Changing Demographics: Central Oregon is Running Out of Employees

LaptopGuyOriginally published in the Bend Business Edition – April 2017

Karla Castillo
Karla Castillo

The good news: unemployment is down in Central Oregon. The flip side is a tightening labor market. As the boomer generation moves towards retirement, the demographics of Central Oregon are changing. The long-term trends are challenging but can be solved, according to Workforce Analyst Karla Castillo with the Oregon Employment Department. But in the short term, the region’s supply of available labor is shrinking.

Few can dispute the fact Central Oregon is experiencing a growth spurt. Recently released statistics from the Population Research Center at Portland State University (PSU), show Deschutes and Crook counties leading the state of Oregon when it comes to growth.

Deschutes Country grew at a rate of 3.5% or 5,895 residents from July 2015 – July 2016, while Crook County placed second with 2.3%, or 495 new residents. Looking at population gures for Bend alone, it remains the 11th largest city in Oregon with 83,500 residents, according to PSU estimates. The U.S. Census is more generous estimating Bend’s population at 87,014.

“From a macro standpoint, Oregon is growing fast,” said Castillo. “The [Central Oregon] region is growing at an even faster pace. The Central Oregon region already added back all jobs lost during the Recession.”

Bend is not only making up for what happened during the downturn. It is busting at its seam which has a direct impact on the unemployment statistics for the area. The current unemployment rate in Deschutes County is 4.4% (as of date of this publication). Think back only a couple of years ago and the number would have been a mirage in the high desert.

“[The labor market] is getting tighter, not only in the region but in the entire state and the trend has been going on for the last year,” said Castillo. “As the labor market recovers and the economy continues to grow, there are more challenges to nd quali ed workers.”

Deschutes County’s natural rate of unemployment is likely to be around 6 percent. The lowest unemployment rate before the recession in the Deschutes County was around 4.4 percent in January 2007.

“We don’t have much room to continue to grow at this pace and continue to fill all those jobs,” said Castillo, and adds there is still a little wiggle room. “The unemployment rate is expected to remain stable for the next couple of months, or maybe the entire year.”

Looking at workforce challenges from a supply-and-demand standpoint, there was an acceptable balance until the end of 2016. But according to Castillo, the demand currently outstrips the supply. The saving grace is an increased number of out-of-area applicants.

The population growth during the last ve years has come from migration, people moving into the area. Approximately 84% of the change in population from 2010 to 2015 was due to net migration, according to Castillo.

“We have a combination of different age groups of people moving into the area,” said Castillo. “Not only do we have an older population moving here, but we also have a younger group of workers coming in.”

Front cover, Bend Chamber Business Edition

At the same time, the baby boom generation is moving through the statistics like a giant wave. The group is defined as people born between 1945 through 1964, or seen in a different way, people between 53 and 72 years old. The first group of Boomers reached retirement age in 2011 and the number of retirees is only going to increase.

The two trends are merging in Central Oregon; an aging population and a net migration. And it has implications for the population demographics for the region, especially when it comes to the workforce, according to Castillo.

The aging workforce presents both opportunities and challenges. As boomers retire, younger workers are willing and able to ll those open opportunities. At the same time, the aging population needs additional services. Certain industries such as health care, social assistance, and the service industry will see an increased need for workers.