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Jobs Watch: Why we lag behind

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Ben Jacklet
Tuesday, December 08, 2009

State labor economist Art Ayre took the stage before Portland’s City Club last Friday to try to explain Oregon’s persistent problem with high unemployment. It’s easy enough to understand why statewide unemployment shot up from 5 percent in early 2007 to 12 percent in early 2009. The economy was crashing and jobs were vanishing everywhere. But why was Oregon among the hardest hit, once again? Why has Oregon exceeded the national average for unemployment for 25 of the past 31 years?

Ayre would seem to be the perfect person to answer that question. He’s been Oregon’s employment economist since 1999, and he is one of the most studious and well-informed public servants we have. His inquiry into the matter ran deep and broad. But his answers were disappointing.

Ayre’s research found that population growth, demographic trends and state tax policies have limited if any impact on jobless rates. He also reported that in his opinion, Oregon’s higher-than-average minimum wage has minimal effect, and the same goes for the decline of the timber industry.

Having recently toured a number of Oregon timber towns for the magazine’s November cover story, I have to say I completely disagree with Ayre on that last point. It’s no coincidence that the counties with the highest unemployment rates — Crook, Harney and Douglas — were built on timber jobs. Those jobs are largely gone and the impact is enormous.

Ayre’s take on rural Oregon was that the economies of the state’s more remote counties are inherently seasonal because of their dependence on agriculture, tourism or both. More seasonal economies bring higher unemployment rates because workers file for benefits during the off-season.

But that doesn’t explain why other states with sprawling rural counties do not suffer from unemployment rates as high as Oregon’s. North Dakota has one of the lowest unemployment rates in the nation, and Idaho’s is consistently lower than Oregon’s. Why the difference?

In Ayre’s view, Oregon suffers from its own attractiveness. In-state migration has run high for 20 years straight, as people continue to pour into a place with great skiing, gorgeous beaches and relatively affordable urban amenities by West Coast standards. “People are moving here despite the fact that we don’t have a very robust economy,” explained Ayre.

There are a couple of holes in that theory. First of all, Ayre’s own research dismisses the notion that the state’s population growth is driving up the unemployment rate. If so many people are moving to wonderful Oregon, why isn’t the population growing any faster than other states?

In addition, with the exception of Deschutes County, it certainly doesn’t seem like people are flooding into the parts of Oregon with the highest unemployment rates. Moving vans may be rolling into Portland and Ashland, but Burns? Prineville? Coos Bay? Umatilla? I don’t think so.

I guess my biggest problem with Ayre’s report has to do with the fatalistic notion that Oregon will always have a higher jobless rate because of its seasonal rural economies and attractiveness as a place to live. “We seek to solve a problem that may not really be solvable,” he told the City Club audience.

I found it telling that every question following Ayre’s talk focused not on his analysis of a problem that he considers unsolvable, but rather on possible solutions. That was also the focus of a spirited discussion that took place later that same afternoon, in the new Mercy Corps building in downtown Portland.

Congressman David Wu had organized a round-table discussion with academic, government, labor and business leaders to explore ways to create jobs in Oregon, now and into the future. It was a lively forum, but a powerful theme emerged early. The research institutions wanted money for research, the growing companies wanted capital to grow faster; the community colleges wanted money for workforce training, the utilities wanted money for transmission lines, the renewable energy businesses wanted money for renewable energy, the micro-loan providers wanted money for micro-loans, the energy efficiency experts wanted money for energy efficiency, the contracting firms wanted money for building projects, the union reps wanted money for union jobs and the tech companies wanted money for higher education.

At the end of the discussion I asked Wu which of the many proposals he had heard seemed most innovative. He told me it wasn’t a matter of which were most innovative but which of them will work best, then proceeded to praise almost every one of the ideas he had heard as worthy of federal investment. “The New Deal didn’t get us out of the Great Depression,” he said, “because it was too small.”

Sounds like a pork fest is on the way, for better or worse or both.

I don’t mean to suggest that Wu and our other reps are responding to the jobs crisis by flinging public money around indiscrimately. Some of these programs are sure to pay off in the long term, and a few seem quite innovative, such as Wu’s determined push to attract a multi-billion-dollar Department of Energy research facility to Oregon.

But Wu’s got some tough choices to make, and he won’t be able to please everyone. Our national debt is over $12 trillion and increasing by $3.86 billion per day. We need to do something to bring jobs back to Oregon, but what?

What do you think?

Is Oregon’s jobless problem solvable?

If so, how do we solve it?



Adrianne Jeffries
0 #1 CaliforniaAdrianne Jeffries 2009-12-08 12:34:51
I thought one of Ayre's more compelling points was the impact California has as Oregon's biggest trade partner. He also cited Washington as one of the perpetually unemployed states. Maybe this is a regional problem and that's why scrutinizing Oregon's historical data hasn't produced sensible answers.
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Dick Smith
0 #2 Taxes are the answerDick Smith 2009-12-08 13:15:39
When anyone goes into business and hits it big or even small, Oregon's income tax takes an unfair bite out of the income. The answer for the businessman is to move to a more fair state --Washington or Nevada--states without an income tax. Sooner or later, the jobs follow. Oregon, with a labor dominated government, is a liberals dream, and that has to change before we will see normal employment levels and taxation that is fair to everyone. Even a liberal, at some point, has to get off the couch and get a job and that means leaving Oregon.
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John A. Ward
0 #3 oregon and jobsJohn A. Ward 2009-12-08 14:52:44
The experts in Oregon (all seem to be public or semi-public employees) all say the same thing 'it isn't the taxes or regulation or liberal social policies AND we all want more public money for all of our ideal projects that can't make any money on their own. The 'green' revolution wouldn't even exist if it wasn't for public money because none of the ideas can pay for themselves. On a survey ranking states by tax and regulatory requirements, Oregon was 34th out of 50. In case nobody notices, 34 is rather far down the list. I have hopes my business has a good run-up in sales next year, if it does that will also be the last year I will be in Oregon. I love the place physically and the people are intelligent and friendly, but every small town in America offers a good life style and I am in the process of finding my next location.
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just plain dick
0 #4 just plain dick 2009-12-08 16:22:43
Jobs are not easily solved. First we must support our small businesses. Lower TAXES, cut programs that do not help the widows and orphans. Gov. PORK is not the answer. Nike could start a manufacturing plant, We could log our forests, many bi-products come from wood and fiber. Help small communities start creating products of need. Anything that is used repeatidly is in demand. Educate through training schools. All of these ideas only build other ideas and soon work is generated that needs people to fulfill the need.
What can you think of that has demand and can be provided by local labor other than service jobs? Last of all cut government, review all programs and cut all of them by 10%. Afterall business has had to.
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Brodhead For Congress
0 #5 Brodhead For CongressBrodhead For Congress 2009-12-11 10:17:27
David Wu stating that the "New Deal" was too small proves that David Wu is both fiscally challenged and a communist!

Had he looked at my platform, he would have gotten several ideas on both cutting federal government spending,creati ng jobs, and cutting taxation! Instead we get fiscal impotence!

here is a list of ideas that Mr. Wu might consider since all he know how to do in regards to job creation is borrowing money for earmarks and using taxpayer money to make himself look good!

1. Turn Congressional district into a corporate tax free zone for 5 years

2. Robustly recruit "new energy" business I:E: Lythium-ION batery technology (Johnson Controls) for the emerging hybrid car market

3. Revamp the entire air traffic control grid with new computers and new GPS and radar supported "Moving Map and terrain avoidance display"
Provide Intel tax credits and a 5 year tax free zone

4. Replace all F-15 fighters in the Oregon ANG with the new F35 joint strike fighter.

5. Convert the old reserve base adjacent to Portland international Airport into a federal Jet engine replacement center, and re-engine the entire military fleet with "New fuel savings technology" provide money for the updating of hangers and a Tax free zone.

6. Ask Boeing to consider Portland
for future aircraft contracts I:E a composite based KC-787 tanker or blended wing technology

7. a Robust advertising campaign in Europe for "vacationing in Oregon" with give aways etc.

8. Technology related to Nanotechnology and total body armor systems

9. Tax free zone for the manufacturing of the a new generation Humvee and related armor kits

10. Expansion of commuter rail that is somewhat like the Baltimore/DC area

While David Wu sat on his thumbs, Beoing decided to build the Dreamliner in South Carolina. So, now they have to fly the fuselage 3 thousand miles at 125,000 pounds of fuel each way. We could have used several locations in CD1 like Columbia county or Yamhill for a facillity. Columbia county could have simply barged the 787 sections to Everette,at pennies on the dollar, and severely reduced logistics costs. The job multiplier effect would have been incredible. Instead, Oregon decides to tax big business and simply turn a blind eye to manufacturing opportunites.

David Wu only understands how to get money of late from earmarks on borrowed money from an unbalanced congress hell bent on socialism. He does not have the capacity to think out of the box, and only has the fortitude to go along with the democratic Socialist crowd. He is not a leader, visionairy or entreprenuer, he is a follower and folks that is it.

My family has always thought big from Valley Forge to the Transcontinenta l Railroad, and from Bunker Hill to Baghdad

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Brodhead For Congress
0 #6 Brodhead For CongressBrodhead For Congress 2009-12-11 12:07:20
The low hanging fruit which Socialists Like David Wu overlook because he has never had a successful private sector business, and or any "Brick and Mortar", is the "Death Tax". I find this very amusing. There are copious Americans of Asian heritage that come to the United States for a better life. Asians from Korea, Japan, Cambodia, Vietnam, Indonesia etc. come to the U.S. and actively engage in starting a business. Using the "Extended family" as a base, they work together to create that small business. Everyone pitches in. Sons and daughters, aunts and uncles work together to build a future for themselves. Then people like David Wu and his communist leanings simply pass legislation to take it away. When papa wants to retire and have his sons inherit the business, David Wu expects you to pay him 55 percent. When you sell that house that you worked 30 years to pay for and fix up David Wu wants 28 percent. When you want to sell that NIKE stock so you can buy that new diesel delivery van that gets 27 MPG, David Wu and big Oregon government want 42 percent right off the top. David Wu does not care about the private sector, all he cares about is spending borrowed money, his cush job, his cush health care, and his big cush government beliefs. While he is able to afford sending his children to the best schools, and the best colleges, we have to foot the bill by his taking from our family business. While our sons and daughters have to struggle to keep the doors open because David Wu took 55 percent of our life's work , he is sending his children to prep school. Then when the business is going well, David Wu will tax you for health care and give your wealth to some other family. David Wu's policies attack the family, and they attack the extended family.They attack your family, take from your children and then borrow from their futures. He feels his children deserve a better education than the people who pay the bills.

I will seek to end the "Death Tax" so that hardworking family can keep what they worked for. I will seek an end to residential capital gains taxation. I will seek to let "the people who earned it spend it"

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