Though unemployment is nearly 6%, according to recent data from the Bureau of Labor Statistics, businesses across the state continue to report that they’re struggling to hire new staff.
Labor isn’t the only thing in short supply: Oregon companies are also experiencing materials shortages, leading to higher operating costs — and higher prices passed on to consumers.
Wooden pallets, for example, are essential for transporting products in bulk, but have spiked in price during the COVID-19 pandemic. Pre-pandemic, new pallets ran $9–$13 each. In May the same pallets sold for $24–$35, according to Jobhan Randhawa, operations manager for A-1 Pallets, a Washington company with a facility in Portland.
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Tom Potiowsky, senior advisor at the Northwest Economic Research Center, explains what he sees as the driving cause of Oregon’s labor and supply gap, and how the issue will (and won’t) be resolved.
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Answers have been edited for length and clarity.
What factor, or factors, do you see as contributing to Oregon’s labor shortage?
Normally when you have an unemployment rate of 6% it isn’t difficult to find people to hire. There are three reasons for the shortage, I think, and they are all interconnected.
One is the federal support for unemployment benefits. They dropped the requirement that you had to be looking for work, so you can get unemployment benefits without showing there was a job available to you. But states have begun to let that go.
The second problem is child care. Children were out of school, daycare was difficult to find and women were mostly in charge of taking care of the children. The only choice was to stay home.
Third is COVID-19 fear: “I don’t want to go to a place where there are lots of people working.”