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Labor Day Report Shows Workers Have Little to Celebrate

News Release
September 2, 2001

Oregon workers not likely to recover recession losses as wages decline over last year

A new analysis of trends in wages, income, hours worked, and income inequality shows that Oregon workers do not have much to be excited about this Labor Day weekend. The analysis was released by the Oregon Center for Public Policy, a Silverton-based independent, non-partisan research institute.

In what has become an annual review of the status of workers in Oregon, the Oregon Center for Public Policy says this Labor Day workers should be concerned about both the short and long-term impacts of the economic slowdown.

"The short term job losses and layoffs are likely to have significant consequences for families and communities because Oregon's recession safety net is not strong and fails to protect many workers," said Jeff Thompson, an economist at the Center.

"The long term impacts will be even more damaging. Recent history teaches us that the cyclical upturns our economy produces have not been enough to bring economic prosperity and stability to working Oregonians," said Thompson.

The report, What's so Scary about a Recession? A Long-term View of the State of Working Oregon, documents that recent wage gains during the latter part of the 1990s were just high points in the long term decline of real wages for they typical worker. Moreover, Oregon's median household income in 1998-99 was just $40,322, not significantly different than the income in the late 1980s before the last brief recession.

"We've also shown that workers are working more hours to respond to declining real hourly wages," said Thompson. Working-age married couple families with children are working eleven more weeks per year than they did 20 years ago to make up for the declining wages, according to the study. Middle-income families added the greatest number of hours to their work effort, adding 810 hours, or 20 work weeks, between the late 1970s and the late 1990s.

"The economy has not been middle-income family friendly," said Thompson.

Increased hours for middle-income families offset the declining real wage over the last 20 years, but did not increase income. By contrast, the highest income 20 percent of families increased their work effort only slightly, but saw their inflation-adjusted incomes go up nearly $39,000.

"Income inequality has increased as families at the top captured nearly all of the gains from the last decade," said Thompson. "Working families will take a hit from our current slowdown. If the pattern of the last two decades continues, workers may not recoup the losses."

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