The Oregon Center for Public Policy, a Silverton-based public policy research organization, released data this Labor Day weekend on the status of Oregon’s working families. The data comes from “The State of Working America 1998-99,” a study by the Washington, D.C.-based Economic Policy Institute (EPI), released Sunday. The data shows that the typical Oregonians’ wages and income have declined while the gap between Oregon’s highest income families and Oregon’s lowest income families has grown.
The study’s key findings on the status of Oregon’s working families are:
- Oregon Median Family Income Continues to Decline. The typical four-person family in Oregon was worse off in 1996 relative to 1989. Adjusted to constant 1996 dollars, median family income declined by $2,752 from 1989 to 1996. This decline continues a trend from the 1980s; the typical four person family’s income declined by $4,707 from 1979 to 1996, adjusted to 1996 dollars. The income of the median family is a key indicator of the economic well-being of the typical family. The median family is a family at the midpoint of family income distribution (one-half the families have more income, one-half the families have less income).
- Income Inequality Grows in Oregon. The study shows that in the late 1970s Oregon’s richest 20 percent of families had incomes, on average, 6.6 times the income of the poorest 20 percent. By the mid-1990s the wealthiest fifth of Oregonians had incomes 9.4 times those at the bottom fifth.
- Average Wages Start to Grow While Typical Oregon Family Wages Decline. Oregon’s job growth in the 1990s exceeded the national average but job growth does not necessarily equate with higher living standards for most working Oregonians. Although average weekly wages grew substantially in the 1990’s (5 percent from 1989 to 1996), they failed to make up for wages lost in the 1980s (8 percent decline from 1979 to 1989). Adjusted to constant 1996 dollars, the average weekly wages in 1979 were $536, while they were only $520 in 1996. Average weekly wages reflect changes in hours worked and changes in hourly wage rates, and they combine the earnings of very highly paid workers with those of low-wage workers, making them unrepresentative of the typical worker’s labor-market experience.
Median hourly wage trends assess the wage trend of a typical worker. The typical Oregon worker’s wages decreased from 1989 to 1997. By 1997, the typical (median) worker in Oregon earned $1.01 less per hour than in 1989.
- Unemployment and Underemployment are high for Oregon women with limited education. The unemployment rate for women aged 18 to 35 with less than a high school degree is 14.9 percent. The unemployment rate for women with a high school degree is 7.6 percent. The overall unemployment rate for Oregon was 5.8 percent in 1997.
Underemployment for 18 to 35 year old Oregon women with less than a high school degree is 28.4 percent. Underemployment for 18 to 35 year old Oregon women with a high school degree is 16.1 percent. Underemployment adds discouraged job seekers and the marginally employed (persons working part-time involuntarily and those who sought work in the past year but are not currently seeking work for other reasons such as the lack of child care) to the unemployed.
Charles Sheketoff, Executive Director of the Oregon Center for Public Policy offered the following comments on these findings.
- The OCPP on declining wages of typical Oregon family: “The decline in the typical worker’s wages was softened by Oregon’s minimum wage increase, which started in 1997. The increase helped sustain the wages of low-wage workers in Oregon while those in neighboring states fell sharply,” said Sheketoff. In 1996, Oregon voters raised Oregon’s minimum wage from $4.75 per hour to $5.50 per hour on January 1, 1997, $6.00 per hour on January 1, 1998, and $6.50 per hour on January 1, 1999. “It is important to continue to increase Oregon’s minimum wage to reverse the decline in the typical Oregonian’s hourly wages,” he added.
- The OCPP on growing income inequality gap: “The growth in income inequality is the underlying factor driving the income problem for the typical Oregon family,” said Sheketoff. “Oregon’s rich are getting richer, while the rest get poorer.”
- The OCPP on high underemployment among women with less than a high school degree: “Women leaving welfare may face a permanent recession,” commented Sheketoff. “Although they may find work, that work may not be permanent, and the prospects for income growth are bleak.”
Sheketoff noted that the underemployment figure was much lower for women with a high school degree. “The vast majority of families on public assistance are headed by single mothers. It should be the policy of every human services agency to make sure that there are no barriers between these mothers and their diplomas or their GEDs.”
“The education of welfare recipients can play an important role in increasing their prospects for success in the labor market. Underemployment for women with a high school degree is 7.6 percent, about half the rate of underemployment for women with less than a high school degree (14.9 percent).”
The Oregon Center for Public Policy is a Silverton-based, nonpartisan research group that analyzes budget and tax issues and government programs, and their impacts on low to moderate income Oregonians.
The Economic Policy Institute is a nonprofit, non-partisan economic think tank based in Washington, D.C. Founded in 1986, EPI seeks to widen the debate about policies to achieve healthy economic growth, prosperity and opportunity in the United States. Institute founders include Lester Thurow, Robert Reich, Ray Marshall, Barry Bluestone, and EPI president Jeff Faux. To order copies of The State of Working America 1998-99, contact EPI at 1-800-EPI-4844. The executive summary and introduction to this report will be available on-line September 6th by visiting EPI’s World Wide Web site at http://www.epinet.org