An Honest Look at Oregon’s Economy

Of late, Oregonians have been inundated by stories from the mainstream media describing Oregon’s booming economy, robust job growth and otherwise sterling economic performance. To read these stories, you would believe that Oregon has returned to the days of the high tech boom and that we again live in a land of milk and honey. I noted in last week’s column that the Oregonian had described Oregon’s feeble 1.7% job growth as “unusually robust.” What the Oregonian withheld from readers was the comparative analysis of Oregon’s job growth versus the rest of the nation, and particularly the Western states with whom Oregon competes directly for jobs and business location and growth. That comparative analysis showed Oregon firmly mired at the bottom of the heap with all but seven states showing growth rates in excess of Oregon’s.

Another economic indicator report was released this week. This time the U.S. Department of Commerce, Bureau of Economic Analysis, released its report on the growth in per capita income for all of the states. And where did Oregon’s “robust growth” finish? Why forty-second with a low 4.3% growth. The national average per capita income growth was 5.2%. Yes, Oregon managed to retain its position as twenty-eighth in the nation in terms of per capita personal income but, with a growth factor of only eighty percent of the national average, it is in danger of watching that position slip away. Worse yet, Oregon finished at the bottom of the heap of all of the Western states with only Nevada doing worse. On average, the Western states posted a 5.3% gain in per capita income.

So what is it that the state’s mainstream media are so excited about? What is it that leads them to conclude that Oregon is on the “come back trail”? Why, it’s the robust growth in tax revenue available to the state and local governments. This past week, the Oregonian featured a story about the Portland City Commission panting about all of the new government programs that it can now implement because of the unexpected growth in tax revenues. The Oregonian’s story gushed, “Thanks to the rebounding economy, Portland government may soon expand to cover a range of new services the city’s founding fathers could never have imagined.”

Now you might think with all of that extra money, local governments might do some things like hire more firefighters and police. Or fix the decrepit roads and bridges. Or clean the trash from the streets and roadways. Or open the jail cells that have remained built but closed for the last four years. But not in the land of milk and honey. Instead, for instance, the City of Portland is considering training birth coaches, providing job counseling for prostitutes, and hiring doulas. (What’s a doula? No, you’re going to have to look that one up for yourselves.)

And the State of Oregon is also awash in cash. The last tax revenue forecast indicated that Oregon will have nearly $2 billion dollars more in tax revenues for the biennium than it had for the previous biennium. That is nearly a sixteen percent increase. A new revenue forecast will be done in April and it is expected to forecast even more revenue. But even that isn’t enough for Oregon’s big spenders. The Democrat controlled legislature, with the help of a couple of addlepated Republicans, increased that revenue by nearly $300 million by eliminating the kicker for large businesses. That makes the growth in government spending nearly twenty percent for the biennium.

In contrast, however, Oregon’s citizens have not faired so well. In a recent report by the same Bureau of Economic Analysis, Oregon’s total personal income grew by a mere six percent per annum. (Total personal income is the income from all sources for all Oregonians and includes not only the growth in per capita income but the growth in population.)

It is apparent that Oregon’s mainstream media, just like its politicians, measure the economic well being of Oregon by how well government is doing, not how well its citizens are doing.