"Prosperity in Perspective" on Labor Day

News Release
August 14, 2000

New Report Finds that Recent Wage and Income Gains Fail to Reverse Two Decades of Decline for Oregon Workers

Despite Oregon's recent economic expansion, the typical Oregon worker is no better off this Labor Day than ten or twenty years ago, according to a new report released on the holiday by the Oregon Center for Public Policy. Wage and income gains in the late 1990s have not reversed two decades of decline.

The report, Prosperity in Perspective: The State of Working Oregon 2000, provides a comprehensive study of the status of working Oregonians. The report presents a wide variety of new data on family and household income, wages, hours worked, housing affordability, income and wage inequality, taxes, unemployment, health insurance, the changing quality of jobs, hunger, and poverty as it examines the living standards of working Oregonians.

"In the last few years there have been encouraging developments in wages. Incomes are up, and even health insurance coverage is greater than 10 years ago, but the typical worker has yet to make up ground lost in the 1980s and early '90s," said Jeff Thompson, an economist and policy analyst at the independent research center.

"Over the course of the 1980s and 1990s Oregon experienced widening income inequality and an increase in the percentage of jobs paying low wages," said Thompson. "Only Oregon's most affluent have reaped the full benefits of economic expansion. The typical worker is still playing catch-up," he added.

The study found that in 1999 Oregon's median hourly wage of $11.98 was still two percent lower than in 1989 and nine percent lower than in 1979. Similarly, family incomes have risen since 1997, but only to levels of the late 1970s and late 1980s.

"The average working household in Oregon is working 278 more hours each year than in 1979-80. That's almost seven more weeks just to break even," said Thompson.

"Not only have the wealthiest Oregonians reaped the lion's share of the benefits of our economic expansion, but poor and low income Oregonians have not benefited greatly from the recent economic boom" said Michael Leachman, policy analyst.

"The poverty rate among working families with children increased substantially over the 1990s, despite two increases to Oregon's minimum wage," noted Leachman. "By the late 1990s, one in seven working families with children lived in poverty. The poverty rate among Oregonians – working and non-working – was flat over the last 20 years."

The report's analysis of Census data from the late 1990s shows that the vast majority of poor families with children – 87 percent – have an adult who works. "By and large, poor families are working families," said Leachman.

Researchers also analyzed data used in last year's USDA study that pegged Oregon with the highest rate of hunger in the nation and the sixth highest level of food insecurity. The OCPP researchers assessed the work effort among the food insecure and hungry.

"In the late 1990s, more than one in nine of all working households in Oregon were not always sure of being able to meet their food needs," said Leachman. "In about 40,000 working households, with incomes up to almost twice the poverty level, Oregonians were actually going hungry," he added.

The report assessed housing affordability, health insurance coverage, changes in the job market, and the state's tax system from the perspective of Oregon workers:

"The gains of the late 1990s are partly due to factors likely to change in the short-term, such as the tight labor market. The setbacks of the last generation, are due to factors more likely to remain with us over the long term – increasing income inequality, growth in low-pay industries, and declines in unionization," said Thompson.

"The report can help Oregonians determine who needs help from tax reform in an era of economic prosperity. Before Oregonians vote to give tax breaks to the wealthiest with little or no benefit to the majority of Oregonians, they need to know who has benefited most from the economic prosperity, and who has not," said Thompson.

Thompson noted that the new data on health insurance coverage should impact Governor Kitzhaber's effort to create universal coverage. "Our data and analysis shows that the trend in employer provided coverage is not as rosy as the Oregon Health Plan policy office has led Oregonians to believe," said Thompson.

"This report is designed to stimulate public discussion and to encourage the reader to take action and to make informed decisions," said Thompson.

"If Oregonians make the proper policy choices, the increasing share of workers in poverty, hunger despite work, and growing income inequality can become facts of history and not indicators of the present," said Thompson. "The study's findings should give new impetus for creative ways to manage Oregon's 'new economy'," said Thompson.

The Oregon Center for Public Policy is a non-profit, non-partisan research and education institute established to assist low- and moderate-income Oregonians by expanding the debate on a variety of fiscal issues.