A Job Market Still In Decline: A Government Still In Growth.

Oregon’s employment numbers for April of 2010 are out and while, at first blush, they seem to be a positive sign, a closer look reveals that Oregon’s economy remains in the tank. As in the past, all of the information regarding employment are taken from the state’s own Oregon Labor Market Information System (OLMIS).

Oregon’s Department of Employment trumpeted the expansion of the job market by 3900 jobs. If that related to the private sector it would, indeed, be good news. However, the monthly employment report went on to note:

“In April, most of the major industries performed near their normal pattern. Only one major industry showed a seasonally adjusted job change of 1,000 or more: government (+2,800 jobs).”

Seventy-five percent of Oregon’s job growth is additional government employees. At the same time Manufacturing jobs fell by another 500 jobs. (It’s a mystery as to why the Department refers to Government as an “Industry” since it does not produce any revenue.) To put that in perspective, another 2800 government jobs mean the following:

ï‚· A recurring annual expense to Oregonians with no offsetting production to generate revenue.
ï‚· A recurring annual salary increase based on generous public employee union contracts negotiated with the very politicians that the public employee unions massive $60 Million biennial campaign war chest helped elect. (Add to that an additional “step” increase awarded simply for showing up for another year.)
ï‚· A recurring annual payroll surcharge of nearly twenty-four percent to keep the overly generous, but nearly bankrupt, Public Employees Retirement System (PERS) afloat.
ï‚· A recurring monthly surcharge of between $1200 and $1800 to pay for the gold-plated healthcare insurance demanded by the public employee unions and agreed to by the very politicians that the public employee unions massive $60 Million biennial campaign war chest helped elect.

I am told by legislators that the “rule of thumb” is that $50,000 is the rough equivalent annual salary per public employee. Add to that the twenty-four percent surcharge for PERS (eighteen percent required by PERS plus the six- percent contribution by employees that the state has agreed to pay on their behalf) and that figure becomes $62,000. There is another 7.65% for FICA and Medicare that brings the total to $65,825. Add to that the approximately $1200 per month paid for the public employees Cadillac health insurance plan and the total now becomes $80,225. Thus the additional 2800 employees hired in April alone increased the recurring expense to Oregon taxpayers by $224,630,000.

At a time when the budget for virtually every level of government is underwater, it would appear to be suicidal to add nearly one-quarter of a billion dollars to government budgets. But this is Oregon and Oregon’s government is in the firm control of its public employees unions who fund the campaigns of Oregon’s Democrat politicians — the same politicians with whom the public employee unions subsequently negotiate their next contract, including pay raises, increased benefits and favorable work rules.

The State of New Jersey faced a similar problem and elected Gov. Chris Christie who is well under way to confronting New Jersey’s budget chaos and the public employees unions who are responsible for much of its excesses. The question for Oregon is whether it will follow New Jersey’s lead and resurrect its flagging economy or continue down the path of its neighbor California into economic oblivion.