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Jobless in paradise

Portland artwalk

The scene at Portland art walk. (Gail Shaffer, Shaffer Fine Art Gallery)

Northwest unemployment may be stabilizing — rates in Washington and Oregon leveled off in April — but the jobless rate is still above the national average, particularly in Oregon.

Yet the number of people seeking work continues to rise, even compared to a year ago. People are not abandoning the Northwest workforce and moving to regions where jobs are more plentiful. That may be good news for the region once the economy stabilizes.

Unemployment in Washington remained at 9.1 percent for the second month in a row, and Oregon’s was at 12.0 percent, up from 11.9 percent in March, according to state employment agencies. The national average for April is 8.9 percent, up from 8.5 percent in March.

As the jobless rate has climbed, many states with severe losses have shed workers who went looking for better economic climates; not so in the Pacific Northwest. Oregon has 3 percent more in its workforce than a year ago, and Washington 2.5 percent more than a year ago. “I’m left scratching my head about why is that labor-force growth going up,” Tom Potiowsky, Oregon government’s chief economist, told The Oregonian> a month ago. “Are we going to see that level off? That’s my expectation.”

That leveling-off didn’t happen in April. Oregon’s labor force continued to increase, even before the end of school terms. And Oregon economists continue to scratch their heads, wondering why the jobless rate continues to be so high, The Oregonian reported after last week’s figures were released.

Potiowsky and others speculate that Oregon’s liveability is attracting people who will move to the state — or remain in the state if a job ends — and wait for things to get better. The same speculation may apply to Washington, which has a more robust and diversified economy and also many of the same quality-of-life lures as Oregon.

“People are choosing a place to live, and then they will find employment,” Portland economist Joe Cortright believes, and increasingly urban areas like Portland and Seattle will be lures for the most sought-after element in the workforce, talented and educated people in that 25-34 age cohort. “In the time between their 25th and 35th birthdays, these young adults not only start careers, but find mates, start families, and put down roots. Once rooted in place, the likelihood of their moving to another state or metropolitan area will decline precipitously.”

Cortright, who is a nonresident fellow of the Brookings Institution and also chairs Gov. Ted Kulongoski’s council of economic advisers, calls this target population “The Young and Restless,” which is less a soap-opera title than a description of what he and co-author Carol Coletta found in their study of young and mobile young people.

When the economy eventually rights itself, it must deal with changes in the American workforce. Cortright points to three major workforce characteristics of the last 30 years that will either flatten out or decline in the next 20 years: Baby Boomers will retire, the percentage of women in the workforce has leveled off, and the number of college students also appears to have stabilized.

As the nation’s population ages, the number of Americans age 25-34 living in metropolitan areas declined by 8 percent in the 1990s. Since 80 percent of Americans now live in what the Census Bureau defines as a metropolitan area, this is a critical demographic.

By contrast, Portland’s metro area, a seven-county region including Clark County, Wash., grew its college-educated population of 25-34-year-olds by 50 percent in the 1990s, the fourth-highest growth rate in the nation, and the growth was most dramatic closest to the core city. “Young adults generally and college-educated 25 to 34 year olds in particular are disproportionately represented in close-in Portland neighborhoods — residents within three miles of the city center are 50 percent more likely to be 25 to 34 years old,” Cortright reported.

Young people who locate in Portland cited quality of life as a magnet, listing “the city’s size, walkability, public transportation, bike-friendliness, distinctive neighborhoods and independent businesses as contributing to a feeling of community, manageability, and safety.” Cortright’s study used 2000 census data with interviews collected in 2004, but he said in an interview that the trends he reported show no signs of decline five years later.

In the last two decades Portland’s central area has changed dramatically in terms of housing, businesses, entertainment, and ease of transportation. While the city’s long-established residential neighborhoods are familiar to any visitor who hasn’t been in the city for 20 years, downtown and Northwest Portland and close-in areas of East Portland seem closer to a European city than a traditional Northwest city.

Portland’s qualities recently drew raves from Matt Gross, who blogs as the New York Times’ Frugal Traveler. “Amid economic catastrophe — Oregon has the country’s second-highest unemployment rate — there was a general indifference to wealth,” Gross found. “In its place was a dedication to the things that really matter: hearty food and drink, cultural pursuits both high and low, days in the outdoors and evenings out with friends. It’s the good life, and in Portland it still comes cheap.” Young people who can “couch surf” with friends, afford a bike and a bus pass, can live cheaply in the urban center while looking for work.

The attraction of Portland’s urban core offsets some of the state’s serious problems, particularly a declining quality of education, both K-12 and in higher education, due to ballot initiatives and loss of revenues owing to the recession. Young immigrants may not have children ready for school, and they often have their degrees in hand, from outside Oregon. “We have the benefit of what other states are doing in higher education,” says Cortright. On the other hand, graduates of Oregon schools face serious competition with incomers from across the country.

Seattle’s metropolitan census area, seven counties with 61 percent of the state’s population, has similar characteristics, and the percentage of young people with college degrees is even higher than in Portland (34.2 percent to 29 percent). Seattle’s job market is better, and more of the jobs require higher education. Despite cuts in budgets, Washington’s higher education system remains in better shape than Oregon’s, where the state universities are now public in name only. Both states need to improve education from K through Ph.D. in order to compete in a world in which companies like Microsoft must look overseas to find talent and there are almost no jobs in sawmills and fish plants.

If Cortright’s studies accurately reflect the reasons educated young workers seek out a location, Seattle’s efforts in mass transit, developing a green economy and liveable in-city communities, will be critical to the area’s economic future. But neither city can base an economy entirely on quality of life, and even the most dedicated will last only a limited time on couch surfing and microbrews.

Oregon in the last 20 years has lost many of its corporate headquarters, and the natural-resource economy outside the Willamette Valley has steadily declined — more factors driving young people into the cities. Some of the decline has been countered by an influx of “equity retirees,” who sold overpriced housing in California and figured to retire (often early) comfortably in a place like Bend or Ashland. But the term “Equity Retiree” won’t be a big factor in the state’s economy anytime soon.

Given the changing demographics of the workforce — the last of the Boomers, little or no increases in the percentage of women in the workforce or in college degrees — the ability of the Northwest to draw talented young people attracted by quality of life will be critical to our economic future. Our two major metro areas have much in place to make the case, but green and funky is still no substitute for jobs when the immigrants arrive.

Our tax systems make it easier to build things than to build programs, so a city with a world-class transit system must still attract superior teachers. And a city with first-rate sports arenas must also support cutting-edge research laboratories.

The nature of our immigration and the nature of our natural environment give us an edge as we look to economic recovery. But much is left to do, if that edge is not to become dulled.

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