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On paper, wages in Oregon are rising rapidly. But anyone who’s been to the grocery store, gas station, or brewery lately can tell you that’s not all.
The state’s average private-sector hourly wage was $31.11 in February, according to new survey data from the Oregon Department of Employment. That’s up $1.82 from the previous year.
But taking into account annual inflation, which was 7.9% in February, workers in Oregon actually lost ground. They were actually earning less than a year earlier.
In Oregon, “real wages” fell 1.6% in February. Inflation-adjusted paychecks fell even faster nationally, down 2.6%.
Economists have many explanations for why inflation is at its fastest pace in four decades.
The crisis in the global supply chain is causing demand for goods to outstrip supply, driving up prices.
People emerged from the pandemic recession with more to spend, thanks to stimulus payments and rising wages. This gave retailers the opportunity to pass on some of their higher costs to shoppers.
And it’s not just supplies that cost more, workers too. Oregon has more open jobs than unemployed, forcing companies to raise wages to recruit staff.
These increases vary widely from industry to industry. Many lower-paying professions and in-demand jobs still outpace inflation.
Take Oregon’s hospitality industry, which paid an average hourly wage of $20.46 in February. This is an increase of 4.1% over the previous year, even after taking inflation into account.
David Cooke, statistics coordinator for the Jobs Department, said the rise in wages likely reflects the unique effect of the pandemic on hospitality jobs.
Restaurants, bars, and many other attractions closed completely in early 2020 when the state ordered mandatory closures to prevent the spread of COVID-19.
“Then when demand and conditions returned to normal, many workers had found jobs in other industries,” Cooke said. “So it’s hard to attract them back into the restaurant industry.”
Additionally, Cooke noted, work in hospitality and other relatively low-paying industries has benefited from the rapid increase in Oregon’s minimum wage. The hourly minimum has gone from $9.75 in 2016 to $14 per hour today.
Skilled jobs, such as construction and nursing, are in high demand and have boosted Oregon’s wages in their categories (up 5.2% and 4.1%, respectively, far outpacing wage gains national).
But Cooke said other factors could be at work. He notes that the number of people working in nursing and residential care facilities, a relatively low-paying job, has declined over the past year. With fewer jobs at the bottom of the pay scale, that means the industry average will be higher. Meanwhile, hospitals are hiring better paid nursing staff as quickly as possible.
The majority of industries in Oregon pay less, accounting for inflation. Manufacturing suffered the largest decline in adjusted wages, 4.8%, according to survey figures. This could reflect a peculiarity of the data, according to Cooke. In another measure, the manufacturers’ own reports on wages paid, he said wages appear to have slightly 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 posted strong wage increases over the past year. But Cooke warned that Oregon’s relatively low number of jobs in this segment could make the data unreliable, given that the category posted a 2.9% decline – after adjusting for inflation – at the end of the day. national scale.
Overall, 80% of workers are losing ground to inflation, according to federal data. And Cooke said Oregon’s wage data underscores the impact of inflation on what workers take home.
“Wage increases have increased significantly across most industries,” Cooke said. “But overall, wage gains have lagged consumer price increases.”