Oregon’s economy is in flames. Oregonians need innovative leaders who understand that government does not create jobs; but government can create an economic environment where small business and young entrepreneurs can flourish – leading to family-wage jobs and prosperous communities that can provide world-class education for our students and sensible safety-net programs to help our vulnerable neighbors. The private sector must serve as the backbone of meaningful economic development if we really want to help poor families work their way into the middle class, help middle-class families start to get ahead, and level the playing field to put corporate and political insiders back to work for the rest of us. It’s time to chart a new course in Salem.
Oregon’s economy was built by Oregonians who relied on the land for their livelihood, and much of Oregon continues to depend heavily on natural resource economies like farming, forestry and fishing. After high-tech manufacturing, the natural resources economic sector remains Oregon’s leading industry. Nevertheless, for at least two decades, public policy in Salem has essentially gutted natural resources-based economic development in rural Oregon – focusing instead on transitioning the metro areas from resource-based economies to mixed manufacturing and marketing, with an emphasis on high technology. The consequence has been a focus on a growing high-tech sector centered in three counties around Portland; however, rural counties have been left completely behind.
The national “Great Recession” of 2008 was evident in Oregon as well: from 5 percent in the spring of 2007, Oregon’s unemployment climbed during the next 2 years to a high of 11.6 percent – which exceeded the 10 percent national unemployment rate at the end of 2009, and was the highest level seen in decades. Oregon’s unemployment has fallen from its 2009 peak, but has remained persistently high, averaging 9.5 percent in 2011.
However, here is the ultimate proof of Oregon’s overall economic stagnation: employment in Oregon in 2010 was at roughly the same level as in 2000 and job growth has been persistently slow throughout the entire prior decade. When unemployment is further broken down by county, a familiar pattern emerges: double-digit unemployment affects 1/3 of Oregon counties, while 1/3 of the counties are below the statewide average unemployment of 8.0 percent. The six metro areas saw unemployment fall in each, but Central and Southern Oregon experience a rate far higher than the statewide average, while the northwest corner fares much better. Of course, joblessness in Benton County (home of Oregon State University) was lowest of all at only 6.0 percent, with Hood River, Washington, and Wheeler counties close behind.
Government cannot make an economy work; all it can do is create a climate that does not unduly impede business development, as well as create sound economic and tax policy that invites both capital and business to relocate locally. Unfortunately, Oregon’s current tax structure is unfriendly to business and the property taxes are among the highest in the country. Oregon frequently ranks as one of the worst income tax states for top earners, and Oregon’s capital gains are famously unfriendly to investors and small businesses alike. Until those tax policies are rationalized to invite business and capital to relocate permanently to Oregon, our state will have a difficult time sustaining meaningful economic development. Thus, one of my first priorities will be to support legislation that creates business and capital-friendly tax policies.
Meanwhile, Track Town Nancy has demonstrated her economic illiteracy in Salem with her proposal as Chief Sponsor of House Bill 4006 to establish a “Task Force on Economic Development” and declared it an emergency. The very notion that government can “direct” economic development through a task force or any other bureaucratic mechanism belies an understanding of how private capital actually works. Government central command-and-control economies are incompatible with vigorous market economies; Track Town Nancy is fundamentally a Fabian Socialist at heart, and this proposal confirms it.