OBI’s 2024 Oregon Competitiveness Book provides key indicators of the Beaver State’s economic climate.

Gain valuable insights into Oregon’s economic landscape through this comprehensive, data-driven analysis. See how Oregon compares with other states in key areas like population change, taxation, affordability, education and more. The snapshots below, which use data from the Competitiveness Book and other sources, provide information on selected topics. The full 2024 Oregon Competitiveness Book is available at the bottom of this page.

In the graphics below, red text indicates a bottom-half ranking, and green text indicates a top-half ranking.

Business Climate

What the data show and why it matters:

In Brief: Oregon’s overall business climate is eroding relative to other states. Policymakers should seek to address areas of weakness and reinforce areas of strength.

The high cost of doing business in Oregon and the state’s heavy regulatory burden limit its appeal for employers. Over time, such unfavorable conditions incentivize businesses in Oregon to shift investment to more competitive states while discouraging businesses in other states from investing here at all.

As the CNBC business ranking shows, Oregon does have competitive advantages, including technology and innovation as well as an enviable quality of life. These alone won’t sustain the state’s competitiveness as other competitive measures decline, however. It’s worth noting that Oregon’s overall CNBC ranking has dropped three places since 2022, when it was 18th.

Oregon placed 21st overall in CNBC’s 2023 state business ranking. Areas of strength include quality of life (6th), technology and innovation (9th) and access to capital (20th). Areas of weakness include a below-average economy ranking (26th, down from 15th in 2022), cost of doing business (31st), and cost of living (48th).

Oregon did not fare well in the Cato Institute’s 2021 Freedom in the 50 States rankings. With a lowly overall ranking of 46th, Oregon in 2021 topped only New Jersey, California, Hawaii and New York. The state’s rankings for economic, fiscal and regulatory freedom were, respectively, 47th, 42nd and 46th. Such rankings do not point to a healthy business climate.

By some measures, conditions have become even worse. In the 2023 Freedom in the 50 States rankings, which were released after the Competitiveness Book was assembled, Oregon’s fiscal freedom rank dropped two places, to 44th. 

Oregon’s rankings were not always this low. Rather, notes the Cato Institute in the 2023 edition, “Oregon’s deterioration has been long-term and sustained. It is the second most worsened state since 2000, after Hawaii. Tax and regulatory burdens have risen, and although the state remains relatively personally free, other states have increased more on that dimension and passed it in the ranking.”

Why does Oregon’s business climate matter? Oregon’s private sector creates jobs and government revenue, the latter through taxes on both businesses and the income of the thousands of people they employ. As businesses leave and, increasingly, avoid Oregon, opportunities for meaningful employment will shrink. So will revenue for important public services like education, public safety, roads and bridges.

Policymakers should seek to address areas in which Oregon’s business climate is uncompetitive or declining relative to other states, including taxation and regulation. They also should support policies that preserve Oregon’s relative strengths, including technology and innovation.

Oregon Taxes

What the data reveal and why it matters:

In Brief: Oregon’s status as a high-tax state for businesses and individuals weighs on its economic competitiveness.

Data contained in the Oregon Competitiveness Book echo OBI’s own research on the state’s business tax climate. The book offers additional information about both personal and business taxes that underscore Oregon’s status as a high-tax state.

Even more worrisome is the fact that Oregon’s tax burden on both businesses and individuals has grown rapidly in recent years, triggering a corresponding decline in the state’s economic competitiveness. Oregon’s tax burden and its recent growth incentivize businesses and individuals to leave for more affordable states while discouraging investment in and relocation to Oregon.

The clearest high-level indication of Oregon’s eroding tax climate is the state’s drop in various national rankings. As noted in the Business Climate section above, Oregon dropped three places in CNBC’s America’s Top States for Business ranking between 2022 and 2023, weighed down by its increasingly uncompetitive tax climate and the high costs of living and doing business.

According to the nonpartisan Tax Foundation’s 2024 State Business Tax Climate Index, Oregon (28th overall) is 4th for sales taxes, 20th for property taxes, 41st for individual income taxes and an alarming 49th for corporate taxes.

Notable tax information contained in the Oregon Competitiveness Book includes:

  • Oregon’s state and local tax collections in 2021 were $6,485 per capita, an amount topped by only 15 states. In 2020, 20 states collected more taxes per capita.
  • Oregon’s business taxes per employee in 2021, at $7,400, were topped by only 15 states. Notably, state and local business taxes paid in Oregon grew at a greater rate (25.3%) in fiscal year 2021 than they did in any other state. OBI’s research also has noted this trend, which is tied in large part to Oregon’s business activity tax.
  • The effective property tax rate on a primary residence in Portland in 2022 was higher than in the largest cities in 46 other states.
  • Property taxes paid on a median-valued Portland primary residence in 2022 was higher than in the largest cities in all other states.
  • The effective tax rate on commercial property in Portland in 2022 was higher than in the largest cities in all but 11 states.
  • The effective tax rate on industrial property in Portland in 2022 was higher than in the largest cities in all but seven states.
  • Oregon’s unemployment tax rank was the nation’s second highest in 2021 as a percentage of total wages.

To improve Oregon’s competitiveness, policymakers should avoid increasing the state’s tax burden on businesses and individuals.

Wages and Income SNAPSHOT 2024 (2)

What the data show and why it matters:

In Brief: Oregon’s middling per-capita personal income does not pair well with the state’s high cost of living and tax burden.

Per-capita personal income in Oregon ranked 22nd nationally in 2022 at $62,767. Personal income is a broad-based measure of prosperity. And taken by itself, the state’s mid-pack position is cause for neither celebration nor despair. Context matters, however.

While the state’s per-capita personal income hovers in the middle range, Oregon is a high-cost state. Housing is among the nation’s most expensive, and the state’s tax burden is relatively high. In fact, the state and local tax burden per $1,000 of personal income was the nation’s 12th highest in 2021, up from 21st highest the previous year. In CNBC’s 2023 Top States for Business Rankings, Oregon placed only 48th nationally for cost of living.

Oregon’s high costs are best supported by high – not middling – per-capita personal income. To achieve this, policymakers must provide a favorable environment for private-sector growth. This includes restrained taxation, appropriate incentives and regulatory modernization. Failing this, Oregon will continue to lose business investment to more competitive states. High-paying jobs will follow, as will the tax revenue that comes with them.

Among the things private sector revenue supports are public services and the employees who provide them. Relative to its population, Oregon’s state and local government workforce is just below average – 49.6 per 1,000 residents compared with 49.8 nationally. Oregon’s public employees are among the nation’s best-paid, however. The average salary for a state employee in 2022 was just over $80,000 while that of a local government employee was about $72,800. The former ranked 9th, up from 12th in 2021. The latter, also 9th, rose from 11th in 2021.

Finally, Oregon’s minimum wage (or wages, as the minimum differs by state region) continues to be among the nation’s highest. As of the start of 2024, it was the tenth highest.

Population and Workforce

What the data show and why it matters:

In Brief: Oregon’s population is declining, creating significant workforce challenges for employers. To improve the state’s competitiveness, policymakers must address the underlying causes.

Oregon has a population problem. In terms of net domestic migration, Oregon fared worse than all but nine states between 2021 and 2022, losing 16,164 residents. As a percentage of state population, meanwhile, Oregon fared worse than all but five states, losing 0.38% of its residents.

That trend continued in 2023, according to the Census Bureau, with Oregon losing just over 6,000 residents.

Oregon’s stagnating population has exacerbated workforce challenges for employers. Continued stagnation will erode Oregon’s competitiveness even further. Population growth is the main reason Oregon’s economy outperforms the typical state, according to the state Office of Economic Analysis, which produces quarterly economic and revenue forecasts. In 2023, the office took the unusual step of developing a scenario that assumes Oregon’s population will decline slightly during the coming decade. Such a scenario would make it even more difficult for employers to fill positions and generate about $7.4 billion less general fund revenue than the office’s baseline scenario, which assumes modest population growth.

To prevent continued stagnation, policymakers must improve the conditions that render Oregon unappealing to employers and to employees. These include the state’s tax and regulatory environments; its high housing costs; its crime, addiction and homelessness problems; and so on.

Not all of Oregon’s population and workforce data point to problems, however. Despite the state’s challenging business climate, employers continue to create jobs. And the state’s population, though shrinking, continues to feature a relatively high percentage of people of prime working age.

Non-agricultural employment experienced average growth between 2022 and 2023. Oregon added more jobs than 26 other states, and employment increased at the nation’s 25th highest rate.

Oregon’s job growth has been much stronger over a 10-year horizon. Oregon employers created more jobs between 2013 and 2023 than those in 29 states. The state’s growth rate over that period, meanwhile, is the nation’s 14th highest.

Finally, people in their prime working years make up a relatively high percentage of Oregon’s population. In 2022, 52.3% of Oregonians were between the ages of 25 and 64, the 11th highest percentage in the country.

Education

What the data show and why it matters:

In Brief: Oregon funds education at an above-average level, yet student test scores are among the nation’s worst. Improving Oregon’s public schools will enhance the state’s competitiveness.

The quality of education in Oregon matters deeply to employers for several reasons. They rely upon schools to train future employees as well as the children of current and prospective employees. For businesses and employees, good schools are a significant draw. Oregon’s businesses also invest heavily in the state’s schools, and they want their tax dollars to be spent effectively.

From a school funding and performance standpoint, the data above should worry policymakers. The numbers describe a school system whose performance trails its funding by a wide margin.

In terms of per-pupil funding in 2021-22, Oregon is above average. The data, meanwhile, don’t fully account for the effect of the corporate activity tax, which the Legislature approved in 2019 with the intention of boosting education funding by $1 billion annually. The tax went into effect in 2020 and generates substantially more than expected – almost 40% more during the 2023-25 biennium, according to the Office of Economic Analysis.

Despite receiving above-average funding, Oregon’s schools are delivering decidedly below-average results. The scores of fourth graders participating in the 2022 National Assessment of Educational Progress were among the nation’s lowest in math and reading. The performance of eighth graders was stronger, but still solidly in the nation’s lower half.

The disconnect between educational funding and performance is a competitive double-whammy for the state. Raising taxes on businesses substantially has eroded Oregon’s competitiveness. A continued failure to parlay this additional revenue into educational quality will erode its competitiveness further, and businesses will respond by avoiding or leaving Oregon. This will cost the state jobs, tax revenue and prosperity.

The educational attainment of Oregonians is a different story. As of 2021, the percentage of the state’s workforce with science, engineering and health doctorates was among the nation’s highest. And in 2022, the percentages of Oregon adults with bachelor’s and advanced degrees were among the nation’s highest as well.

Among the factors contributing to the state’s outsized share of science and engineering doctorates and advanced degrees is surely the prominence of Oregon’s tech sector. As a share of total employment, the state’s tech sector ranked ninth in 2023 with a median wage of roughly $97,000.

It takes little imagination to understand the impact of Washington County’s Silicon Forest, whose steady growth continues to enhance Oregon’s stature and fill its coffers. Policymakers should be wary of taking this industry sector – or any industry sector – for granted. National and international competition for business investment is fierce, and Oregon’s enviable workforce, like its employers, do respond to incentives. And taxing them ever more heavily for underperforming schools is a powerful incentive.

Oregon Housing and Home Ownership

What the data say and why it matters:

In Brief: Oregon’s housing costs are high, and affordability is hampered by the state’s middling income. However, housing values have stagnated in recent years, pointing to a general decline in the state’s desirability for employers and individuals.

Information contained in the Oregon Competitiveness Book and in similar sources indicates that housing in Oregon is expensive. Data also indicate, however, that homes in Oregon have increased in value much more slowly in recent years than they have in most other states. In fact, as of the third quarter of 2023, the one-year rate of appreciation for homes in the Portland metropolitan area ranked only 89th among the nation’s 100 largest cities, according to the Federal Housing Finance Agency.

Homes in Oregon are so expensive because they’ve increased in value steadily over a long period. Over the past 25 years, homes in Oregon have increased, on average, at the nation’s 14th-highest rate. That trend has shifted in recent years. Over the past five years, home prices have appreciated at the nation’s 40th highest rate. And over the past year, prices in Oregon have decreased, outperforming only six states.

In other words, Oregon’s housing market was hot for a long time but has plateaued.

This trend, combined with Oregon’s stagnating population and rising tax burden, is a worrisome indicator of the state’s relative desirability. Nonetheless, housing in Oregon continues to be very expensive. The median house price-to-income ratio in Portland was 11th among the nation’s biggest metropolitan areas in 2022, up from 12th in 2021.

As the cost of housing outstrips wages, people tend to move elsewhere – or stay there – exacerbating workforce challenges faced by employers of all types. Employers respond accordingly. Those in Oregon may choose to invest and grow in more favorable states. And employers in other states may become less enthusiastic about investing in Oregon despite the state’s advantages, which include its skilled workforce and natural amenities. Over time, such trends erode prosperity and opportunity while challenging the ability of state and local governments to collect tax revenue for public services.

To improve housing affordability, lawmakers should focus on policies that lower the cost of living and doing business in Oregon as well as those that encourage home construction. A significant regulatory impediment to housing construction and business investment is Oregon’s decades-old land use system, which constrains the supply of residential, commercial and industrial land.

Notable housing information contained in the Oregon Competitiveness Book and other sources includes:

  • On an annualized basis, Oregon housing prices have appreciated more over the past 25 years than those in all but 13 states. Over this period, housing prices have appreciated on average 5.3% per year.
  • Over the past year, Oregon housing prices have outperformed those in only six states. The average price has dropped by 1.5% while the national average has climbed by 3.1%.
  • At 63.7%, Oregon’s home-ownership rate is only 41st, having dropped 10 places in a single year.
  • The median house price to median income ratio in the Portland metropolitan area was 6.78 in 2022, 11th highest among the nation’s 50 largest metropolitan areas.
  • The cost of housing in Oregon exceeded the cost of housing in all but six states in the third quarter of 2023, according to the Missouri Economic Research and Information Center.
Energy Cost and Generation

What the data say and why it matters:

In Brief: Oregon’s comparatively low energy costs are a significant competitive advantage that partially mitigates some of the state’s competitive disadvantages, including its high taxes, expensive housing and significant regulatory burden. To preserve this advantage, Oregon should avoid policies that raise energy costs unnecessarily.

Electricity costs

Oregon’s electricity costs in 2022 were among the lowest in the nation, ranking eighth for industrial and residential customers and seventh for commercial customers. Because energy is a significant cost driver for many businesses, particularly those in energy-intensive sectors like manufacturing, Oregon’s comparatively inexpensive electricity has long afforded the state a competitive advantage. As Oregon has become less competitive in other areas – business taxes and regulatory costs, for example – the importance of this advantage has increased.

The cost of electricity for residential users affects Oregon’s competitiveness as well. The cost of living in Oregon is high, owing in large part to the state’s inadequate housing supply. Comparatively cheap electricity for residential users partially offsets high costs elsewhere. Sharply increasing electricity prices will decrease Oregon’s desirability for potential employees, exacerbating the state’s developing population crisis.

The cost of electricity is particularly important given the state’s push to minimize the use of petroleum products, including natural gas. Putting all of Oregon’s economic eggs in the kilowatt basket will be advantageous only if rates for all users remain comparatively low.

There is reason for concern. Though the Oregon Competitiveness Book does not contain data more recent than 2022, the U.S. Energy Information Administration does. And preliminary data for the most recent month available at this writing, December 2023, indicate that Oregon’s relative position has slipped across the board. For that month, electricity rates for residential customers were the nation’s 15th lowest, a drop of seven places. They were the 14th lowest for commercial customers, a drop of seven places, and 17th lowest for industrial customers, a drop of nine places. This trend suggests that Oregon is rapidly losing this important competitive advantage.

Energy sources

The graphic above, based on information contained in the Oregon Competitiveness Book and the U.S. Energy Information Administration, provides two perspectives on Oregon’s energy landscape. One set of data, from 2022, breaks down electricity generation in Oregon by source. But electricity meets only some of Oregon’s energy needs. Most Oregonians use vehicles powered by gasoline or diesel. Many heat their homes with natural gas. And many employers use natural gas and petroleum products as well. The other set of data, from 2021, shows all energy used in Oregon by source.

Consider electricity-generation data first. The graphic shows, among other things, the role of hydroelectric generation. Oregon derives a bigger share of its power from renewable sources than all but four states, and the bulk of that renewable electricity comes from the region’s dams, underscoring their enduring value to the state’s competitiveness.

The second set of data illustrates the importance of petroleum products, including natural gas, fuel oil and various distillates, to Oregon’s economy. The fact that petroleum products accounted for about 70% of the energy used in the state in 2021 might surprise many Oregonians. While reducing that reliance certainly has environmental benefits, policies to that end that either limit supplies or increase the costs of petroleum products will have economic consequences. As fuel oil and natural gas become more expensive, living and doing business in Oregon will as well, causing disproportionate harm to lower- and middle-income Oregonians and rendering the state’s business climate even more hostile. Business investment will decrease further, and as this happens prosperity will decline. This argues for great caution in considering policies that increase the costs of the petroleum-based fuels that drive Oregon’s economy.

GDP and Exports

What the data say and why it matters:

In Brief: Exports are an area of strength for Oregon’s economy, but competing in national and international markets limits the ability of producers to shift costs to customers. Policies that raise the costs of production will strain this critical sector.

GDP and Growth

Oregon’s 2022 gross domestic product, which reflects the total value of all goods and services provided during the year, was almost exactly in the nation’s middle, slightly above South Carolina and slightly below Connecticut. Notably, however, Oregon climbed one place from 2021 to 2022.

Between 2021 and 2022, Oregon’s GDP increased by 9.9%, which represents the nation’s 20th highest growth rate. Oregon’s growth rate from 2020-21, by contrast, was only the nation’s 33rd highest, at 9.5%.

The data point to healthy economic growth, though even with 2022’s improved rate Oregon’s growth was roughly in the middle of the national pack. To maintain this growth rate, not to mention increase it, policymakers must create and preserve the conditions businesses need to thrive. Oregon’s difficult regulatory climate and its high costs and taxes increasingly will weigh on growth, limiting job opportunities and tax revenue.

Exports

Oregon is an export powerhouse. The total value of the state’s exports ranked 17th in 2022, at roughly $34 billion, but Oregon’s exports ranked third on a per-capita basis. Listed below are the state’s top 10 export categories in 2022. They illustrate the importance of the state’s semiconductor industry, naturally. But they also show that Oregon exports a wide variety of products, including chemicals, agricultural products, food products and wood products.

To maintain this key area of economic strength, policymakers must recognize that most businesses that sell into national and international markets cannot easily absorb increased production costs. Whether their costs are driven upward by regulatory changes or tax increases, many exporters must compete against similar businesses in states and countries with lower taxes and lighter regulatory burdens.

Competition among states is particularly fierce for capital-intensive manufacturers that generate high-wage jobs. Even if such companies maintain a footprint in Oregon, many will invest and grow elsewhere if costs and regulatory barriers outside of Oregon are lower, suitable land is available and skilled workers are easier to find.

10 Largest Oregon Export Categories, 2022:

  • Computer and electronic products: $12.9 billion
  • Machinery, except electrical: $6.5 billion
  • Transportation equipment: $4.1 billion
  • Chemicals: $3.4 billion
  • Agricultural products: $1.8 billion
  • Electrical equipment – appliances and components: $640 million
  • Fabricated metal products: $629 million
  • Plastics and rubber products: $609 million
  • Food and kindred products: $581 million
  • Wood products: $575 million

Source: U.S. Census

Manufacturing

What the data say and why it matters:

In Brief: Oregon is good at manufacturing, and manufacturing is good for Oregon. Policymakers should support policies that enhance the competitiveness of the state’s manufacturing sector.

The data contained in the 2024 Oregon Competitiveness Book underscore the findings of a 2021 report prepared for the Oregon Business and Industry Education and Research Foundation and the Oregon Business Council. Both say that Oregon is good at manufacturing, and manufacturing is good for Oregonians.

At $28.80 per hour, according to the Competitiveness Book, the average manufacturing wage in Oregon is the nation’s 11th highest. Oregon also is among the top half of states in the productivity of manufacturing employees, the number of manufacturing workers and the per-capita value of employer investment in machinery and equipment.

The high hourly wage of Oregon’s manufacturing employees echoes a finding of OBI’s report about the quality of manufacturing jobs. According to the report, the median earnings of full-time, full-year manufacturing workers in Oregon are 17% higher than those in other industries. Even better, manufacturing wage premia exist across races, genders and levels of education.

The manufacturing sector is also more important to Oregon’s economy than it is to those of most other states. In 2019, according to OBI’s report, Oregon ranked 16th in the U.S. for manufacturing as a share of state GDP. The sector contributed $33 billion annually to the state’s economy that year, accounting for 13% of GDP.

To put this in perspective, a 10% increase in Oregon’s manufacturing output would produce more than 65,000 jobs, an additional $8.9 billion in state GDP and about $800 million annually in state and local government revenue.

Given the value of manufacturing in terms of jobs, revenue and productivity, policymakers should seek to increase private sector investment by providing the appropriate conditions. Manufacturers of all kinds need land, workers, reasonable and reasonably enforced regulations and a competitive tax environment. In too many of these areas, however, Oregon has been trending in the wrong direction in recent years. Increasingly, this trend will encourage manufacturers to invest in more competitive states.

Policymakers should consider, then, the annual change in a few of the competitiveness book’s statistics. The average wage of an Oregon manufacturing worker in 2021 was the nation’s 11th highest, which is good. But it was the nation’s seventh highest just one year earlier. Likewise, Oregon’s average, per-employee investment in machinery and equipment was the nation’s 20th highest in 2021 – but the 14th highest in 2020.

These are trends policymakers should seek to reverse.

High Tech Sector

What the data say and why it matters:

In Brief: Oregon enjoys a comparatively large tech sector that generates lucrative jobs. This sector is an area of strength for Oregon, and growing it will increase prosperity given its high wages. However, the rate at which new tech establishments are emerging in Oregon is among the nation’s lowest, which should worry policymakers.

Workforce and wages

Wages for tech workers in Oregon are high. The 2022 median wage for employees in this sector, roughly $97,000, is 115% of the median state wage, according to the Computing Technology Industry Association (CompTIA), whose 2023 State of the Tech Workforce report provides the data for this section of the Oregon Competitiveness Book. Oregon’s median tech wage is the nation’s 12th highest, a jump of five places since CompTIA’s 2021 report.

Given this high median wage, Oregon is fortunate to have a comparatively large tech workforce. In absolute terms, the state’s 2022 tech workforce, at roughly 139,000, is the nation’s 21st largest. But Oregon is a fairly small state, and that workforce accounts for about 7% of all state employment, the nation’s ninth highest ratio. Nationwide, the tech workforce accounts for 5.8% of all jobs.

Oregon’s most popular tech occupations in 2022:

  1. Software: 28,674
  2. IT support: 10,558
  3. Network engineers: 9,479
  4. Cyber-security and systems engineers: 8,811
  5. Database/data scientists: 3,300

Tech sector impact and composition

Oregon’s tech sector produced almost 11% of the state’s gross domestic product in 2022, the sixth highest ratio in the country. The estimated direct impact of the tech sector in Oregon was $28.6 billion in 2022, according to CompTIA, and the state had 8,023 tech business establishments in that year.

The manufacturing component of the state’s tech sector plays a disproportionately large role, producing significantly more jobs than any other component. On a nationwide basis, tech manufacturing jobs are exceeded both by telecommunications/internet services jobs and IT services and custom software jobs. Nationally, in fact, IT services and custom software jobs outnumber tech manufacturing jobs almost three to one.

While the scope and impact of Oregon’s tech sector are impressive, not all of CompTIA’s data are encouraging. The rate at which Oregon produces new tech business establishments is among the country’s lowest. By this metric, only four states performed worse than Oregon in 2022. That means business creation and expansion, which drive innovation, are happening disproportionately in other places. The nation’s top performing states are below.

Top states by number of new tech business establishments in 2022:

  1. Florida
  2. Texas
  3. North Carolina
  4. Illinois
  5. Colorado

Top states by percentage growth in new tech business establishments in 2022:

  1. Wyoming
  2. South Dakota
  3. North Dakota
  4. Vermont
  5. Tennessee

By and large, the states on the top-performing lists offer climates that encourage growth in businesses of all types.

Key takeaways

Oregon enjoys a large tech sector that provides high-paying jobs and produces a disproportionately large share of the state’s GDP. The sector’s footprint in Oregon, which includes a large and sophisticated workforce, is competitively advantageous. But the fact that tech business expansion and creation are happening at a higher rate in almost every other state suggests that these advantages simply aren’t enough.

If policymakers want to grow – or even preserve – this valuable sector, they must provide a climate that will encourage tech businesses to invest and grow here. Given the large role tech manufacturers – and, in fact, manufacturers of all types – play in Oregon, policymakers should focus with particular care on the things they need, including adequate land, workable regulations, a competitive tax climate and more. 

Transportation and Commuting

What the data say and why it matters:

In Brief: On a per-capita basis, Oregon in 2021 spent less than almost every other state on building roads and related infrastructure. Failing to provide adequate transportation infrastructure creates a competitive disadvantage, as it increases commute times and creates freight bottlenecks. Even though the percentage of commuters in the Portland area who use public transportation is among the nation’s highest, it accounts for only 3.8% of trips. Working from home is one area in which Oregon stands out.

Roadway spending

On a per-capita basis, Oregon spent about 8% less than the national average on roadways in 2021, ranking only 35th nationally. This low ranking was driven by the state’s low spending on road-related capital projects. At only $166 per person, Oregon’s spending was only 61% of the national average. By contrast, the state spent 77% more than the national average on a per-capita basis on road maintenance.

Capital spending can vary significantly from one year to the next, as spending tends to be driven by a fairly small number of large projects. But failing to invest in the road infrastructure needed to move people and freight can place a city or state at a competitive disadvantage as commuters and freight inch slowly along congested roadways. For example, the Interstate 5 bridge connecting Portland and Vancouver, Wash., has long suffered from insufficient capacity, and its replacement must accommodate current and future demand.

Portland-area commuting

At 3.8%, the share of commuters who use public transportation in the Portland area is very high, at least relative to other large metropolitan areas. Even there, however, more than 79% of commuters use single-occupancy vehicles. To the vast majority of commuters, adequate road infrastructure remains critical.

With a time of 24.8 minutes, the average commute in the Portland metropolitan area is only the 36th longest among the nation’s 50 largest cities. First place commuting honors go to New York City, where the average commute is almost 36 minutes. New York also tops the public transit ranking. More than 28% of commuters there use public transit, almost three times the rate of runner-up San Francisco.

Statewide commuting

The Oregon Competitiveness Book does not contain data about statewide commuting, but the Bureau of Transportation Statistics makes that information available. It shows that Oregon’s commuting pattern, generally speaking, resembles those in the rest of the country. Most Oregon commuters drive alone, though not quite to the same degree as commuters nationwide. A larger percentage of Oregonians walk and bike, and a smaller percentage use public transportation.

The most notable difference involves the percentage of commuters who don’t commute at all, working from home instead. Oregon’s work-from-home rate, at 19%, exceeds the national rate by 25%. It also exceeds all of the state’s other non-drive-alone categories combined, including carpooling, public transit, walking and cycling.

To the extent that a work-from-home culture can be considered a competitive advantage, it certainly is in Oregon, partially mitigating some of the effects of the state’s low per-capita spending on road improvement.