The Oregon Employment Department (OED) hosted a Zoom video conference on Wednesday, Nov. 15, to discuss the current state of the economic and workforce-related trends in Oregon, the tax contribution rates upcoming in 2024 and news from Paid Leave Oregon.
The meeting featured speakers Gail Krumenauer, a state employment economist, David Gerstenfeld, the OED director and the Oregon Paid Leave director Karen Humelbaugh.
Krumenauer began by delivering statistics about the state of Oregon’s labor force, specifically the rates of job gains and losses over the past month. In October, the overall unemployment rate was 3.5%, which is .2% higher than it was in Oregon in July and August, though lower than the US unemployment rate which sits at 3.9%.
Broadly, the dynamic of monthly job growth has changed over the past year after two years of consistently having job gains month after month,” Krumenauer said. “Oregon has a net gain of jobs in half of the year and theres a net loss in the other half.”
The overall number of non-farm payroll jobs (private and government sectors) dropped by 4,600 jobs, while leisure and hospitality services (hotels, restaurants and bars) lost 1,500 jobs. The sector with the largest amount of jobs lost was professional and business services with a loss of 1,600 jobs.
In terms of job gains, the largest reported gain came from construction employment which hit an all-time high with 123,000 jobs gained in October.
Despite the recent slowdown in job growth as compared to years past, Oregon employers have still added about 44,000 jobs over the past year—an overall increase of 2.3%.
Private healthcare and social assistance accounted for one out of every three jobs that were added equating to 16,300 jobs gained or an increase of 6%.
The industry with the greatest job loss was Oregon’s manufacturing sector which lost about 4,400 jobs or a 2.3% decrease to the labor force. This industry has two main sections, durable and non-durable goods. The durable goods sector had an overall gain of 500 jobs within the past year while the non-durable goods sector lost 4,300 jobs.
The overall size of Oregon’s labor force has declined by around 40,000 people in 2023 with the main reasons for this revolving around demographic changes, specifically the amount of retirements, according to Krumenauer. Despite this downturn, Oregon’s labor force numbers have stabilized with October representing the first uptick in 2023.
In addition to retirements, another contributor to Oregon’s difficultly with filling job openings is the low unemployment rates.
“At any given time within the first nine months of this year, Oregon’s private employers had about 71,500 jobs openings,” Krumenauer said.
While this rate is down from the more than 100,000 job opening peaks seen during 2021 and 2022, the current rate is still well above the pre-pandemic rate. This has been the norm for the last several years as Oregon has often had more job openings than those who are unemployed with the best being a 1: 1 ratio of job openings to unemployed people, the current rate.
“It’s still a tight labor market where it’s hard for employers to find enough workers to fill all the vacancies out there, “ Krumenauer went on.
Between January and September, employers identified six out of 10 job openings (around 43,000) as hard to fill. Reasons sited indicated the biggest hurdle to hiring was a lack of job applicants due to record low unemployment.
Other reasons reported by employers as to why they were having issues filling jobs included 37% of employers reporting having little to no applicants and another 26% reported a lack of qualified candidates, meaning those whole applied lacked the needed education and experience requirements.
The third issue reported revolves around unfavorable working conditions or working overnight, on-call, temporary work as well as working outdoors accounted for 7% of all hard to fill job openings.
When taken together, this equals to around seven out of 10 job openings being considered difficult to fill. These issues are reminiscent of 2019’s rates when there was also low unemployment, though now it is larger in scale.
Krumenauer also noted that the primary reason Oregon’s labor force has grown faster than the US labor force over the past few decades is a result of immigration to the state and how slowdowns in immigration creates an additional crunch in terms of having enough available workers.
The next speaker, Gerstenfeld, discussed the Oregon tax contribution rates for 2024 to the Oregon unemployment trust fund as well as the Paid Leave Oregon trust fund.
These tax contributions, gathered from employer payroll taxes fund the unemployment trust which in turn pays for unemployment benefits to Oregon workers when they are out of work through no fault of their own. Workers do not pay into this fund or into their unemployment benefits.
The unemployment fund is self-balancing—an account that creates the correct amount of debit or credit to offset the original entry reducing the chance for error—which has helped it become one of the healthiest in the nation, according to Gerstenfeld. This trust also earns interest which continues to lower Oregon employer’s tax rates.
Gerstenfeld went on saying the unemployment insurance tax for new employers will rise slightly in 2024 from the current rate of 2.1% ($50,900 per employee) on taxable wages to a rate of 2.4% ($52,800 per employee) on taxable wages.
The main reason, Gerstenfeld continued, was due to the growth in wages in 2022. These higher wages created higher weekly benefit payouts in 2023 for unemployment insurance. Higher benefits amounts pushed Oregon into the next tax schedule for 2024.
According to Gerstenfeld, Oregon’s unemployment trust fund has done so well that it has taken in less taxes than it anticipates paying out suggesting that the rate of unemployment currently experienced will not stop anytime soon.
For the paid leave Oregon tax contribution, the rate for 2024 will remain the same as it was in 2023, 1% of an employee’s wages. This tax is applied to all those making over $168,600.
Both employers and employees contribute to the paid leave Oregon trust fund, with employees paying in 60% and employers filling in the remaining 40%, which pays out paid leave benefits for Oregon workers and assistance grants to small businesses.
The last speaker for the event, Paid Leave Oregon director Humelbaugh, began by listing the number of applications for paid leave (29,513) and how 21,507 (73%) were approved.
Humelbaugh noted that the main reasons for those who were denied paid leave were due to a lack of eligibility, the requestor did not meet the wage requirements for paid leave, they were already covered by an employer’s equivalent plan as well as issues with fraudulent requests.
Humelbaugh also noted the growing issue with fraudulent paid leave requests.
While no breaches of data have been logged by the unemployment and paid leave departments, they did suggest the number of fraudulent requests was “significant.”