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Recovery from pandemic still expected in late 2022 or early 2023 as competition grows for workers.

PMG PHOTO: ZANE SPARLING - Paperwork from the Oregon Employment Department is shown here.As Oregon's economy continues to recover from the coronavirus pandemic, Employment Department experts say it's a job seeker's market right now, but with some differences from the tight pre-pandemic labor market more than a year ago.

"As Oregon's economy continues to moves toward more fully reopening, we are seeing businesses compete increasingly for available workers. This trend is likely to continue," Gail Krumenauer, state employment economist, says.

"That competition for workers is creating a job seekers' market, where workers can get multiple job offers and bid up wages within a sector of the economy or across sectors."

The onset of the coronavirus pandemic sent Oregon's economy and job losses into a nosedive — the steepest in modern history — but the recovery, while progressing, is likely to take up to 18 more months.

The state's latest economic and revenue forecast projects that Oregon will return to pre-pandemic employment levels by the final quarter of 2022. The agency's forecast pegs it in the first quarter of 2023.

Still, David Gerstenfeld, the agency's acting director, says either of those time frames would be sooner than the seven years from the start of the Great Recession in December 2007 to full recovery.

"This recovery looks to be more typical than the onset of the recession, but not like in the Great Recession," he said." We've already seen a rapid re-employment and quicker rebounding. We've seen a couple of years of jobs recovered in seven months. It's going much quicker. That may be turning toward a more typical recovery now."

Rebound is uneven

Krumenauer and Gerstenfeld spoke during the agency's weekly conference call with reporters on Wednesday, June 2.

Oregon's unemployment rate soared from a record-low 3.5% in March 2020 to an adjusted 13.2% in April 2020 as businesses shut down or curtailed operations during the pandemic. The rate has fallen since then, and was 6% in April, following rapid job growth (roughly 14,000 per month) during each of the first three months of this year. (The peak rate during the Great Recession was 10%.)

Oregon's economy lost almost 170,000 jobs from the first to the second quarters of 2020, and unemployment benefit claims jumped accordingly. The April 2021 mark is still 117,400 below peak employment of 1.86 million in February 2020, the last full month before the pandemic.

"Hiring demand is just as strong or stronger as it was prior to the pandemic," Krumenauer said. "We're certainly poised to see strong growth happen as Oregon's economy continues to more fully recover."

The largest initial job gains during the current recovery were in leisure and hospitality — restaurants, bars and taverns and lodging, all of which were affected the most by lockdown orders and advisories against travel.

"We have a lot of ground to regain there," Krumenauer said.

On the other hand, she said, 12,000 workers in that field decided to change jobs, many of them moving to retail trade or transportation and warehousing, sectors where starting pay was often higher and some jobs came with benefits such as health insurance.

"So it is increasing competition," she said.

"Health care leads Oregon's economy in the long term, between demographics (of an aging population) and the consistently growing need for health care over time."

Still seeking workers

Still, many workers remain out of the workforce while some businesses say they cannot find enough workers to fill positions.

Krumenauer acknowledged that for some people, a factor keeping them out of the workforce is supplemental federal benefits of $300 per week, equivalent to pre-tax earnings under the federal minimum wage of $7.25 per hour. (Oregon's minimum wage, based on geography, is far higher.)

But that supplemental benefit is scheduled to end nationwide Sept. 4, and President Joe Biden said renewal is unlikely. Unlike 25 states — mostly with Republican governors — planning to end that benefit as early as this month, Oregon is not poised to do so.

Krumenauer said around 350,000 Oregon workers pre-pandemic had responsibility for children at home — most schools went to remote learning during the pandemic — and most of those workers were at jobs that could not be done at home. Even now, four of every five jobs advertised are for full-time positions.

"The bulk of those are jobs need to be done in person and on the job site," she said. As summer approaches, "we are likely to see that continued difficulty in our labor market."

She said other factors deterring people from returning to work are the lack of child care and lingering concerns about the coronavirus, either jobs requiring close contact with the public or care needed for one or more family members at home.

Meanwhile, she said, 84,000 Oregon workers in April were in part-time jobs but sought full-time work.

Work search rule returns

Though the Employment Department is still paying benefits to a higher-than-usual number of unemployed workers — it paid out $114 million to 143,000 in the last week of May — it is also phasing in renewed work search requirements for an estimated 220,000 people. Requirements of being available for work and actively searching for work are conditions of receiving benefits, but they were put on hold last spring with the avalanche of claims and the unavailability of jobs.

The initial step for 40,000 unemployed workers is registration with iMatch Skills, the state system for matching job seekers with suitable jobs under WorkSource Oregon. The next step is one-on-one meetings, either virtual or in person, with staff.

"A lot of people have not been through this process before, which is why we are phasing it in so we can provide them assistance," Gerstenfeld said.

The requirements apply to people receiving regular benefits from the state unemployment trust fund and federal benefits (Pandemic Emergency Unemployment Compensation) that are available for 13 weeks after someone has exhausted 26 weeks of state benefits.

Though details will be announced, Gerstenfeld said similar requirements will apply to some people receiving federal benefits under Pandemic Unemployment Assistance, which goes to self-employed or gig workers. For those who draw income mainly from self-employment — the CARES Act last year made them eligible for federal benefits for the first time under the Depression-era unemployment system — Gerstenfeld said those workers will have to maintain records of their attempts to restart their business activity.

People lose benefits if they fail to meet work search requirements.

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