Differences between traded sector & local sector
On average, while both local and traded sectors include large and small, young and old, and high- and low-wage firms, historically, the traded sector differs from the local sector in several important ways:
- The amount of output (or value-added of the product or service being produced) per job is higher in traded-sector industries. This higher value is often referred to as value-added.
- The growth in traded-sector value-added per job accelerated during the past decade and outpaced the growth in value-added in the local sector.2
- Workers in the traded sector tend to be better educated, work more hours and earn higher average wages.
- Traded-sector workers in low value-added jobs are more exposed to being replaced by lower-cost workers or automation.
All of these factors result in traded-sector workers in the Portland region earning wages that are significantly higher than their counterparts in the local sector, on average about $15,300 or 42 percent more per year.3 Some of the annual wage difference is due to longer hours worked by traded-sector employees, but even on an hourly basis, traded-sector employees earn about 18 percent, or about $4.23, more per hour than local-sector workers.
Portlandís traded-sector clusters
The Portland-metro region has identified groupings of traded-sector firms Ė companies that specialize in particular manufactured products or services that tend to cluster together because they draw competitive advantage from their proximity to competitors, a skilled workforce, specialized suppliers and a shared base of sophisticated knowledge about their industry.
Local and regional economic development strategies have identified a number of key traded-sector industry clusters as a focus for job and wage expansion strategies. This list shows the clusters identified in Portland-metroís economic development strategies and a sampling of the companies in each cluster.
Activewear & Outdoor Equipment
- Benchmade Knife Company
- Columbia Sportswear
- KEEN Footwear
Clean Tech & Sustainable Industries
- CH2M Hill
- Gerding Edlen
- SERA Architects
- ZGF Architects
Renewable Energy & Energy Efficiency
- Iberdrola Renewables
Software & Electronics
- Coaxis, Inc.
- Intel Corp.
- Jama Software
- TriQuint Semiconductor
- Wacom Technology
Traditional & Advanced Manufacturing
- Daimler Trucks North America
- ESCO Corp.
- Evraz, Inc.
- Gunderson Rail Services
- Madden Fabrication
- NACCO Materials Handling Group
- Oregon Iron Works
- PCC Structurals
- Schnitzer Steel
- Vigor Industrial
2 Spence and Hlatschwayo (2011) estimate that between 1990 and 2008, value-added per job increased by 44 percent, but the economy overall only experienced a 21 percent increase in value-added per job.
3 These results are in part ďon average.Ē Traded-sector firms still have lower paying jobs in administration and maintenance, but they have a greater proportion of jobs in higher-paying occupations like management, finance and engineering. But it is also the case that successful traded-sector businesses tend to pay higher wages for similar positions filled by more skilled employees.