The 2050 Economic Outlook: How the Software Revolution, the Global Middle Class, and the Climate Will Shape Our State.

The 2050 Economic Outlook: How the Software Revolution, the Global Middle

Class, and the Climate Will Shape Our State

2

“Few could have predicted, at the beginning of the present century, that the American people would have to face, in the first quarter of the twentieth century, anything like the changes we have just

experienced. During this period we have undergone the most dramatic series of readjustments in our

history. The most obvious of these changes has been in the fields of industrial activity. The phenomenal increase of invention, the expansion of the factory system, the widespread adoption of new machines

and new processes, have brought about tremendous changes in our ways of making a living….The upshot of all this pressure has been an enormous increase in

the demand for education.”

Arthur B. Moehlman, Public School Finance. 1927

3

“Few could have predicted, at the beginning of the present century, that the American people would have to face, in the first quarter of the twentieth century, anything like the changes we have just

experienced. During this period we have undergone the most dramatic series of readjustments in our

history. The most obvious of these changes has been in the fields of industrial activity. The phenomenal increase of invention, the expansion of the factory system, the widespread adoption of new machines

and new processes, have brought about tremendous changes in our ways of making a living….The upshot of all this pressure has been an enormous increase in

the demand for education.”

Arthur B. Moehlman, Public School Finance. 1927

4

“Few could have predicted, at the beginning of the present century, that the American people would have to face, in the first quarter of the twentieth century, anything like the changes we have just

experienced. During this period we have undergone the most dramatic series of readjustments in our

history. The most obvious of these changes has been in the fields of industrial activity. The phenomenal increase of invention, the expansion of the factory system, the widespread adoption of new machines

and new processes, have brought about tremendous changes in our ways of making a living….The upshot of all this pressure has been an enormous increase in

the demand for education.”

Arthur B. Moehlman, Public School Finance. 1927

5

“Few could have predicted, at the beginning of the present century, that the American people would have to face, in the first quarter of the twentieth century, anything like the changes we have just

experienced. During this period we have undergone the most dramatic series of readjustments in our

history. The most obvious of these changes has been in the fields of industrial activity. The phenomenal increase of invention, the expansion of the factory system, the widespread adoption of new machines

and new processes, have brought about tremendous changes in our ways of making a living….The upshot of all this pressure has been an enormous increase in

the demand for education.”

Arthur B. Moehlman, Public School Finance. 1927

6

“Few could have predicted, at the beginning of the present century, that the American people would have to

face, in the first quarter of the twentieth century, anything like the changes we have just experienced.

During this period we have undergone the most dramatic series of readjustments in our history. The most obvious

of these changes has been in the fields of industrial activity. The phenomenal increase of invention, the expansion of the factory system, the widespread

adoption of new machines and new processes, have brought about tremendous changes in our ways of

making a living….The upshot of all this pressure has been an enormous increase in the demand for education.”

Arthur B. Moehlman, Public School Finance. 1927

7

Software is eating the world

8

The Great Decoupling

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Changes in Employment by Skill Percentile, 1980-2005

Source: Autor and Dorn, American Economic Review, August 2013

10

Job market has collapsed for less educated workers

1940 1980 2010$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

No HS degreeHS degree

AA or some col-lege

Bachelor’s

Master's +

Source: ECONorthwest analysis of US Census data. Average Portland area wages (2010 dollars) by educational attainment, labor force participants aged 25-64

The Outlook

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The Next Decade

Service

Professi

onal

Office/A

dminSales

Management

Healthca

re

Transporta

tion

Producti

on

Constructi

on

Installa

tion

Farm/Fish

/Forestry

Other0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Occupational Job Projections, 2012-2022G

row

thRe

plac

emen

t

Source: Oregon Employment Department. Employment Projections by Industry and Occupation. April 2014

13

Expanding• Computer design• Building/residential

contractors• Software

publishers• Nursing/residential

care• Ambulatory

healthcare

Declining• Newspaper/book

publishing• Telecommunications• Federal government• Paper manufacturing• Electronic

instruments• Utilities

Expanding/Declining Industries

Source: Oregon Employment Department. Employment Projections by Industry and Occupation. April 2014

14

Next Several Decades

Management

Engineering/ Science

Education, Law, Arts, Media

Healthcare

Service

Sales

Office and admin. support

Transportation

Installation, Maintenance

Source: Frey, Carl Benedikt and Michael Osborne. September 17, 2013. The Future of Employment: How Susceptible are Jobs to Computerisation? University of Oxford

Three Trends Shape the Outlook

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Growth of the Global Middle ClassShares of Middle Class Consumption, 2000-2050

17

The Cliff Mass Hypothesis

Heat waves

Water stress

Sea Level RiseSevere Storms

http://cliffmass.blogspot.com/2014/07/will-pacific-northwest-be-climate.html

18

Cost of Housing on the West Coast

San Jose Portland

Strengthening the Outlook

20

Reduce Childhood PovertyPoverty v. NAEP (4th Grade Math), 2011

10% 15% 20% 25% 30% 35%200

210

220

230

240

250

260

Share of Children Living in Poverty

4th

Gra

de N

AEP

Avg

. Mat

h Sc

ale

Scor

e

Oregon

Source: ECONW analysis of NAEP and Annie E. Casey Kids Count data

21

Connect Education to the Economy

Share of 23-29 Year Olds with College Degrees Working in Occupations that Require a College Degree

Maine

Nevad

a

Oregon

Alaska

Florid

a

Oklahoma

Iowa

Californ

ia

Minnesota

Wash

ington

Indiana

Michiga

n

Tenness

ee

Wisc

onsin

North Dak

ota

Arkansas

New Ham

pshire

Georgi

a

New Je

rsey

Montana

Marylan

d

Wyo

mingOhio

Pennsyl

vania

Connecticu

t

Virginia

40%

45%

50%

55%

60%

65%

US Share: 58%

Source: ECO analysis of US Census

22

DiversifyForeign Born Population with a College Degree as a Share Total Population, 2009

Seattle Portland Sacramento San Francisco

San Jose Los Angeles San Diego0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Source: ECONW using Brookings, The Geography of Immigrant Skills and US Census

23

Engage Migrating Boomers

24Source: Bureau of Economic Analysis, SA04, CA35, CA04

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

0%

10%

20%

30%

40%

50%

60%

Medicare Transfers and Social Security Benefits Relative to Wage and Salary Income, Oregon and Douglas

County, 1969 - 2013

Douglas County

Oregon

Engage Migrating Boomers

25

Exploit Our Competitive Advantage

Food Manufacturing/Beverage, Job Index 2002 = 1.0

Oregon

United States

Source: ECONW analysis of BLS data

26

Contact

PortlandThe KOIN Tower222 SW Columbia StreetSuite 1600Portland, OR 97201503-222-6060

BoiseEagles Center223 North 6th StreetSuite 430Boise, ID 83702208-918-0617

Eugene72 W. Broadway, Suite 206Eugene, OR 97401541-687-0051

SeattleThe Seattle Tower1218 Third AvenueSuite 1709Seattle, WA206-262-8013