Do people follow jobs?


1111_DoPeopleFollowJobs_01Population and employment have always had a symbiotic relationship. A growing population creates a need for goods and services. A surge in hiring, such as when a new company sets up shop, can create demand for workers from outside the area, boosting the local population. Generally, a change in either can’t be sustained without a similar change in the other.

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By Brandon Sawyer

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Population and employment have always had a symbiotic relationship. A growing population creates a need for goods and services. A surge in hiring, such as when a new company sets up shop, can create demand for workers from outside the area, boosting the local population. Generally, a change in either can’t be sustained without a similar change in the other.

In another example, an increase in California’s population will lead to more healthcare needs and more California nursing jobs.

While most agree that more jobs are a good thing, opinions are often mixed on whether population growth is desirable. Newcomers, both legal and undocumented, are sometimes accused of stealing jobs, driving up the cost of living, and putting a strain on resources and services.

But with just 40 persons per square mile in 2010 compared to 87 nationwide, Oregon is the 12th least densely populated state. It depends on newcomers to grow. An expanding population is part and parcel of an expanding economy. New residents need a place to live, which boosts the rental market and makes work for homebuilders. They add consumers to the local service economy and bring money, skills and knowledge. Others start or invest in businesses that create jobs.

But how effectively does population growth create jobs and how much does the job market influence those who migrate here? Does employment drive population, or vice versa? With conspicuous legions of unemployed swelling during our recent “jobless recovery,” Oregon demographers and economists readily admit that employment remains the main driver of migration in and out of the state. But with unabated advancement of communications and technology, as well as limited pools of talent for key occupations, highly skilled employees increasingly dictate where they live and work based on quality of life, climate, family ties and other non-job factors.

 


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This is an age-old quandary for demographers and economists, says Jason Jurjevich, assistant director of Portland State University’s Population Research Center (PRC). “There’s evidence for both but you probably could say with some certainty that more recently people are driving job location versus the earlier paradigm where jobs drove where people lived.”

In the past, workers stayed with a single employer for their entire career, and living-wage jobs, like those once found in Oregon lumber mills, did not require a college degree. Labor was more fixed to the location of the employer, reinforcing the bond between population and employment. But as relations between workers and employers have become shorter term, and as higher-skilled workers have gained leverage, migration has had less to do with jobs.

“We can’t find enough people,” says Trevor Betenson, controller and HR manager for Palo Alto Software in Eugene. The company, which develops and sells business-planning software, moved from Palo Alto, Calif., in the mid-1980s seeking cheaper labor and rent. Rents are still far below Silicon Valley rates, but the local talent pool of programmers is too small for the company’s needs, he says.

Nearly all of the 40 or so employees are in Eugene and arrived there before being hired. Betenson has tried hard to recruit from outside the area, but says, “Most people aren’t willing to move here if they don’t already live here. Most just don’t want to relocate, period.”

 


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In the big picture, Jurjevich says, regional restructuring of the economy, de-industrialization, and workers who can bring their intellectual capital wherever they choose, have “made people more footloose.” Technology and communications have fostered a “perceived reduction of distance” convincing more of them to work thousands of miles from home and still feel close.

Jurjevich’s PRC colleague, state data center coordinator Charles Rynerson, cautions that employment still has the upper hand. “Some people are lucky enough to bring their own jobs with them, but there’s a limit to that,” he says. “If the number of jobs created by employers declines, it’s unlikely for population growth to continue at the level it was at during times of expanding job opportunities” His point can be seen in the flow of net migration (in-migrants minus out-migrants) during the economic expansion and contractions of the last decade.

“It’s easy and quick to cut jobs during a recession,” says Nick Beleiciks, state employment economist of the Oregon Employment Department, “but population changes aren’t quick. 2006 was our fastest year of population growth as the economy added jobs. Those people stuck around as the economy cut jobs.”

While the state population grew 12% from 2000 to 2010, total employment fell 1.1%. On balance, about 250,000 people migrated to Oregon in those years, joining young native Oregonians entering the workforce. But employment fell about 18,000 in the same period. Compare this to the 1990s when the population grew 20.4% and employment rose 28.8%.

Beleiciks explains the jobs shortfall this way: “In 2000 we were at a high point in the business cycle and then 2010 is a low point in the business cycle. That will make the numbers look small.”

 


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In 2006, net migration was almost 43,000, the biggest surge of new residents in a decade. And in 2007, the state had 1.7 million employees, the most ever. By 2010, more than 130,000 jobs were lost and the flow of in-migrants slowed to a trickle. Net migration was just 6,344, the lowest level since 1986 when a net of more than 30,000 people fled another recession then afflicting the state.

Between 1979 and 1982, total employment plummeted 94,900 or 9%. Between 2007 and 2010, it dropped 131,400 or 7.6%.

“For Oregon the early ’80s recession was probably worse than the recession we just went through,” says Beleiciks. “What we ended up seeing was population loss during the early 1980s .”

The out-migration was so severe that natural increase (births minus deaths) couldn’t make up for losses and the total population declined those three years. No such loss has occurred in the wake of the recent recession, but 2009 and 2010 were the first years in more than 20 that in-migration contributed less to the population than natural increase. Still, net out-migration is unlikely in the near term since overall this year the unemployment rate is going down. “I would be very surprised if we had population decline in the near future,” says Rynerson. As for getting the jobs back, the state Office of Economic Analysis forecasts a return to 2007-level peak employment in 2014.

A sustained uptick in jobs would roll out the welcome mat to the young and restless people who make the cogs of the economy turn, starting families and businesses, patronizing local small businesses and revitalizing the workforce.

Most people migrate when they are in their late teens to mid-20s, says Jurjevich, “People are graduating from college, they’re entering the workforce, they’re going into the military and so jobs still remain the No. 1 reason why people move in those age groups.” Secondarily they might consider proximity to family and friends, climate, quality of life, cost of living, crime, schools and their attachment to where they grew up.

 


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Bryan Fix, head of human resources at SolarWorld, ramped up hiring in 2008 for the country’s largest solar manufacturing plant in Hillsboro. He recruits from around the country, particularly Midwesterners with high-volume automation experience. He’s moved about 15% of hires from outside the state. Perhaps 10% of the company’s engineers are foreign, mostly Europeans brought in to seed the plant with their advanced solar knowledge. “For long-term livability [Oregon] does pretty well,” says Fix. “It’s usually a big selling point.”

Assuming employers like SolarWorld keep hiring, Oregon’s natural beauty, recreation, quality of life and other pluses will remain a lure to prospective newcomers from across the world as the economy grows ever more global.

Looking ahead to the next decade, Jurjevich points to Census forecasts that U.S. population growth will continue to outpace other industrialized nations and that 60% of the population will live in the South and the West by 2030.

“Combining those two things together,” he says, “I think it’s a pretty safe assumption that the Oregon population is going to continue to grow into the near future.”

Brandon Sawyer is the research editor for Oregon Business. He can be reached at [email protected].


 

 

Shifts within Oregon and the region

While statewide population rose 12% and employment fell 1.1%, people and the lack of jobs did not spread uniformly across the state over the last decade. Five counties ended up with fewer people than they started with and 10 had employment growth above 10%.

Central Oregon and Portland Metro gobbled up three-fourths of the population’s entire natural increase (births minus deaths) and nearly two-thirds of its net migration (in-migrants minus out-migrants). Deschutes County grew fastest (49.1%, adding 56,683), but Washington County added the most (19.6%, adding 87,278).

While moving into the city has become more popular even for people working in the suburbs, Washington County and Clark County, Wash., (92,576) still added more people than the more urbanized Multnomah County (69,654).

“Portland is doing an incredible job of encouraging infill,” says Charles Rynerson, state data center coordinator at PSU’s Population Research Center (PRC), “but as long as there is still vacant land that’s available for new housing there’s going to be growth in the suburbs.”

The suburbs scored even better for jobs. Multnomah County lost 1.4% of its employment base over the decade, but Washington County grew employment 7.1% and Clark County grew 11.3%, adding 19,000, more jobs than any county in Oregon.

Of the newcomers to the city of Portland though, PRC assistant director Jason Jurjevich says they are more educated but below the national average in terms of per capita income. “It poses a concern to economic development officials,” he says but “income is not the only factor people will consider in terms of staying within a place.”

Rynerson notes that Portland’s 25-64 age demographic expanded. “It’s a lot of people in that age group being added in Multnomah County … that’s a population that’s largely in the labor force.”

In Central Oregon, Deschutes County gained 10,000 employees over the decade, while almost 50,000 people relocated there. “It may be a case of population growth driving job growth,” says Nick Beleiciks, state employment economist at the Oregon Employment Department. “People were moving to Bend and that created need for housing and jobs.”

The Coast’s 5.3% employment growth outpaced its 2.9% population growth, dragged down by a natural decrease of almost 5,000 people. “The Coast is gaining more people of working age, especially those over 45 years, and having less growth in the population of children,” says Erik Knoder, Employment Department regional economist. “I wouldn’t be surprised if it is happening in many rural areas.”

Three Eastern counties — Baker, Grant and Wallowa — lost population over the decade along with two Central counties — Gilliam and Sherman, which both increased their employment by more than 15%. Beleiciks attributes that to wind farms.

Oregon grew faster than the nation, 9.7%, but neighboring states Nevada, Idaho and Washington increased population at 35.1%, 21.1% and 14.1%, respectively. Only California at 10% grew slower.

“Our proximity to California is always a big factor,” says Rynerson. It “has almost 10 times as many people as Oregon. Some tiny fraction of them that move here each year doesn’t make a dent on their population, but it has a big impact on ours.”

On the other end of our migration flow sits Washington: “Year after year, the top state we get people from is California and the top state we lose people to is Washington,” says Rynerson. “It’s been that way for at least 30 years.”

Washington employment grew only 2.4% over the decade but still bested Oregon’s loss. Its unemployment rate has been lower than Oregon’s for the last 14 years and 20 of the last 30. So if migrants were seeking a job first, the Evergreen State has an advantage.

 

 


 

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