Recession may be over, but workers still face uncertainty about recovery

Labor Day 2002 was a holiday for working Oregonians, but in a year of chief executive officer and accounting scandals and arrests, continued high unemployment, and slow growth in the economy, the celebration was subdued, according to a Silverton non-profit research institute that studies how policies affect low- to moderate-income Oregonians.

"Too many Oregonians are still unemployed, and there is great uncertainty about the fate of Oregon's economy," said Jeff Thompson, an economist and policy analyst with the Oregon Center for Public Policy. "Most economic data show that the 2002 recovery has been timid and could dip back into recession."

"The short-term outlook for working people in Oregon is limited growth in employment and earnings," said Thompson. "Even more worrisome, the primary long-term trends in Oregon's economy suggest widening income inequality, more low-paying jobs, and de-unionization."

Thompson noted that in the 1990s Oregon had one of the fastest-growing economies in the nation. "An extended period of tight labor markets and a powerful boom in high-tech manufacturing helped bring real earnings and income gains to most workers," said Thompson.

"Unfortunately, the benefits of the boom were distributed very unequally, with those at the top of the income scale reaping most of the gain," said Thompson. "Additionally, the Portland area benefited most from the 1990s boom, leaving average earnings in the rest of the state well below historic levels," Thompson added.

Thompson says that high tech, which fueled Oregon's boom is also responsible for much of Oregon's bust. "Our economy is not diverse enough, and its main driver in the 1990s took much of the state over a cliff when it crashed," Thompson said.

Thompson noted that in recent years Oregon has ridden an economic roller coaster, and it is not clear what is around the next bend. "If the slow recovery of 2002 repeats the patterns of the early 1990s, then wage and income gains will not return for some time," he said.

The 1990s boom did not reverse long-term trends toward more low-paying jobs, greater income inequality, and declining unionization in Oregon. "If history repeats itself, the future is not bright for Oregon workers in this recovery," Thompson said.

Thompson noted, however, that the future does not need to be bleak.

"Oregonians have some clear choices ahead of them. They can vote to raise the minimum wage (Ballot Measure 25). They can turn Oregon into a leader in creating high-wage jobs by devoting resources to create model educational and job training systems that serve all Oregonians. They can organize unions to bargain collectively with their employers," he said.

"If Oregonians choose to take this high road, we will turn the tide on the problems plaguing Oregon's workers," Thompson concluded.

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