The Salem area’s economy has been sailing along for many months now with solid employment growth and low unemployment. But the area’s largest industry, health care and social assistance, is still having challenges.
We’ll analyze employment trends of the last several years, use the Oregon Employment Department’s ten-year occupational employment projections to look into the future, and briefly describe one of the ways the Willamette Workforce Partnership, who contributes and sponsors this column, is meeting the challenges of the current economy.
First, employment and unemployment: Salem’s overall employment growth from 2023 through 2024, at 2%, was the second highest in the state. The Bend-Redmond area was number one, at just over 3%.
Between 2 and 3% year-over-year employment growth has been the norm for the Salem area for many years.
From 1990 through 2024, there were 17 years in which employment growth averaged between 2 and 3% percent yearly. Five years of 4% growth – the highest in the time span – all occurred in recovery from recession. And the lowest growth rates occurred in recessions, in 1990, the early 2000s, 2008, and in 2020 in the first months of the pandemic.
Unemployment continues at historic lows and was 4.1% in December 2024 (the latest available). That is still 9,000 people unemployed and looking for work.
Although overall employment growth has been consistently solid, employment in specific industries shows a more complicated picture, particularly in the health care and social assistance industry.
First, a brief overview of some selected industries other than health care (see graph above):
- Transportation and warehousing leads in employment recovery overall – employment was 23% ahead of 2019 and made small gains in 2024
- Administrative and support services, made up largely of staffing agency employment, was 8% ahead of 2019 and gained employment in 2024 as well
- Construction industry employment was 9% ahead of its 2019 level, but lost a small handful of jobs in 2024
- Accommodation and food services employment (motels, hotels and all types of restaurants) was 5% ahead of where it was in 2019, but over the last year growth has been nearly zero
- Retail trade, another of the largest industries in the area, is 2% behind its 2019 level
- Manufacturing employment declined, both from 2019 and over the last year
Health care and social assistance employment, comprising nearly a third of private employment in Salem, looks substantially recovered, but the true picture is more complicated.
A large part of the health care industry’s employment growth from 2019 through 2024 was due to several thousand home health care workers being reclassified from state employment to private employment, namely, to the social assistance part of the health care industry. This was done to be consistent with the way other states across the country classify these workers (as private sector). So, employment looks more recovered than it really is.
Separating out the sectors of health care and social assistance shows this effect (see table below).
The health care industry’s ambulatory care employment (workers in doctors’ and dentists’ offices and clinics and the like) is only 1% ahead of where it was in 2019. Nursing and residential care facilities employment has fared a bit better, at 6% ahead of 2019 levels. Wage increases have likely helped here. And the huge percentage increase in social assistance employment is due in large part to the home health care aide reclassification.
Analyzing health care’s occupational projections over the next ten years adds another dimension to this picture.
Briefly, about the projections – state economists provide them every two years, for ten years out, so that businesses, governmental entities, workforce boards, and non-profit agencies can plan for the future.
The latest projections from 2023 to 2033 were published in December. Growth openings due to business expansions, and replacement openings due to retirements, changing jobs, etc. were estimated for approximately 500 occupations, for Oregon’s nine workforce regions.
The Salem metro area, (Marion and Polk counties combined) is in the Mid-Valley Workforce Region, which comprises Marion, Polk, Linn and Yamhill counties. The metro area is 70% of the mid-Valley’s employment, so it is reasonable to conclude that a substantial portion of the openings will occur in the Salem area.
What do the projections say about health care occupational openings?
The mid-Valley will have 35,000 health care job openings, nearly 10% of all openings. Four thousand of them will be growth openings as health care is one of the fastest growing industries.
Healthcare occupations are divided into: practitioners and technical – these are doctors and dentists, nurses, radiology techs and the like; and health care Support – these are home health aides, nursing assistants, phlebotomists, etc.
Fully one-third of all practitioner and technical openings will be for nurses – 3,000 out of a total of 10,500.
Over the last several years, a bachelor’s degree has become the preferred requirement for entry into the nursing profession. Add in the stress that the health care system experienced during the pandemic, and on-going issues in the nursing profession leading to nurses’ strikes and the threat of strikes, and the need for 3,000 more nurses in the Mid-Valley over the next ten years seems daunting.
Of the 25,000 total support openings, more than half will be for home health aides – these are workers working in people’s homes, group homes or care communities, who help with daily living activities. Nearly all support openings will be in these four occupations: home health aides, nursing assistants, medical assistants and dental assistants.
Filling these thousands of support openings will be challenging. Here’s why: all four occupations’ median hourly wage is below that of the median wage for all occupations, which is $23.85 an hour. And, although entering these occupations isn’t difficult – a high school diploma and non-degree post-secondary training are required – area schools offer training programs which charge tuition.
In summary, large sectors of the health care industry have not seen employment come back much ahead of pre-pandemic levels. And state projections for the future of many health care occupations are cause for concern.
The Willamette Workforce Partnership, part of a nation-wide system of workforce boards, is responding.
WWP uses the consortium model to bring businesses, educators, and leadership from regional healthcare organizations together to share information and problem-solve.
Several years ago, the workforce board pulled together health care organizations in a consortium, largely in the behavioral health area. This effort is now being expanded to include a broader array of health care organizations and businesses. As a result, the workforce board and staff will gain more in-depth knowledge of workforce needs to help perform their core mission: to train workers with the skills businesses, and in particular health care businesses, need.
In conclusion, the Salem area’s overall economy is healthy. The national employment report (for the entire U.S.) for January was a weak one, however. Usually, the economies of Oregon and the Salem area follow the national trend. But we won’t know January employment for Oregon and the Salem MSA until mid-March – so stay tuned!
Pam Ferrara of the Willamette Workforce Partnership continues a regular column examining local economic issues. She may be contacted at [email protected].
STORY TIP OR IDEA? Send an email to Salem Reporter’s news team: [email protected].
A MOMENT MORE, PLEASE– If you found this story useful, consider subscribing to Salem Reporter if you don’t already. Work such as this, done by local professionals, depends on community support from subscribers. Please take a moment and sign up now – easy and secure: SUBSCRIBE.
Pamela Ferrara is a part-time research associate with the Willamette Workforce Partnership, the area’s local workforce board. Ferrara has worked in research at the Oregon Employment Department, earned a Master’s in Labor Economics, and speaks fluent Spanish.
