The state’s economic development agency is trying to figure out how to orchestrate an equitable recovery
Oregon’s latest economic forecast paints a rosy picture of the state’s recovery. Wages have grown and household spending is strong. In a year, employment is expected to be fully recovered.
But not everyone is enjoying a robust recovery, which is something Business Oregon, the state’s economic development agency, aims to fix.
This summer it secured a $1 million grant from the federal Economic Development Administration to make that fit. That money enabled the state to enlist the help of ECONorthwest in crafting a roadmap to an equitable recovery.
Officials don’t yet know, however, what that should look like.
“We’re still working to define what we mean by an equitable recovery,” said Michael Held, a regional development officer who’s co-managing the project.
The big question is whether the state should try to fix long-standing inequities in the economy or whether it should aim to get Oregon’s economy performing at pre-pandemic levels, Held said.
Planners are gathering data and talking to officials at chambers of commerce, trade groups, economic development organizations, businesses both big and small along with nonprofits, foundations and tribal leaders around the state. They’ve held forums and had one-on-one conversations on the state’s economic sectors, from manufacturing to high tech to the hospitality industry.
The agency is also soliciting comments through a survey.
Some sectors, like high tech, have experienced a robust recovery, Held said. That’s not true for manufacturing or hotels and restaurants.
The hospitality industry employs many ethnic and racial minorities, which is one reason why Blacks and Hispanics were hit hardest during the pandemic, according to Lorelei Juntunen, vice president of operations at ECONorthwest.
“That is also the area that’s been one of the slowest to recover, because people are still finding their way back to restaurants, and they’re still in the process of reopening,” Juntunen said.
Though officials are only about mid-way through their outreach, some themes have emerged.
“There are a number of issues that we continually hear about and they include child care, workforce and housing,” Held said.
The shortage of affordable child care and housing were problems in the past but now economists realize they are important for a recovery.
“The pandemic really helped us to understand why and how they’re completely integral to economic growth,” Juntunen said. “Without those it is very, very challenging for our economy, not just to recover, but to grow at all. So it creates an imperative to figure out how to focus on addressing some of those structural issues if we want to have an economy that’s more equitable in the future.”
In terms of child care, the situation is much worse than it was before the pandemic. Facilities closed and those that reopened have scaled back to ensure social distancing, Juntunen said. That’s made it difficult for people to commit to regular work schedules.
“The story that we’re hearing is that people are either quitting or just are not actively looking for work because they can’t find reliable child care,” she said.
Need for well-paid jobs
An equitable recovery will also hinge on creating more living wage jobs.
“If people are making good wages, they’re better able to afford housing, child care (and the) cost of goods,” Held said.
In the past, economists have focused on median-wage incomes. Those have been going up, Juntunen said.
”That absolutely should be underscored and celebrated,” Juntunen said. “But we should also be paying attention to income inequality, which is we’re still working on making sure that we understand exactly how that has changed as a result of the pandemic. At first blush, it does not really appear to be improving.”
Another challenge that became more apparent during the pandemic is a shortage of workers. The Baby Boom generation is now retiring but there are not enough people to replace them.
“We absolutely need to be focusing on workforce development and training,” Juntunen said.
That’s something that Gov. Kate Brown is working on. At the Oregon Business Council’s summit on Monday, she said she plans to ask the Legislature for $200 million for workforce training.
“The goal is to make sure that we remove barriers, that we provide support and wraparound services, particularly for folks in our historically underserved communities, folks who are coming out of prison, young people who are disconnected,” Brown said at the summit.
The money would be used for training, apprenticeships, career programs at community colleges, workforce boards and subsidies for child care, housing and transportation.
Training will not be enough, however. Oregon also needs more people.
“We just don’t have enough bodies in the state to fill all the jobs,” Juntunen said. “We’re going to need to figure out how to bring new people into the state.”
A lack of affordable housing is a big barrier to attracting people to Oregon, she said.
The pace of Oregon’s recovery is in line with California and Washington state. But Idaho’s economy has taken off, according to a chart by ECONorthwest that looks at covered employment, or jobs that qualify for unemployment. These exclude private contractors.
With federal pandemic subsidies waning, many business owners are worried about the future. Besides the workforce shortage, they face supply shortages.
“I think the big question everyone is grappling with is whether those supply chain issues are going to work themselves out or whether that’s a lasting effect,” Juntunen said.
She said a big investment in workforce training would help along with industry support, like providing more loans, for example.
But the state also has to figure out how it can help with housing and child care.
Business Oregon expects to finish its interviews by the end of the month. It will then come up with recommendations. The plan is supposed to be finished by February.
The state can use it to seek more federal money.
Agency officials said the overall objective is to improve the lives of all Oregonians.
“We’re trying to create an ecosystem and a business environment that will allow us to recover and to move forward,” Held said. “I think that’s what folks should expect, and there’s a lot of work that we have to do to get there.”
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