Inflation is outpacing Oregon wages: Here’s how the top industries compare

This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. See past installments here.

On paper, Oregon wages are rising rapidly. But anyone who has been to the supermarket, fuel station or brewery recently I can tell you that is not the whole story.

The state’s private-sector median hourly wage was $31.11 in February, according to data from a new survey by the Oregon Employment Department. That’s an increase of $1.82 from the previous year.

But factoring in annual inflation, which was 7.9% in February, Oregon workers lost ground. Indeed they earned less than a year before.

In Oregon, “real wages” fell 1.6% in February. Inflation-adjusted paychecks fell even faster nationwide, by 2.6%.

Economists have plenty of explanations for why inflation is running at its fastest pace in four decades.

The global supply chain crisis has demand for goods outstripping supply, driving up prices.

People emerged from the pandemic recession with more to spend, thanks to stimulus payments and rising wages. That gave retailers the flexibility to pass on some of their higher costs to shoppers.

And it’s not just the supplies that cost more, but also the workers. Oregon has more open jobs than unemployed peoplewhich forced companies to increase wages to hire staff.

Those increases vary considerably across industries. Many low-paying professions and in-demand jobs continue to outpace inflation.

Take for example the hotel industry in Oregon, which paid an average hourly wage of $20.46 in February. That’s 4.1% more than a year earlier, even after taking inflation into account.

David Cooke, statistics coordinator for the employment department, said the increase in wages likely reflects the unique effect of the pandemic on hospitality jobs.

Restaurants, bars, and many other attractions closed completely in early 2020 as the state ordered mandatory closures to prevent the spread of COVID-19.

“Then when demand and conditions returned to more normal, many of the workers had found work in other industries,” Cooke said. “So it’s hard to get them back into the restaurant industry.”

In addition, Cooke noted, hospitality work and other relatively low-wage industries have benefited from rapid increases in Oregon’s minimum wage. The hourly minimum has risen from $9.75 in 2016 to $14 an hour today.

Skilled jobs like construction and nursing are in high demand and have pushed up Oregon wages in their categories (up 5.2% and 4.1%, respectively, both easily outpacing national wage gains) .

But Cooke said other factors may be at play. She notes that the number of people working in nursing and residential care facilities, a relatively low-paying job, has dropped in the last year. With fewer jobs at the bottom of the pay scale, that means the industry-wide average will be higher. Meanwhile, hospitals are hiring higher-paid nurses as fast as they can.

Most Oregon industries are paying less, after accounting for inflation. Manufacturing suffered the biggest drop in adjusted wages, 4.8%, according to the survey figures. That could reflect a quirk in the data, according to Cooke. By another measure, manufacturers’ own reports on wages paid, said wages appear to have modestly outpaced inflation over the past year.

On the other hand, the “other services” category (which includes repair and maintenance work, religious organizations, and other small categories) appears to have shown strong wage gains in the past year. But Cooke cautioned that the relatively small number of Oregon jobs in that segment could make the data unreliable, given that the category showed a 2.9% decline, after adjusting for inflation, nationally.

Overall, 80% of workers are losing ground to inflation, according to federal data. And Cooke said the Oregon wage data underscores the cost inflation is taking on what workers take home.

“Wage increases have increased substantially in most industries,” Cooke said. “But overall, wage gains have been less than consumer price increases.”

–Mike Rogoway | mrogoway@oregonian.com | Twitter: @rogoway |

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