In this episode of Policy for the People, we discuss our recent report examining Oregon’s economic performance. As OCPP Policy Analyst Tyler Mac Innis explains, Oregon’s economy has done quite well over the long haul, outperforming that of most other states.

Oregon’s main economic challenge is not the lack of prosperity, but the lack of shared prosperity — the fact that most of the benefits produced by the economy are flowing into the hands of those at the top.

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Transcript

[We make this transcript available for your convenience and to increase the accessibility of our content. The transcript was generated by software and was slightly edited for clarity. If you are able to, we encourage you to listen to the recording.]

Juan Carlos: Sometimes focusing on the short term, paying attention only to the most recent data can give a distorted sense of reality.

To identify the main trends to reveal the biggest problems facing our society. It often helps to use a wide lens. It helps to take the long view. That’s certainly true when it comes to assessing Oregon’s economic performance. Recently, my colleague at the Oregon Center for Public Policy, Tyler Mac Innis, and I did just that. We wrote a fairly meaty report, taking a look at the long term view of Oregon’s economy and to explain what we found.

I recorded a conversation with Tyler. Tyler is a policy analyst at the Center. As you’ll see from our conversation, the story of Oregon’s economy is one of both good news and bad news. The good news is that over the long haul, Oregon’s economy has performed quite well, growing faster than that of most other states. The bad news, however, is that most of those gains have bypassed the majority of Oregonians.

In other words, what truly ails Oregon is not the lack of prosperity, but the lack of shared prosperity. I began my conversation with Tyler by asking him to explain the main takeaway of the report. Here’s what he said.

Tyler: We titled the report Oregon’s Economy Strong Growth, Uneven Gains. And I think that that’s the core takeaway, right? When we look back at the data over the last two and a half decades or so, we see Oregon’s economy faring quite well by a number of metrics, whether we’re looking at overall economic growth, growth and productivity, wage gains.

And we can get into some of those findings. But when we look across these economic metrics, we see Oregon’s economy faring quite well relative to the national average and and compared to most states. But those gains from that economic growth haven’t been shared evenly. We see an increasingly unequal economy over that same period of time.

So when we look ahead like what the next chapter of Oregon’s economy should look like, it’s really a focus on shared prosperity that needs to be at the forefront of policymakers’ minds.

Juan Carlos: So let’s dig into some of those figures, and let’s talk about that. How Oregon’s economy has been doing over the long haul. How would you describe that performance?

And can you talk about the specific indicators that that the report covers?

Tyler: Sure. So we looked at Oregon’s economic performance by a number of different metrics. And specifically we’re looking at the long term from about 1997 to 2024. And that’s kind of the period of time where data is broadly available to look at these factors. When we look at things in terms of economic growth overall, we see Oregon’s economy from 1997 to 2024 grew by 111%, outpacing the national rate of 89% during that time and ranking Oregon 12th amongst all states across the country and overall economic growth.

When we look at that growth on a per person basis or per capita gross domestic product, you sometimes hear it referred to, Oregon ranked seventh across the country among all states in terms of per capita GDP growth from 1997 to 2024. So we see, you know, as a state economy fares quite well relative to other states at those top line economic growth figures.

We also look at in the report, we look at productivity growth, right. How much stuff, how many goods and services are organ workers actually producing. And from 1997 to 2024, we see tremendous productivity growth in Oregon. In fact, we ranked sixth amongst all states across the country in terms of productivity growth during that time.

The report looks at some other factors as well. One of the things I think that’s important to note is we’ve seen strong wage growth in Oregon, particularly since Oregon implemented its minimum wage law in 2016. We’ve seen real gains for workers, especially at the bottom in the middle of the wage ladder since 2016. And that’s really a direct result of lawmakers choosing to raise the state’s wage floor.

So when we look at a number of these broad economic indicators, we see that Oregon fares quite well.

Tyler: I wonder if you can say more about this issue of wages and how Oregon’s wage growth compares to the rest of the nation. Wages are where families really feel it in their pocketbooks. How much money is coming in in their paychecks? And if Oregon is outperforming the nation in terms of wage growth, that seems like a good sign.

Tyler: It is a good sign. And, you know, so when we look at the data from 2016, when Oregon lawmakers, you know, passed Oregon’s minimum wage increase, which phased in over a number of years between 2016 and 2025, we see wages at the bottom 10th percentile.

So the lowest earning 10th of all workers in the state. We see their wages grow in inflation adjusted terms by nearly 27%. Workers at the national level at that same bottom percentile saw their wages grow by about 21% over that same period of time. So we see low wage workers in Oregon seeing real wage gains, outpacing the gains of those at the national level.

And for the Oregonian in the middle or the median worker, we saw real wage gains of about 16% over that same period of time, again outpacing the national rate of about 11.7%. So those are real gains and real wins for Oregon workers. The other side of that story, of course, is we’ve seen real increases in the cost of living right for families during that time.

The cost of housing, childcare, food, utilities, all of these things have grown. And so while those wage gains are real and they’re important and they’re wins for those workers, we still see many families are struggling to get by. And all of this is happening during a time where we’re seeing increased income inequality and more of the gains of our economy flowing to folks at the top.

Juan Carlos: The figures you’ve been mentioning, economic growth, productivity, growth, wages. This is a look at the long term over the past two and a half decades, roughly. But how are we doing in the more recent period? How has Oregon’s economy performed over the past few years?

Tyler:  Yeah, we get into this in the report. I think the reality is that Oregon’s economy in the near term has certainly faced real challenges, and that our economic growth has been less robust over the last several years, particularly since the onset of the Covid 19 pandemic.

But when we dig into those reasons as to why, you know, we find a number of external factors being at play, namely, shifting federal trade policies, some business decisions of major employers here in Oregon that haven’t panned out and have led to major job losses, and the very real impacts that the Covid pandemic had on Portland as the biggest economic metro area in our state.

So there’s a number of these external factors at play that just don’t align with this dominant narrative. We’ve been hearing in the press that it’s our state tax code or state policymaking that is slowing Oregon’s economic growth. When we look at that broader set of factors, we really see those external factors, those things outside of state policy making.

As some of the major contributors to why our economy has struggled in recent years.

Juan Carlos:  I wonder if we can drill down into those factors that you mentioned, and maybe you can say more about tariffs that are impacting Oregon’s economy, and why they are impacting Oregon more than other states?

Tyler: Yeah, well, I think fundamentally right, Oregon is an export oriented state.

We rely more on exporting goods and services to other places to other countries than most other states do. Right. We’re a coastal state. We have businesses here in Oregon that are really reliant on shipping their goods to China or Canada or Mexico or other countries across the world. And our state economy grows as a result of exporting those goods and services.

With the first Trump administration delivering a series of shifts in trade policies, particularly starting in 2018, and then in the more recent the second iteration of the Trump administration, having, you know, again, shifting tariff regimes and things that seem to to change overnight, it makes it really hard for Oregon businesses to plan around these, these changing trade regimes.

So it makes it more susceptible to shocks in global trade. And so as a result, we’ve seen some real hits to our state economy as a result of these growing and shifting trade wars at the federal level.

Juan Carlos:  If you’re just joining us, you’re listening to Policy for the People. In this episode, we’re taking the long view of Oregon’s economy. I’m speaking with my colleague from the Oregon Center for Public Policy, Tyler Mac Innis, and we’re discussing the findings of a report that we co-wrote titled Oregon Economy Strong Growth, Uneven Gains.

The other factor that you mentioned was a couple of key employers not doing so well. Can you talk to us about that, who these employers are and what we’ve been seeing in terms of how their businesses have been affected and what that means.

Tyler: Yeah. So these are namely job losses from Intel and Nike. And we should note at the onset here that Intel and Nike are two companies that enjoy tremendous tax advantages here in the state of Oregon. For years and years now, our state has been giving these companies, you know, tremendous tax deals to ensure they remain located here in Oregon and hire here in Oregon.

But these companies have made business decisions in recent years that have still resulted in significant job losses that have ripple effects throughout our economy. Intel, for instance, there’s some well documented reporting that we cite in our report. They kind of missed the boat on some of the semiconductor development that is, you know, central to this AI boom that we’re experiencing right now.

They’ve been catching up to some extent, but they have been having to play catch up. And as a result, they’ve laid off thousands of workers in recent years. Nike, similarly, has made business decisions in recent years that have not panned out, resulting in significant job losses at their company. And when we look at these two together, we see about a third of all major layoffs in our state have come from those two companies alone.

And of course, those companies aren’t operating in a vacuum. There are other businesses in Oregon that rely on selling their goods and services to Intel and Nike to do well. So these job losses at Intel, Nike have spillover effects into the broader economy. So we see what these two companies here in Oregon, these two major employers that, you know, business missteps, things that, you know, they took a bet on and it didn’t pan out.

But those have real impacts on the broader state economy. And those are decisions that were made outside the scope of state policy making.

Juan Carlos: The third point that you mentioned that helps explain Oregon’s underperformance in the near term was the impact of the pandemic on Portland. I was in Portland during the pandemic. I remember it being a very rough period. Tell us about how the pandemic impacted Portland and what that meant for or against the economy.

Tyler: I think the impacts of Covid, there are many and they are layered. I think, you know, one of the biggest ones in my mind is kind of the reputational hit that the city of Portland took during that time. I mean, there were very real challenges facing our state economy from the very necessary public health mandates to have folks stay at home.

That had real impacts on things like tourism, our restaurant industries, things that are really driving factors in our local economy in Portland. But we also had these, you know, we had months of racial justice protests in the wake of the murder of George Floyd. We had the Labor Day wildfires, where Portland had some of the worst air quality in the world for a period of time.

We saw the implementation of Measure 110 that decriminalized small possession of small amounts of drugs. We saw that kind of play out in a public narrative at the national level, that Portland was becoming this, this lawless city that I think, you know, all of these things together really did have some impact on Portland’s reputation.  It has ramifications for folks wanting to come visit and go to our great restaurants in Portland and enjoy the outdoors and all that the city and the surrounding area has to offer.

So I think those were real hits to the local economy.

Juan Carlos:  I want to go back to a point you mentioned earlier, which is one of the core takeaways from the report. Looking at Oregon’s economy is that the main economic problem that we face right now is economic inequality, the vast inequality that has arisen over the past few decades.

Why is this the core challenge that Oregon faces?

Tyler: This is the fundamental challenge facing our economy. In Oregon. Income inequality has grown relatively unabated since about 1980. That’s a national trend too. It’s important to note, but the trend is very much true here at home. When we look at data from the Department of Revenue here in Oregon from 1980 to 2023.

These are inflation adjusted numbers. The Oregonian in the middle, the median Oregonian has seen their income grow by about 15% over that time. Think about how the cost of housing, childcare, food, utilities, all of the basics have grown just in recent years, let alone over the last 40 plus years. So while we’ve seen some real and modest gains for the folks in the middle, the cost of living have really eaten up any gains that they’ve seen for The Oregonian at the very top.

So the top one tenth of the 1%, this is the richest one in every 1000. They’ve seen their inflation adjusted incomes over that same period grow by about 347%. So when we look at Oregon’s economy, it’s growing. It’s just that the gains from that growth are overwhelmingly flowing to the folks at the top. And in fact, we look at national data in 2025, there’s this measure called the labor share. So it looks at all the income gained at the national level. And it looks at what percentage of that income is gained in the form of wages. Right. So like people who are actually working for a wage, the labor share of income fell to 53.8% in 2025. Nationally. That’s the lowest that that figure has been on record with the Bureau of Labor Statistics.

So this is a national problem, but very, very much one that we need to solve for in Oregon. And we will not solve for it by cutting taxes on folks at the top. And for corporations who are doing tremendously well, if the labor share, as you say, has fallen, what does the data show in terms of where the rest of the money has gone?

The rest of the money really flows to capital. So folks who are earning money through other means, through passive, passive sources, right? So think of folks who are earning their money through owning stocks, right? Selling shares of companies and collecting a gain in that way. Or maybe they own property and are renting their property and earning income in a passive form that way.

But it’s flowing to these more passive ways of earning money, rather than folks who are working for a wage or working for a salary. And so it’s an important measure to keep in mind, because it really does help us identify how how money is flowing towards folks at the top who predominantly make their their money in these more passive ways and away from folks throughout the rest of the income ladder, who are more often to be working for a wage to get by.

Juan Carlos: Tyler, I wonder if, if you can talk about the link between the rise of economic inequality and the fact that many families are struggling to afford the basics of life? Yeah. I mean, we hear a lot of the contemporary discourse of the affordability crisis, which is very real. Right? Like, increasingly, families are finding it difficult to afford the basics.

I mean, just look at the cost of gas prices at the pump just in the last several months. So there are very real affordability crunches facing working families across the state right now. And when we look at inequality, you know, had income inequality stayed at the levels it was at in 1980, The Oregonian in the middle would be earning nearly $130,000 a year.

Instead, they were earning about $49,000 in the most recent data. So the fact that we’ve seen a greater and greater concentration of income for folks at the top, at the expense of Oregonians in the middle and throughout the rest of the income ladder, has real implications for their ability to put food on the table to pay their, you know, their rent or their mortgage, to pay their utility bills, what have you.

So there are very real implications in terms of the ability for Oregonians just to meet their basic needs. I also think there’s, you know, there’s a broader economic argument to be made to there’s research that shows that growing inequality undermines economic growth, right? Lower income families, middle income families are more likely to spend the money that they earn in the local economy right to, to meet their basic needs.

You know, maybe to go out to a movie with the kids or something like that, right? But they’re spending money in their community. When families don’t have that money to spend, it’s stymies economic growth. There’s research that shows that growing inequality can not just stymie that economic growth, but it can stymie innovation, right? In kind of growing into new sectors of our economy.

So it can really damper our long term trajectory as a state economy. But there’s all sorts of other ills that come from growing economic inequality. We see, you know, the rise of chronic illness has been linked to growing inequality in our country. And there’s even research showing that growing extreme inequality can lead to democratic societies shifting to more authoritarian governments.

And so it across the board, no matter how you’re looking at it, growing inequality is bad for all of us, even for folks at the top. And so it is really incumbent on state policymakers to to really focus in on how are we going to address that fundamental economic challenge as we look to the next chapter in Oregon’s economy?

Juan Carlos: If you’re just joining us, you’re listening to Policy for the People. I’m speaking with my colleague from the Oregon Center for Public Policy, Tyler Mac Innis, and we’re discussing the findings of a report that we co-wrote that examined how Oregon’s economy has been performing over the past several decades, and what the data reveals about the real economy challenges facing Oregonians.

Here’s the rest of our conversation.

Tyler,  earlier this year, Governor Kotek appointed a group to recommend ways to make Oregon more competitive. This group, it’s called the Governor’s Prosperity Council, is made up almost entirely of people from the business community, from the corporate sector. A few weeks ago, a memo was leaked that had a draft summary of the Prosperity Council’s recommendations.

What kinds of things were in that draft summary, and what are your thoughts on the ideas coming out of the Prosperity Council?

Tyler: As we’re recording this, we’ve only seen this draft memo that’s been leaked to the press. So there is a lot of detail that we still need to see.

I think there’s some things included in this list of ideas that may pan out to be perfectly reasonable concepts, but there are several things in this list of ideas that should really raise alarms for folks who are concerned about growing inequality and the lack of shared prosperity in our state economy. You know, the draft set of recommendations calls for things like reducing taxes on folks at the top, which as we’ve been talking, the folks at the top are doing tremendously well and capturing the gains of our state economy.

Cutting their taxes isn’t going to build a path towards having greater shared prosperity in our state. It’s not going to enable us to do things like investing more in higher education. So we have a highly skilled workforce for employers to hire here, or getting something like universal pre-K to be a statewide program. Right? Those things cost money.

And so we’re not going to cut our way to investing in systems like that. There’s also, I think, just a lack of detail that is a little concerning. You know, the memo calls for reducing state regulations by 20% by 2032. It doesn’t really explain which regulations or why we’re cutting them. There’s this theme of tax cuts for the rich and corporations and deregulating industries.

That’s the typical corporate playbook that we’ve been living with for decades now. So in a lot of ways, it really does feel just kind of a rehash of the same policy ideas we’ve been living under from the business community for a number of decades now, and those haven’t led to widespread economic prosperity for Oregonians as a whole.

And so I don’t know why they would now. And so I think we really need to be thinking more broadly and more holistically about what are the real paths forward to building the systems that will enable all Oregonians to share in our state’s growth and enable our state economy to continue to thrive for the next several decades? And what are those policies that could turn things around?

Juan Carlos: If you were advising Governor Kotek, what policies would you recommend that she pursue?

Tyler:  If what we want is to improve the lives of Oregonians. I think there’s a whole host of things that we need to be looking at as a state. I’ll speak to the items we identify in the report, but just naming that there are broader sets of things that we need to be looking at as a state economy.

But I think when we think about the path forward, first and foremost, we think about increasing the collective power of workers. So making it easier for workers to join a union if they so choose. Protecting their right to organize. Expanding that right to organize to industries that have historically been carved out of that right. Also, looking at tools like a workforce standards board, which would allow the state to set industry level wage and workplace standards to protect folks who are working in harder to organize industries.

We also should be looking at fixing our tax system and making it more fair. We hear a lot about Oregon being a high tech state, but the reality is that when you add up all the taxes paid at the state and local level, it’s the lowest earning Oregonians who are paying the highest share of their income in taxes.

So we need to be looking to find ways to ask folks who’ve enjoyed the gains of our economy, the rich here in Oregon, to contribute more to the state. Good. And find ways to lower taxes on hardworking Oregon families who are feeling that affordability crunch. And then I think the last area of focus that I would really encourage the governor and her team to really think about is what are the systems that we can invest in that create more economic security and opportunity for as workers, but also their families?

So thinking about how do we invest more in our public school systems from pre-K up through higher education, right. Like, let’s find ways to invest in our public education system as a whole. So that Oregon is graduating really skilled workers into the workforce. Let’s make Oregon a place where employers want to hire folks who are graduating out of Oregon’s public universities.

We need to be investing more in health care, transportation, modernizing our utility grids so that we’re not seeing, you know, utility bills spiking through the roof for working families. There’s a whole host of things that we need to be looking at investing in at the state level that make Oregon a more economically secure place for Oregon families in their work. But also have greater opportunity for Oregonians as a whole

Juan Carlos: That seems like a good place to end it. Tyler, thank you so much.=

Tyler: Thanks, Juan Carlos.

Juan Carlos: And thank you for listening to a Policy for the People. We will see you next time.