries (66 percent). The difference was primarily in younger workers. About 11 percent of all jobs were held by workers ages 14 to 24, compared with 8 percent in construction. Workers ages 55 and older made up similar shares of jobs in construction (22 percent) than in all industries (23 percent).
Josh Lehner, an economist with the state's Office of Economic Analysis, said that while more people of all ages move into Oregon each year than move out, 20- and 30-somethings move at significantly higher rates than all other age groups and the state sees a big influx of young, working-age households every year.
"They tend to be unemployed and/or lower-wage than the overall population but that's because they're young. When you're beginning your career, it is not uncommon to move somewhere in search of a job. You are unemployed, but you will find a job in the near term," he said. "In fact, even with this big influx of young adults, the share of young adults in Oregon that has a job is at or above the national average. So even if these young people move here unemployed, they have a job pretty quickly."
When asked whether Oregon's recent increase in the minimum wage was attracting construction workers to come here, or if the shortage of affordable housing is making them leave to look for homes and jobs in other states, Krumenauer said her department doesn't track data specific to in-migration based on the minimum wage or out-migration based on housing costs.
However, it does conduct a quarterly job vacancy survey and asks businesses about the job openings they are actively recruiting to fill. For those job openings, the businesses provide the job title, the starting wage and the educational requirements.
"We also ask them if their vacancies are difficult to fill, and if so, to provide the primary reason," Krumenauer said. "In spring 2018, job vacancies in construction paid an average starting wage of $21.76. That's more than the median wage ($19.09) for all jobs held by current workers in Oregon. Construction is an industry with a high share of difficult-to-fill vacancies. Employers report about eight out of 10 construction vacancies as hard to fill."
Lehner noted that younger generations are employed in the trades at a lower rate than in the past, with the number of 20 or 25 year olds nationwide employed in construction much fewer than in the 1980s, 1990s or 2000s.
Great Recession's influence
"It is hard to tell how much of this is due to younger people not entering the profession, or the fact that when the biggest bulge of Millennials turned 18 or 20 years old it was at the depths of the Great Recession. There were no jobs available and, in particular, there were no construction jobs available due to the collapse of the housing bubble," he said. "However, in the past handful of years, the share of these young adults working in construction, or the trades more broadly, is rising. I think the gap was in large part due to the timing of the business cycle and timing of the Millennials entering into their prime working years."
Lehner added that the "mantra of 'go to college'" is holding some young adults back from entering the trades, but he doesn't consider it to be a primary factor. "There are more working-age Oregonians today than ever before. The challenge for construction, and every other industry out there, is attracting those potential workers to your field of work, and your business specifically."
Housing affordability poses potential problems for the state's economic outlook, he said, adding it not only forces "hard or impossible choices" for local household budgets but also puts the flow of young, working-age households moving to Oregon at risk.
"If someone is unable to afford to move here, they will go elsewhere. And if Oregon sees less talent, less workers moving into the state, it will alter our long-run economic forecasts," Lehner said. "If Oregon has fewer productive workers in the future due to lower migration trends, the productive capacity of the Oregon economy will likewise be smaller than we currently expect. To date, and given available data, affordability has not yet choked off that growth, or the pipeline of young workers moving to the state."
Though housing affordability is a problem and has caused shifts in where people live and how far they commute, in-migration remains relatively strong. Lehner said the number of people, of all ages, moving to Oregon in recent years is on par with what the state experienced in the 1970s and 1990s.
By the numbers
In 2016, Oregon had 63,401 construction jobs and the industry is expected to add another 10,438 jobs by 2025. That represents new jobs from the sector's growth as well as replacement openings due to retirements. The average annual wage for construction workers in Oregon is $47,450, according to WorkSource Oregon and Washington.