The Protection of Government Employment

Last Sunday, the Statesman Journal delivered a fascinating editorial on the state of Oregon’s employment, or more pointedly, the state of Oregon’s unemployment. The fascination derives not from the apparent concern that Oregon has now slipped to the second worst state for unemployment in the nation. At 12.1 percent, it trails only Michigan at 12.6 percent — Michigan being the state hit hardest by the near collapse of the automotive Big Three: General Motors, Ford and Chrysler.

No, the fascination arises because the Statesman Journal, intentionally or inadvertently, opened the door to some of the nasty little secrets about Oregon’s routinely high unemployment while continuing to “keep the secrets” with regard to other issues. And I use the term “secrets” not because these matters are really secret but rather because the politically correct choose not to include them in policy discussions. In turn, the mainstream media dutifully fail to report on those issues — both as to their existence and their impact.

For instance, the Statesman Journal noted early in its editorial:

But for Oregon to rival Michigan is a telling sign, and not a good one. Oregon’s unemployment rate has risen 6.6 percent percentage points since March 2007, the largest increase in the U.S. Michigan has been too reliant on the auto industry for decades and has been shedding jobs and population in direct relation to that industry’s decline. Michigan depends not only on the Big Three auto manufacturers but also on many smaller auto suppliers. Oregon also is a manufacturing state. Our wood-products industry, which has been declining for years, is especially hard-hit by the national slump in housing and other construction.

In acknowledging that Oregon is a manufacturing state and that its primary output is wood products, the Statesman Journal swept away thirty years of practiced ignorance. The liberal politicians who dominate the state studiously ignore not only the history and contributions of Oregon’s timber industry, but the current contributions that this industry makes to the state’s economy, its employment and the quality of its jobs and, yes, even to the state’s tax revenues.

If you had moved to Oregon during the mid-80’s as we did, you would be hard pressed to know from Oregon’s print media that there were substantial companies that grew, managed and harvested timber, or that reduced that timber to dimension lumber, plywood and biofuel (yes, sawdust, bark, ends, and debris from logging are all biofuels) and that those companies paid some of the best wages for working men and women.

But, even as the Statesman Journal acknowledged that Oregon’s primary manufacturing is primarily timber related, it seeks to absolve government and itself of any responsibility for the difficult times facing the wood products industry.

Oregon also is a manufacturing state. Our wood-products industry, which has been declining for years, is especially hard-hit by the national slump in housing and other construction.

Yes, the current national slump in housing has hit the timber industry particularly hard, but no harder than government action closing federal lands, imposing crushing environmental regulations and injecting government into virtually every level of decision making by the wood products industry. Even the national housing slump is primarily government generated. The Congressional Democrats demanded that banks and other financial institutions make loans to people who could not or would not repay them. It was done in the name of “assuring that the nation’s poor could participate in home ownership” but denied a basic economic principle regarding ability to pay.

In doing so, the Congress created an artificial demand for housing (a demand by people who could not pay for housing) and thus forced the prices up on a limited supply. As the demand increased suppliers rushed into the market to meet that demand, but when the money supply began to dry up as it became apparent that those buyers could not and would not repay the loans, we discovered the market was now overbuilt. Even when early warning signs began to occur primarily about the instability of Fannie Mae and Freddie Mac, congressional Democrats, led by Sen. Chris Dodd, Rep. Barnie Frank, and Speaker Nancy Pelosi shut down inquiries and pronounced the problem an apparition.

The Statesman Journal continues:

Unlike Michigan, Oregon attracts new residents. Given our above-average unemployment rate, that might seem surprising. But our quality of life and the job outlook have been good enough to draw people from other states.

Oregon’s mantra about the “quality of life” always surprises me. I think there is no more beautiful place in United States than Oregon. I think that the variety of landscapes (high plains desert, soaring mountains, rugged alpine timbered lands, and spectacular coastal vistas) make Oregon like no other place. The people are warm, friendly and, except for an odd political bent, generally intelligent.

But for me, quality of life starts with a good paying job. Oregon, in good times and bad, generally ranks among those with the highest unemployment. Manufacturing, construction, and transportation jobs continue to decline. The largest growth continues to be in the minimum wage service industries (cooking, cleaning, laundry, etc.) and the government. To suggest that Oregon’s “job outlook [has] been good enough“ is a bit naïve. If it were good, Oregon wouldn’t regularly rank among the highest in unemployment.

But here is the real kicker and the real eye-opener:

On the negative side, at least one major factor could drive up unemployment: job cuts by state and local governments in the upcoming budget cycle. The federal stimulus money won’t make up for reduced state tax revenue. That could have a significant impact on the Mid-Valley, where our unemployment has been lower because of our large number of public employees.

What can you say? Government has become such a dominant employer that Oregon’s mainstream media feels compelled to editorialize in support of its continuation. And, please note, the Statesman Journal, having concluded that government employment should remain protected, also acknowledges that “stimulus funds” will not make up for reduced tax revenues, thus leaving the only “fair minded” conclusion — raise taxes.

Raise taxes to ensure that government employment remains robust and bloated. Raise taxes to ensure that no government employee loses his or her job. Never mind that 94,700 Oregon taxpayers have lost their jobs. That is 94,700 when Oregon’s unemployment rate was a mere 10.8%. Now that that figure has risen to 12.1%, the number of Oregonians who have lost their jobs in the private sector is in excess of 107,000.

Even while the Statesman Journal remains clueless as to the impact of raising taxes to preserve public employment in a time of extreme economic crises, it does seem to scent a clue as to the source of the problem for business growth in Oregon,

Gov. Ted Kulongoski and other government and business leaders must be more visible and aggressive in recruiting new businesses as well as supporting current ones. . . . Oregonians must be just as resourceful in seeking other businesses. Michigan, for example, is making aggressive use of tax credits to attract new businesses. Gov. Jennifer Granholm just announced more than $500 million in incentives to bring $1.7 billion of investment in advanced battery production to the state. Oregon should be looking closely at how its taxes and credits hurt or help the economy. In the end, it’s not about cold statistics such as the unemployment rate. It’s about people and jobs.

While I do not disagree with the sentiments of the Statesman Journal it might have been better said,

“In the end, it’s not about the primacy of government or the preservation of the power of the public employee unions, it’s about people and jobs and a sound economy.”