The new Oregon employment figures are out for August of 2009 and they can only be described as disastrous. So much so that even the Oregonian, which trumpeted July’s figures as a sign of an improving Oregon economy, provided a detailed front page story regarding Oregon’s bleak employment picture.
Oregon has retaken its place as the second worst in the nation — second only to Michigan, home of the collapse of America’s automotive industry. The employment figures are so bad that, for the first time in ages, the total number of government employees declined — declined by 2,000. But lest you think that Gov. Kulongoski gets it, please note that the entire burden of the public employee decline fell on the backs of local government — meanwhile, Kulongoski increased the number of state employees by another 100.
The employment figures are so bad that, for the first time in ages, the Oregonian did an in depth analysis of the figures and discovered that Oregon’s unemployment isn’t the 12.2 percent reported by the Oregon Department of Labor. In fact, because unemployment figures count only those who are receiving benefits and exclude those whose benefits have expired, the actual unemployment rate is closer to 14.8 percent. And if you include the underemployed — those who have had to settle for part-time jobs or who have reduced hours — the figure jumps up to 23.3 percent. That’s it — nearly a quarter of Oregon’s workforce is unemployed or underemployed.
And even though the Oregonian is finally alarmed by the situation, it is clueless as to the causes for the continuing jobless slump being endured by Oregon workers — preferring to blame homemakers and the elderly for re-entering the workforce. One wonders whether it is continuing misplaced loyalties to the liberal Democrat establishment or simply, like Gov. Kulongoski, systemic ignorance as to what drives an economy.
What drives an economy is business growth — private business growth. Private business growth creates jobs. Jobs move people from the position of drawing down government coffers (jobless benefits and welfare benefits) to building government coffers (taxes — particularly on income). In Oregon, nearly 133,000 private sector jobs have been lost since peak employment in December of 2007 while the number of government jobs (education and federal, state and local government) have increased by 29,000.
And the reason that those jobs have been lost is not because homemakers and the elderly have returned to the workforce but rather because businesses have either moved, closed or substantially reduced their Oregon workforces. While the Oregon Department of Labor maintains extensive statistical data on virtually every sector and subsector of businesses operating in Oregon it apparently does not publish statistics on the total number of businesses on a monthly, quarterly or annual basis. We are left to mine the anecdotal information regarding businesses that close or relocate — and they, apparently, are legion.
Even Gov. Kulongoski’s vaunted program to grow Oregon through “green jobs” received a staggering blow when Suntech, announced that it was abandoning its intent to establish a plant in Oregon and will, instead, build it in Phoenix — where, by the way, the sun actually shines for three hundred plus days per year as opposed to about 100 in the Willamette Valley.
Oregon already suffers from the Big Three deterrents to business location and expansion — high taxes, restrictive land use regulation and burdensome regulations. And all of that is made even worse by the uncertainty of future government policies. Uncertainty inhibits planning — expansion, production and pricing.
In Oregon, Kulongoski and his colleagues in the liberal Democrat legislature increased that uncertainty exponentially. They increased Oregon’s business taxes dramatically making Oregon second only to Denmark in the world. They have adopted dramatic greenhouse gas emission goals at a time when many businesses are exporting their manufacturing and production jobs to China, India and Southeast Asia — all of which have steadfastly declined to participate in limiting greenhouse gases, preferring instead to grow their economies. They toyed with the concept of a “cap and trade” that would have set it apart from the other states and more importantly other nations and would have imposed significant new and increased costs on Oregon businesses. And they have expanded government size and spending at a time of an extraordinary contraction of private business and private employment.
And in Portland, the heart of Oregon’s liberal establishment, the Portland Metro Council — charged with administering Oregon’s restrictive land use provisions — has determined that no further expansion of the urban growth boundary is needed for the next twenty years. Oregon’s population has grown at an average rate of 1.59 percent annually over the last fifty years. Assuming a continuation of that growth the Portland Metro area can expect to add nearly 1,000,000 people to its population in the next twenty years and yet Oregon’s liberal political establishment will force it to grow within its current boundaries. The Metro Council has suggested that growth can occur in existing aged and abandoned industrial property while at the same time it has restricted the transportation capabilities to and from those properties by cannibalizing existing streets and routes in favor of costly and highly inefficient light rail systems.
This is the future that business faces as it decides whether to locate, expand or relocate to and from Oregon. It’s not a difficult choice.
The reason that Oregon’s unemployment rate is one-third higher than the rest of the nation; the reason that employment will continue to decline is quite simple — “business” is not spoken in Oregon political circles. All focus in Oregon’s liberal political environment is on the preservation, growth and funding of government. It has been so routine for the past twenty years that its impact on business has become irrelevant to Oregon’s unbroken string of liberal Democrat governors and its accompanying legislatures — Republican and Democrat alike.
In a place as beautiful as Oregon, blessed with an abundance of natural resources and located at the gateway to Asia, it is a genuine pity that Oregon’s leaders continue to fail to understand that real “quality of life” starts with a good paying job. Unfortunately, it just never crosses their minds.
But there are solutions. For Oregon voters, sign the petitions to refer the 2009 Legislature’s massive tax increases and then vote to rescind them on the November ballot. For Oregon legislators, reduce the capital gains tax by one-half; eliminate the state inheritance tax for those portions of the estate that represent farms, ranches and businesses in Oregon; and subject every board, bureau or agency to a six-year audit cycle — continuation of any such entity would require legislative re-authorization and thus mitigate the ability of the administrative part of government to kill reforms through inertia. (Better yet, cap state spending based on the growth of total personal income.) And for Oregon’s governors, take an economics class, run a small business, and learn that growth in private business is the key to the growth in good jobs (and increased tax revenues for government programs).