Oregon’s Nonresident WorkersAugust 30, 2021 Oregon’s open beaches, rugged mountains, and grape-filled hillsides make it a popular destination for visitors. But there’s something else about Oregon that attracted about 122,000 people from out of state in 2018 – jobs. Roughly 7% of people who make their living in Oregon make their home in some other state. Not surprising to anyone driving the bridges over the Columbia River during rush hour, four out of five of these nonresident workers come from Washington.
Traveling in the other direction are Oregonians who migrate to work for employers in other states. There were about 65,000 people who lived in Oregon and worked out of state in 2018. This resulted in a net inflow of about 57,000 workers to Oregon – up from a net inflow of 56,000 in 2017. Workers crossing state boundaries influence the economy in a variety of ways. This article focuses on where nonresident workers live, their contribution to Oregon’s General Fund, and their effect on Oregon’s per capita personal income.
Growing Number of Nonresident Workers
The number of nonresident workers grew rapidly over the last decade, from 89,020 in 2008 to 122,291 in 2018. That impressive 37% increase in nonresident workers was surpassed by the 51% rise in Oregonians working in other states, which grew from 43,281 in 2008 to 65,331in 2018. Since the number of nonresident workers employed in Oregon started from a larger base, the net inflow of workers continued to grow from 45,739 in 2008 to 56,960 in 2018.
Home Is Where the Tax Form Is
The 95,968 Washingtonians working in Oregon in 2018 accounted for more than 5% of all workers with jobs in Oregon. Among Oregon’s other neighbors, there were 8,904 Californians, 7,690 Idahoans, and 689 Nevadans working in Oregon.
The fact that people live in neighboring states and work in Oregon isn’t surprising. But what about workers living in Texas, New York, Florida, and other far away states? Their numbers nearly quadrupled between 2008 and 2018, but they’re not likely crossing the Snake River on I-84 each morning to get to work. Nonresident workers may live in both states but maintain their primary residence outside Oregon, or work in Oregon on temporary assignment, or they may have moved during the year and their residency status wasn’t updated yet. Residency is assigned by the U.S. Census Bureau based on data from federal agencies such as the Internal Revenue Service and the Social Security Administration, so the state where the worker files their taxes is considered home.
One possible explanation for the growing number of nonresident workers is the rise in teleworking – regular employees working outside the conventional workplace and interacting with others via communication technologies. According to the U.S. Census Bureau, the number of people working from home in Oregon increased by 40,748 from 2008 to 2018. There’s a good chance that teleworkers are driving some of the increase in Oregon’s nonresident workforce.
Taxed By Where the Work Takes Place
Regardless of where they claim residency, income earned from services performed in Oregon by nonresidents is subject to Oregon income tax. According to the Oregon Department of Revenue, the total Oregon personal income tax liability of nonresidents was more than $707 million in 2018, or 8% of the total tax liability. Personal income tax is the largest source of revenue for Oregon’s General Fund.
The Oregon personal income tax liability of Washington residents was $365 million in 2018, with 65% coming from Clark County residents. In fact, Clark County would rank eighth among Oregon counties for Oregon personal income liability (if it were in Oregon). The Oregon personal income tax liability of Californians was nearly $69 million, Idaho residents were responsible for $31 million, and nearly $242 million came from residents of other areas outside Oregon.
Inflow of Workers Lowers Oregon’s PCPI
Nonresidents working jobs in Oregon lowers one closely followed measure of regional income. The U.S. Bureau of Economic Analysis (BEA) estimate of per capita personal income (PCPI) is the annual sum of all resident income in a geographic area divided by the number of residents in the area. The BEA adjusts for residency by counting work income in the worker’s state of residence. A net outflow of workers adds to a state’s PCPI, while a net inflow of workers, such as Oregon has, subtracts from a state’s PCPI.
With a net $5.3 billion in earnings by the inflow of nonresident workers in 2020, Oregon had the fourth largest net out-adjustment for residency of any state in the BEA’s calculation of PCPI. The large adjustment is a result of Oregon’s major employment center – Portland, with about half of the state’s jobs – being right on the border with Washington. If Oregon had no net inflow of workers in 2020, Oregon’s PCPI would have been about $1,244 higher and would have stood at 97% relative to the nation’s PCPI instead of 95%. In other words, nonresident workers account for about 40% of the gap between Oregon’s PCPI and the nation’s.
Nonresident Workers Data
Information about Oregon’s nonresident workers is from the U.S. Census Bureau’s OnTheMap data, part of the Local Employment Dynamics (LED) partnership with the states. OnTheMap provides the most comprehensive data available for worker flows by residency and place of work. The data is for workers during the second quarter of the year. This analysis only considers a worker’s primary job – the job with the most earnings during the quarter – to avoid double counting of workers with two jobs.
To explore and use the data available from OnTheMap, visit http://onthemap.ces.census.gov.