Eight years post-recession, finally some good news: wages edging up and home prices cooling off
The greater Portland job market is humming along just as it has for the last eight years since the Great Recession, but workers may just now be singing along with the happy tune.
A new report out Thursday from the Northwest Economic Research Center says local wages are just starting to bump up and a substantial cost-of-living increase coming soon will start putting even more money in the pockets of area workers.
Average hourly earnings in the Portland area are just above $28 per hour, according to the report authored by Portland State University Economics Department Chair Tom Potiowsky.
What took so long?
Well, Potiowsky describes the situation as two pigs in a snake.
Got that image in your mind? Good.
The demographics of the labor market has two bulges of people right now: aging Baby Boomers who are leaving and young Millennials who are just entering the market.
Two pigs in a demographic snake.
Correct for the number of people leaving high-wage jobs and being replaced by entry-level youngsters, and most individual's paychecks are probably getting fatter despite overall data showing wages as a whole have been flat.
There are other explanations, too, such as more people joining the labor market and global competition. But the good news is that people in the region may finally be feeling the effects of the economic expansion, which isn't necessarily the case in the rest of the country.
"While many large metro areas have not yet fully recovered from the Great Recession, Portland incomes have grown by 9 percent over pre-recession levels," reads the 35-page report.
But not everyone in the Portland area is getting an equal slice of the growing pie. The data still shows staggering differences in income based on race.
Across the region, households average $55,000 per year with Asians, as a group, making the most in the region with a $70,732 average annual income. Whites are just behind at $63,215.
African Americans continue to make the least here with an average annual household income of just $35,246, according to the data. Other groups captured in the report are Pacific Islanders averaging $39,186 per year, Native Americans at $42,206 and Hispanics/Latinos at $42,232. There is no break-out in the report for mixed-race wage-earners.
The Portland metro area forecast also touches on housing expectations. The housing market has cooled a bit, which the report describes as going from "volcanic" to "boiling." The first quarter of 2017 showed the Case-Schiller home price index rising 7.5 percent rather than the double digits seen earlier.
This coupled with more multifamily housing permits than expected means fewer homes are likely to be developed in the next few years.
But the Portland area remains an attractive new home to many due to its healthy local job market, relatively low housing prices (compared to other U.S. metropolises) and trendy culture.
Washington County saw a 2.29 percent increase in population frrom 2015 to 2016. Clackamas County had the second-biggest increase in population in the region at 1.91 percent. Multnomah County was at 1.7 percent.
PSU's economic forecast covers seven counties and sponsored by NW Natural, Clackamas County, Metro regional government, the city of Portland, the Port of Portland and Portland General Electric.