Oregon’s income growth has slowed markedly over the past two years, raising financial pressures as the state faces a range of economic headwinds.
Oregon’s income grew far faster than the rest of the nation in the aftermath of the Great Recession, a boom time for the state as new industries and highly educated migrants fueled an economic surge.
Oregon downshifted during the pandemic, though, and is now spinning its wheels.
The state’s median household income was just shy of $90,000 last year, an increase of just 1.1% from the year before and about $6,000 above the U.S. median, according to recently released Federal Reserve data.
Nationally, incomes grew more than three times faster than Oregon incomes did in both 2023 and 2024. And Oregon’s growth rate was below the rate of inflation in both years. That means the typical household has less buying power.
There are several factors holding Oregon back.
The state’s labor market stalled in 2023 and Oregon is now weathering a historic surge in job cuts. Employers have announced more than 14,000 mass layoffs since the start of 2024 and the state’s unemployment rate has crept up to 5%.
Some vital industries are having real trouble, notably manufacturing and construction. Those sectors have shed 6,200 and 3,000 jobs, respectively, over the past year according to the latest state data.
As recently as 2023, Oregon had been anticipating a surge of jobs in its semiconductor industry. Instead, Intel and some other large manufacturers have slashed thousands of jobs as these companies struggle with technological and competitive setbacks.
The soft labor market may have contributed to Oregon’s stagnant population growth, along with persistently high housing costs. Political initiatives to add housing have faltered amid elevated interest rates, concerns about high tax rates in the Portland area and a dismal perception of the region among real estate investors.
State economists were mostly upbeat in their quarterly forecast to the Oregon Legislature this month, citing unexpectedly high corporate income taxes that point to a resilient business sector. But they warned that many residents aren’t faring that well, citing a widening divide between the incomes of affluent people and the rest of the population.
“Accelerating income and wealth inequality could slow overall growth,” the economists wrote, “and undermine economic resilience.”
This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.