Job Growth

Indicator: 
Net employment growth by industry and minority-owned businesses.
Outcome(s): 
Business prosperity.
Significance: 

Employment growth measures the rate that a region’s economy is generating jobs for those who want to work. It is also a general indicator of a region’s economic vibrancy. However, region-wide averages of job growth sometimes fail to identify specific challenges and problems because job growth does not occur evenly across industry sectors or across the region. The pace of the job creation is measured by looking at how much the local employed workforce has grown (or declined) in relative terms. Employment provides the main source of income and the only opportunity for asset accumulation for most people (Hull, K., 2009). However, job growth is a coincident or lagging indicator of the state of the economy because workers are hired as and after the economy improves and are laid off as and after the economy deteriorates.

Data (click image for interactive version): 

Percent change in annual average employment, Portland MSA and United States, 2002-2013

Source: US Bureau of Labor Statistics, Current Employment Statistics
Notes: Not seasonally adjusted

Percent change in total employment by industry, Portland MSA, 12 month periods, 2012-2013

Source: Oregon Employment Department, Current Employment Statistics

Percent change in total employment by industry, Portland MSA, 12 month periods, 2011-2012

Source: Oregon Employment Department, Current Employment Statistics

Number of employees at minority owned businesses, Portland MSA, 2002 and 2007

Source: US Census Survey of Business Owners
Notes: NH stands for non Hispanic

Finding & Trends: 

Previous to the current recession, the Portland-Vancouver-Hillsboro Metropolitan Statistical Area (MSA) showed strong growth relative to the United States as a whole. Employment growth in the Portland MSA was very strong from mid-2003, as we recovered from the last recession, until May of 2008, when employment peaked before beginning its current steep dive. The region was hit harder by the recession than were similar MSAs.

Seven of the eight core sectors in the Portland MSA experienced growth in the number of employees between December 2012 and December 2013. Professional and Business Services experienced the largest growth, with an increase of 3.2 percent, followed by retail trade which experienced an increase of 1.2 percent. The total number of non-farm jobs increased by 1.6 percent (15,900 jobs).

Of businesses owned by minorities, Asian owned businesses employed the most workers in 2007. That year, Asian owned businesses employed 19,232, an increase from 14,765 in 2002. In 2002, African American and Black owned businesses and American Indian and Native Alaskan owned businesses employed roughly the same number of workers (1,519 and 1,603 respectively). Five years later, African American and Black owned businesses employed 2,777 workers while American Indian and Alaskan Native owned employed just 1,603 workers.

Driver(s): 
Employment growth must keep up with population growth to ensure that residents can find jobs
Using the indicator to drive change: 

Not all sectors of the economy lose or gain employment at the same rate. Some industries are, by nature, more cyclical than others, some are counter-cyclical and some recessions disproportionately affect certain sectors (like the dot com bust in 2001-2003) (Javalgi, R., et al, 2005). In the past, the economies of both the Portland MSA and Oregon have been very cyclical. Attracting and growing diverse sectors can stabilize the economy (Malizia, E. and Shanzi, K., 1993). Targeted investments in education and training can prepare the population to enter growing employment sectors (Blundell, R., et al, 1999).

Methodology: 

Each month the Current Employment Statistics (CES) program of the Bureau of Labor Statistics surveys about 150,000 businesses and government agencies, representing approximately 390,000 individual worksites, in order to provide detailed industry data on employment, hours, and earnings of workers on nonfarm payrolls for all 50 States, the District of Columbia, Puerto Rico, the Virgin Islands and over 300 metropolitan areas and divisions.

Employment data refer to persons on establishment payrolls who receive pay for any part of the pay period that includes the 12th of the month. Persons are counted at their place of work rather that at their place of residence; those appearing on more than one payroll are counted on each payroll. Establishments are classified in an industry on the basis of their principal product or activity in accordance with most recent North American Industry Classification System Manual.

Survey of Business Owners data have been collected every five years since 1972, for years ending in “2” and “7,” as part of the economic census. The program began as a special project for minority-owned businesses in 1969 and was incorporated into the economic census in 1972 along with the Survey of Women-Owned Businesses.

To design the SBO sample, the Census Bureau uses the following sources of information to estimate the probability that a business is minority- or women-owned:

  • Administrative data from the Social Security Administration.
  • Lists of minority- and women-owned businesses published in syndicated magazines, located on the Internet, or disseminated by trade or special interest groups.
  • Word strings in the company name indicating possible minority ownership.
  • Racial distributions for various state-industry classes and racial distributions for various ZIP Codes.
  • Gender, ethnicity, race, and veteran status responses of a single-owner business to a previous SBO or to the 2000 Decennial Census.

These probabilities are then used to place each firm in the SBO universe in one of nine frames for sampling:

  • American Indian.
  • Asian.
  • Black or African American.
  • Hispanic.
  • Non-Hispanic white men.
  • Native Hawaiian and Other Pacific Islander.
  • Other (a different race was supplied as a write-in to another source).
  • Publicly owned.
  • Women.

The SBO universe is stratified by state, industry, frame, and whether the company has paid employees. The Census Bureau selects large companies, including those operating in more than one state, with certainty. These companies are selected based on volume of sales, payroll, or number of paid employees. All certainty cases are sure to be selected and represent only themselves (i.e., have a selection probability of one and a sampling weight of one). The certainty cutoffs vary by sampling stratum, and each stratum is sampled at varying rates, depending on the number of firms in a particular industry in a particular state. The remaining universe is subjected to stratified systematic random sampling.

Metro Business Patterns provide the same data items and layout as do County Business Patterns. Metropolitan and micropolitan statistical areas (metro and micro areas) are geographic entities defined by the U.S. Office of Management and Budget (OMB) for use by federal statistical agencies in collecting, tabulating, and publishing federal statistics. The term "Core Based Statistical Area" (CBSA) is a collective term for both metro and micro areas. A metro area contains a core urban area of 50,000 or more population, and a micro area contains an urban core of at least 10,000 (but less than 50,000) population. Each metro or micro area consists of one or more counties and includes the counties containing the core urban area, as well as any adjacent counties that have a high degree of social and economic integration (as measured by commuting to work) with the urban core.

The geography for job growth is the Portland-Vancouver-Hillsboro, OR-WA Metropolitan Statistical Area (MSA) which includes Clackamas County, OR; Columbia County, OR; Multnomah County, OR; Washington County, OR; Yamhill County, OR; Clark County, WA; and Skamania County, WA.  Please note that the geography used varies across different indicators.

Metadata

Disclaimer: 
This indicator is based on information from credible sources. However, changes in collection methods and statistical procedures that have occurred over time may affect the data presented. Limitations that are acknowledged by the sources are noted below. Nevertheless, caution should be taken when interpreting all available data.
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