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ECON orthwest
E CON 0 M I C S . F I NA NeE . P LAN N I N G
Phone. (541) 687-0051
FAX. (541) 344-0562
info@eugene.econw.com
Suite 400
99W.1othAvenue
Eugene, Oregon 97401-3001
Other Offices
Portland. (503) 222-6060
Seattle. (206) 622-2403
20 March 2003
TO:
FROM:
SUBJECT:
Greg Winterowd
Bob Parker
WOODBURN OCCUPATION/WAGE FORECAST
BACKGROUND
In 2001, ECONorthwest and WPS completed an Economic Opportunities Analysis
(EOA) for the City of Woodburn. The EOA included a local economic development
strategy that was adopted by the Woodburn City Council. That strategy requires
substantial amendments to the City's planning documents, including justification for
an Urban Growth Boundary expansion.
In early 2002, Winterbrook Planning (Winterbrook) began work with the City to
prepare the necessary pIan amendments and findings to justify the UGB expansion.
As a part of Winterbrook's preliminary work, ECO developed revised population and
employment forecasts. To supplement previous work conducted by ECO, Winterbrook
requested ECONorthwest complete additional research on three issues:
1. The impact the City's economic development strategies will have on household
Incomes;
2. Demand for non-residentialland implied by the revised employment forecast;
and
3. Site needs for industries targeted as part of the City's economic development
strategy.
This memorandum addresses the first task: the impact the City's economic
development strategies will have on household incomes. The second and third tasks
are addressed in separate memoranda.
METHOD
The Oregon Employment Department collects wage data for occupations. To match
occupational wage data to the employment forecast for Woodburn, we had to convert
employment by industry in the forecast to employment by occupation. To make this
conversion, the Oregon Employment Department provided ECONorthwest with data
estimating 2000 employment by occupation for each industry in Workforce Analysis
Region 3, which consists of Marion, Polk, and Yamhill County. (That is the smallest
geography for which the data is available.) The occupational employment data also
includes a forecast of occupational employment by industry for 2010.
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20 March 2003
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ECONorthwest grouped occupational employment by industry into occupational
employment by the seven economic sectors used in our employment forecast for
Woodburn: Agriculture, Industrial, Retail, Service, Education, Government, and Other.
The industries included in these sectors (as defined by their Standard Industrial
Classification at the two-digit level) is shown in Table 1.
Table 1. Industries included in sectors
used for Woodburn employment forecast
Sector SICs
Agriculture 00-09
Industrial 10-14,22,24-39
Retail 52-59
Service 48-49,60-67, 70-81, 83-89
Education 82
Government 91-94
Other 15-17, 19-20,23,40-47, 50-51, 95-99
Total
Source: ECONorthwest.
Once we had occupational employment by sector, we calculated the percentage share
of total employment in each sector by occupation. Woodburn's total employment by
sector was then applied to the distribution of employment by occupation to estimate
employment by occupation in Woodburn. Forecast 2020 employment in Woodburn by
sector was applied to the forecasted 2010 distribution of employment by occupation.
This method captures some of the expected shifts in occupational employment.
ECONorthwest did not have enough information to reasonably project occupational
employment to 2020.
Estimated employment by occupation in Woodburn for 2000 and 2020 was then
matched to occupational wage data provided by the Oregon Employment Department.
That data includes an estimate of the annual income supported by the mean wage for
each occupation based on full-time employment. That annual income estimate was
used to show the distribution of Woodburn's employment by annual income range in
2000 and 2020.
By matching current occupational wage data to forecast occupational employment in
2020, this method shows the projected future income distribution in constant year-
2000 dollars. By using current occupational wage data, this method implicitly does
not reflect any expected shifts in relative occupational wages (wages in some
occupations will grow faster or slower than wages for all occupations).
Figure 1-1 shows the steps in estimating the wage ranges. We note that uncertainty is
compounded with every step in the process. The process begins with the County-level
employment forecasts by the Office of Economic Analysis (OEA). ECO then used the
OEA forecast as a control total to estimate employment in Woodburn. An additional
margin of error is introduced when the City total is disaggregated into industrial
sectors. Each industry may include a range of occupations; each occupation has a
range of wages. Our point is that the margin of error of the wage distributions could be
as large as 100%.
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20 March 2003
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Figure 1-1. Methods to develop wage distribution estimate
DAS County-
level Employment
Forecast
City of Woodburn
Employment
Forecast
City of Woodburn
Sector-level
Employment
Forecast
City of Woodburn
Occupation Forecast
for Each Sector
City of Woodburn
Wage Dist. By
Occupation
Marion County
New jobs
2000-2020:
36,199
New jobs
2000-2020:
7,139
(medium
estimate)
Error
Margin
The purpose of this analysis is to develop a better idea of the relationship between
future jobs, incomes, and housing affordability in Woodburn. To our knowledge,
Corvallis is the only other City that has attempted this level of analysis to estimate
wages for each of its forecasted additional employees.1 Our conclusion is that the data
do not support being able to do this kind of analysis with any greater confidence than
what we have described.
Moreover, the available data sets do not allow a direct empiricallinkage between job
growth and housing affordability. The missing factor is the relationship between wages
(earned by individuals) and total household income (many households include more
than one wage earner). Thus, the best we can do with this analysis is to develop a
forecast of the wage distribution implied by forecasted job growth in Woodburn.
RESULTS
ESTIMATED WAGE DISTRIBUTION
Table 2 shows the estimated annual income distribution of occupational employment
in Woodburn in 2000 and 2020. This table shows that occupations that support an
1 That work was completed by ECONorthwest in 2000.
Parker to Winterowd
20 March 2003
Page 4
annual income of $20,000-$29,999 are expected to have the largest share of total
employment growth (38%), followed by occupations supporting an income of $30,000
to $39,999 (17%). It also shows that the share of workers in occupations with incomes
above $20,000 will increase, while the share of workers in occupations with incomes
between $10,000 and $19,999 will decrease.
Table 2. Annual income distribution of estimated occupational
employment in Woodburn, 2000-2020 (2000 dollars)
Annual Income 2000 2020 Change % Change
< $10,000 0 0 0 0%
$10,000 - $19,999 3,112 3,993 881 28%
$20,000 - $29,999 3,539 6,328 2,789 79%
$30,000 - $39,999 1,369 2,678 1,309 96%
$40,000 - $49,999 1,062 1,982 920 87%
$50,000 + 956 1,826 870 91 %
Unknown 1,201 1,861 660 55%
Total 11,239 17,528 7,140 100%
Source: ECONorthwest.
Table 2 shows that the annual income associated with about 10% of the occupations
in Woodburn is unknown, because wage data for these occupations is not reported by
the Oregon Employment Department. Table 3 shows the occupations estimated to
have over 50 employees in Woodburn for which we do not have wage data.
Employment in these occupations represents about 60-70% of all employment in
occupations for which we do not have wage data. Table 3 shows roughly 1/3 of
employment in occupations that we do not have wage data for are in Nursery Workers
and Student Workers, occupations that are likely to pay wages that support incomes
of $10,000 to $19,999.
Table 3. Woodburn employment in occupations with unknown wages
Occupation Title 2000 2020 Likely Income Range
Nursery Workers 359 241 $10,000 - $19,999
Student Workers 154 292 $10,000 - $19,999
Other Hand Material Movers 68 115 $20,000 - $29,999
Leased Workers 54 105 $20,000 - $29,999
Other Professional & Tech Wkrs 74 137 $30,000 - $39,999
Other Management Support Workers 62 107 $30,000 - $39,999
Other Managers & Administrators 79 143 $40,000 - $49,999
Total 851 1,140
Source: ECONorthwest.
Note: Table 3 shows only occupations with 50 or more employees.
The income distribution in Table 2 has indirect implications for the distribution of
household income in Woodburn, for two reasons. First, Table 2 shows the distribution
for individual occupations but many households will have more than one wage earner,
so total household income will be affected by the earnings of all household members.
Second, not everybody who works in Woodburn lives in Woodburn, and some
residents of Woodburn work outside of the city.
Table 4 shows the estimated distribution of employment by income for Woodburn in
2000, 2020, and for new employment added between 2000 and 2020. The results
Parker to Winterowd
20 March 2003
Page 5
show that implementation of the City's economic development strategy will result in
much faster growth in jobs paying more than $20,000 annually. Forty-three percent of
new jobs are forecast to have annual incomes of more than $30,000.
Table 4. Estimated distribution of employment by income, Woodburn 2000-2020
Total Employment New Emp
Annual Income 2000 2020 2000-2020
< $20,000 28% 23% 12%
$20,000 - $29,999 31% 36% 39%
$30,000 - $39,999 12% 15% 18%
$40,000 - $49,999 9% 11% 13%
$50,000 + 9% 10% 12%
Unknown 11% 11% 9%
Total 100% 100% 100%
Source: ECONorthwest.
Another way to analyze future income shifts is by using hourly wages. Occupational
wage data from the Oregon Employment Department were used to estimate the
number of new jobs in Woodburn by wage level. Table 5 shows our forecast of new
jobs by wage level in Woodburn between 2000 and 2020. The results indicate that
more than half the jobs created will pay more than $12.00 per hour.
Table 5. Forecast of new jobs by wage level in
Woodburn, 2000-2020
Average Hourly Wage
< $7.99
$8-$11.99
$12 - $15.99
$16 - $19.99
$20 - $23.99
$24 and over
Unknown
Total
2000
1,389
3,525
1,660
943
447
884
1,540
10,388
2020
1,605
5,731
3,302
1,829
893
1,693
2,475
17,528
Change
216
2,206
1,642
886
446
809
935
7,140
% Change
3%
31%
23%
12%
6%
11%
13%
100%
Source: ECONorthwest
Note: Table does not include occupations for which no wage data
is available from the Oregon Employment Department.
Table 6 shows the estimated distribution of employment by income for Woodburn in
2000, 2020, and for new employment added between 2000 and 2020. The results
show that implementation of the City's economic development strategy will result in
much faster growth in jobs paying more than $12.00 per hour Fifty-two percent of new
jobs are forecast to have annual incomes of more than $12.00 per hour.
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20 March 2003
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Table 6. Estimated distribution of employment by income, Woodburn 2000-2020
Average Hourly Wage
< $7.99
$8 - $11.99
$12 - $15.99
$16 - $19.99
$20 - $23.99
$24 and over
Unknown
Total
Total Employment
2000 2020
13% 9%
34% 33%
16% 19%
9% 10%
4% 5%
9% 10%
15% 14%
100% 100%
New Emp 2000-2020
Number Percent
216 3%
2,206 31%
1 ,642 23%
886 12%
446 6%
809 11 %
935 13%
7,140 100%
Source: ECONorthwest.
COMPARISON TO OTHER CITIES
Woodburn's economic development strategy is to increase high-wage employment. The
previous section described why it is difficult to develop an accurate estimate of future
wage levels. Moreover, ECO stopped short of using the wage estimates to develop a
future distribution of household incomes. ECO identified a number of Oregon cities to
compare with Woodburn to better understand the relationship between various socio-
economic characteristics.
Table 7 presents a set of Census variables for Woodburn and other selected Oregon
cities.2 ECO chose the comparable cities primarily based on size, and secondarily
based on recent growth and economic trends. While it is difficult to draw definitive
conclusions from the data, ECO makes the following observations:
. With the exception of Bend and McMinnville, more the 50% of the labor force in
the comparable cities worked in a different place. Woodburn is closely
comparable to the nearby cities of Tigard, Wilsonville, and Tualatin.
. With the exception of McMinnville, Springfield, and Woodburn, the comparable
cities have 33% to 40% of their households in incomes ranging between
$50,000 and $100,000.
. Springfield and Woodburn have the lowest median household incomes-about
$33,000. Median household income in the comparable communities was much
higher, ranging from $40,000 in Bend to $55,000 in Tualatin.
. Woodburn, Forest Grove, and Hillsboro had the highest percentage of residents
in manufacturing industries.
. Woodburn has a lower percentage of residents employed in Education, Health
and Social Services and Other Services than any of the comparable
communities. It also has a relatively low percentage of residents employed in
Professional Services.
2 The u.s. Census counts the number of residents that are employed by location of residence, not location
of employment. Thus, employment figures do not represent the number of jobs in a specific city.
Parker to Winterowd 20 March 2003 Page 7
Table 7. Comparison of Census variables, Woodburn and selected cities, 2000
Forest McMinnvill Oregon Spring- Wilson- Wood-
Variable Bend Grove Hillsboro City field Tigard Tualatin vi lie burn
Population 51,808 17,524 69,883 26,552 25,533 52,729 41,261 22,587 13,905 20,076
Labor Force
Total 7,854 35,797 12,647 24,458 21,619 12,419 7,371 7,364
Worked in place of residence 34% 43% 26% 38% 27% 25% 28% 29%
Worked outside place of residence 18% 66% 57% 41% 74% 62% 73% 75% 72% 71%
Household Income
Total 21,050 6,310 25,028 9,356 9,493 20,423 16,499 8,617 5,927 6,250
Less than $10,000 7% 10% 5% 9% 8% 12% 4% 4% 4% 9%
$10,000 to $14,999 7% 7% 4% 7% 4% 8% 5% 3% 4% 8%
$15,000 to $19,999 7% 5% 5% 6% 6% 10% 6% 3% 6% 8%
$20,000 to $24,999 7% 8% 5% 6% 5% 8% 6% 5% 5% 8%
$25,000 to $29,999 8% 6% 5% 7% 6% 7% 5% 6% 6% 9%
$30,000 to $34,999 8% 7% 6% 7% 8% 8% 6% 8% 7% 10%
$35,000 to $39,999 6% 6% 6% 9% 6% 7% 6% 4% 5% 7%
$40,000 to $44,999 6% 6% 6% 8% 7% 6% 6% 5% 7% 7%
$45,000 to $49,999 6% 6% 5% 7% 7% 6% 5% 6% 4% 5%
$50,000 to $59,999 9% 8% 9%
$60,000 to $74,999 9% 9%
$75,000 to $99,999 6% 6%
$100,000 to $124,999 4% 3% 7% 5% 2% 7% 9% 8% 3%
$125,000 to $149,999 2% 1% 3% 2% 1% 3% 4% 3% 0%
$150,000 to $199,999 2% 1% 2% 1% 0% 3% 4% 3% 1%
$200,000 or more 2% 1% 1% 1% 1% 2% 3% 3% 0%
Median Houshold Income 40,857 40,135 51,737 38,953 45,531 33,031 51,581 55,762 52,515 33,722
Source of Income
Percent Wage and Salary 76% 74% 88% 73% 84% 80% 83% 89% 82% 64%
Employment
Total employees 11,437 12,830 24,855 21,893 12,523 7,451
Manufacturing 17% 13% 17% 15% 17% 16%
FIRE 7% 6% 6% 6% 10% 10% 9%
Professional Services 10% 8% 8% 10%
Ed, Health & Social Services 15% 19% 18% 11%
Other Services 16% 9% 11% 15% 13% 9% 11% 11%
Public Administration 3% 3% 6% 6% 4% 3% 2% 4% 2%
Source: 2000 Census
Note: Census counts employment by place of residence not by place of work
ESTIMATED 2020 INCOME DISTRIBUTION
The final step in this analysis was to develop a 2020 income distribution. The previous
sections discussed the difficulties and uncertainties of developing such a distribution.
The reason for developing such a distribution is to provide input to the DLCD/HCS
Housing Needs Model. In short, the City desires to model housing needs based on
anticipated future incomes.
The distribution presented in Table 8 represents ECO's best estimate of what incomes
in Woodburn will look like if the City is successful in implementing its economic
development strategy. The 2020 distribution assumes a 2020 population of 34,919. At
an average household size of 2.7 persons, we estimate Woodburn will have 12,932
households in 2020.
Parker to Winterowd
20 March 2003
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Table 8. Estimated 2020 income distribution, Woodburn UGB
HH Income
<10k
1 Ok <20k
20k <30k
30k <40k
40k <50k
50k <75k
75k+
Total
2000
Number Percent
538 8.6%
1,005 16.1%
1,088 17.4%
1,097 17.6%
744 11.9%
1,152 18.4%
626 10.0%
6,250 100.0%
Number
992
1,810
1,552
1,833
2,134
2,586
2,029
12,932
2020
Percent
7.7%
14.0%
12.0%
14.2%
16.5%
20.0%
15.7%
100.0%
Source: Estimates by ECONorthwest
CONCLUSION
Our analysis of the relationship between employment forecasts and wage levels lead to
several conclusions:
. Woodburn will add 7,139 jobs between 2000 and 2020. This forecast accounts
for 20% of all job growth forecast for Marion County.
. More than 50% of new jobs created between 2000 and 2020 are expected to pay
less than $30,000 annually on afull-time equivalent basis.3 This is a range of
$7.00 to $15.00 per hour expressed as an hourly wage. About 18% will pay
between $30,000 and $39,000 annually, and about 13% will pay more than
$40,000 to $49,000 annually.
. The successful implementation of Woodburn's economic development strategy will
have a significant impact on the city's wage distribution. The strategy will result
in fewer low-paying retail and service jobs, and more high-wage manufacturing,
construction, and skilled occupations.
The analysis described in this section intended to make a linkage between new
employment, wages, and households' ability to purchase housing. The data,
unfortunately, did not allow us to make the leap from a wage distribution to housing
affordability.
The wage distribution analysis, however, suggests that a higher percentage of new jobs
created in Woodburn between 2000 and 2020 will pay more than existingjobs. This
result will impact household home purchase decisions, which will affect the City's
housing need. The general impact will be to create more demand for single-family
housing types and a broader range of prices. This suggests that the City should plan
for a range of housing types and designate lands consistent with that range.
3 A full-time equivalent assumes 1980 hours annually. We recognize that many new jobs in Woodburn are
likely to be part-time jobs that will not equate to the annual salary estimates. The base data, however, do
not make a distinction between full-time and part-time employment.
Parker to Winterowd
20 March 2003
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