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?