County mounts strong rebound from pandemic devastation
As of February 2022, Yamhill County’s total employment was 80 jobs above its pre-pandemic level of February 2020. In just under two years, the county had already recovered the nearly 5,800 jobs lost in the spring of 2020.
Much about this pandemic has been unprecedented, and that includes the speed with which jobs are recovering.
During the Great Recession, Yamhill County lost 2,790 jobs between its pre-recession peak and September 2010 trough. Although this job loss was much smaller, it took the county seven years to fully recover.
Yamhill County wasn’t alone in its rapid recovery from the pandemic. Other Oregon counties that now have employment above pre-recession levels include: Baker, Crook, Deschutes, Gilliam, Harney, Linn, Morrow, Wallowa and Wheeler.
With the exception of Deschutes and Linn, these counties are rural. In general, the more rural the county, the faster the recovery in Oregon — and vice versa, as Multnomah follows the pack.
It’s certainly different from what we experienced after the Great Recession, or the recession of the early 2000s. In both cases, employment recovered faster in Metro Portland than in other parts of the ‘State.
By May 2022, the state as a whole had recovered 90% of the jobs lost in the spring of 2020. But it fell short of a full recovery.
We now have employment data for Yamhill County through May. However, since our industry-level data is not seasonally adjusted, it is best to compare data from February 2022 and February 2020 to see where employment in the industry is today, compared to its pre-recession level.
Using the same month to compare gives us a better “apples to apples” look rather than comparing different months of the year, as seasonal changes could distort the picture.
We can see from the chart that manufacturing and leisure and hospitality are the two sectors where the largest employment gaps remain from pre-recession levels. It’s no coincidence that these are two of the three industries that have seen the largest job losses.
Private education services have also seen a sharp loss of jobs during the pandemic, but their level of employment has rebounded. Employment in this sector is now above its pre-recession level, albeit slightly.
Leisure and hospitality have certainly been the most visible sector affected by the pandemic. Restaurants account for more than 80% of industry jobs in Yamhill County, and they’ve been hit hard.
Between February and April 2020, Yamhill County recreation and hospitality employment fell nearly 50%, from 3,710 jobs to 1,890. Since then, it has added 1,540 of those jobs, or 85 % of what he lost, leaving him with 280 jobs.
Statewide, the recreation and hospitality rebound also stands at 85%. This is reflected in a slower-than-average recovery in coastal counties, where reliance on tourism is greatest.
Yamhill County manufacturing employment declined by 1,010 jobs in the spring of 2020, a 15% drop in employment. The county regained 880 or 87%.
Losses were concentrated in beverage manufacturing, food manufacturing and miscellaneous manufacturing, the latter including A-dec in Newberg and Meggitt in McMinnville. The sector remains 130 jobs below its pre-pandemic level.
Colleges and universities generally remain relatively stable during recessions.
However, some workers take time off to pursue their studies. As a result, two- and four-year colleges saw increases in enrollment during the Great Recession.
This could not have been less true during the pandemic recession. Statewide, enrollment has declined.
Yamhill County is home to two universities, so its private educational services sector has suffered heavy job losses. It cut 570 jobs, or 18%, from February 2020 to February 2021.
Some of this stemmed from the reduction in faculty and staff, but working students made up a large majority. When vaccinations were introduced and campuses began to resume on-campus learning, enrollment and employment began to recover.
In February 2022, Yamhill County private education employment was 200 above its pre-recession level.
The graph combines health services with private education. Health services remain down 90 jobs or 1.6%, split between hospitals, clinics and residential care facilities.
Other local sectors have joined to surpass their pre-pandemic employment.
The professional and business services sector added 100 jobs, up 4.8%; retail 120 jobs, up 3.3%; information 20 jobs, up 8.7% given its small size; financial activities 50 jobs, up 4.3%; other services 60 jobs, up 5.2%.
Other services is a sector that includes a diverse group of industries that do not correspond to other sectors. This includes religious, grant-making, and civic organizations; businesses that repair and maintain machinery and equipment; and personal care services, such as hair and nail care, massage therapy, and tattoo application.
Personal services saw huge job losses, with employment in 2020 falling from 252 in March to 90 in April. When the state reopened, it rebounded to 200 in July 2020 and has continued to rise ever since.
However, hiring difficulties persist.
Prior to COVID-19, Yamhill County’s unemployment rate remained below 4% throughout 2017, 2018, and 2019. By fall 2019, it had fallen to an all-time low of 3.1%. Employers have therefore faced a tight labor market for some time.
Almost overnight, unemployment soared. It reached 11.7% in April 2020, just below the all-time high of 11.9%, recorded during the Great Recession.
During the Great Recession, Yamhill County’s unemployment rate remained in double digit territory for all of 2009 and 2010 – 24 consecutive months.
In stark contrast, it rebounded this time as Oregon’s economy began to reopen in the summer of 2020. By October 2020, it was down to 5.9%, below its long-term average of 6.4%.
Local unemployment continued to fall through 2021. It fell below 4% in October 2021 and slipped to 3.3% in May 2022, just 0.2% below its all-time low.
Even though Yamhill County unemployment is approaching an all-time low, similar to where it was before the pandemic, there is one major difference: the number of vacancies employers are trying to fill.
The Ministry of Employment’s winter 2021-22 survey identified 100,000 job vacancies. The department’s winter 2019-20 survey only recorded 43,000 people, and there’s no reason to think things are any different in Yamhill County.
So many vacancies make it harder for employers to maintain, let alone expand, their workforce.
One of the measures of market tightness is the unemployment-to-vacancy ratio. In the winter of 2019-20, it was running 2 to 1. The 2021-2022 survey shows it is running 4 to 5, with vacancies actually outnumbering the unemployed pool.
At the height of the Great Recession, there were six unemployed for every job opening, representing a long chance for job seekers. Today, however, it is the employer who faces the long odds.
Another measure is Oregon’s labor force participation rate, calculated by adding the number of employed and unemployed residents in the labor force and dividing that figure by the 16-and-over share of the overall population.
The turnout fell to 59.2% in April 2020, thanks to the pandemic. It has steadily increased since.
The May report pegged it at 63.5%, the highest reading in 10 years. That compared to an also unusually high national rate of 62.3% for May.
Then there is the issue of inflation.
We are currently experiencing the highest inflation rate in 40 years. And historically, high inflation and low unemployment cannot coexist for long.
Many economists predict a recession. The best known is probably Larry Summers, former Secretary of the Treasury.
The Federal Reserve Board is certainly aware of this risk.
He raised interest rates in order to curb inflation, hoping he could slow the economy without pushing it into recession territory. Whether that can steer us towards the “soft landing” Federal Reserve Chairman Jerome Powell is aiming for remains to be seen.
In its baseline forecast, the Oregon Bureau of Economic Analysis predicts continued job growth through 2022, with Oregon reaching its pre-pandemic employment level by year’s end. . It also projects continued job growth in 2023 and 2024.
The nonpartisan Congressional Budget Office also predicts continued job growth nationwide in its May forecast. It forecasts that the US unemployment rate will remain below 4% through 2022, 2023 and 2024.
The bureau also expects inflation to decline. He projected a decline from the current 6.1% to 3.1% in 2023 and 2.6% in 2024 – approaching the Federal Reserve’s 2% target.
Of course, both of these predictions could be wrong.
Me and my fellow economists don’t have a good track record for predicting recessions. We seem to be much better at performing autopsies after the fact.
But right now, it looks like the tight labor market the county and state is currently experiencing is likely to continue, at least in the short term. There is no evidence of imminent change.
Guest writer Patrick O’Connor has been a regional economist with the Oregon Department of Employment for 20 years, covering the Mid-Willamette Valley counties of Marion, Polk, Yamhill, Benton, and Linn. Outside of work, his hobbies include rose growing, golf and guitar. He is from Corvallis and his wife, Stephanie (Moore) O’Connor, is from McMinnville. They settle in Corvallis with their daughter, Nora.