Incomes Down
Jeff Alworth
There was a pretty shocking story in the Sunday Oregonian about jobs and incomes in the state. A couple of the most disturbing trends:
With an economic recovery more than a year old in Oregon, some of the first concrete readings on how the recession changed Oregon's economy show that the state is increasingly relying on low-paying service jobs -- some offering diminished wages....
The unpublished Oregon Employment Department report found the state's economy lost nearly 4 percent of its jobs between January 2001 and July 2003. But low-wage industries -- those paying less than $31,000 a year -- lost only 2.4 percent of their jobs. High-wage industries -- those paying $37,900 or more a year -- dropped 4.8 percent....
The median household income in Oregon in 2002 and 2003 averaged $42,200, down 6.5 percent from $45,150 in 1999 and 2000, after adjusting for inflation. During the same period, household income nationwide declined 3.8 percent to $43,350, Census figures show.
Thoughts?
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Sep 21, '04
I'm not surprised in the least. The tech bubble was responsible for a lot of those inflated salaries in 1999 and 2000. Silicon Forest saw a number of startups that burned through their initial capitalization quickly, and then went under. This is what happens when a bubble bursts. It was never sustainable.
12:07 p.m.
Sep 21, '04
Of course, if we look over a longer period of time, you'll see that the tech bubble was just masking a different downward trend in high-paying jobs. Which kind? Timber jobs. According to the Atlas of Oregon, from 1988 to 1998, Oregon dropped from 8.6 billion board feet of timber harvest to 3.53 billion board feet - almost a 60% reduction. That was accompanied by a drop in forest products employment of 68,800 jobs to 49,000 jobs. (pp 74-75)
Now, there are all kinds of good reasons to reduce some timber harvests, but the key issue is this: Oregon's natural resource economy slackened in the 90's, and that drop was masked by the tech bubble/boom.
Now that tech has collapsed (returned to normal?), the question remains: What will Oregonians do for a living? What are our leaders doing to create employment opportunities? How can we, as a public, invest in ourselves (either through government funding or through private, nonprofit initiatives)?
1:27 p.m.
Sep 21, '04
Oregon now has more payday loan shops than McDonalds, and Oregon is producing more bankruptcy filings than college degrees. See the Oregon Center for Public Policy's news release (http://www.ocpp.org/2004/nr040901.htm) about our biennial report on the state of the economy from the perspective of workers. The report, "In the Shadows of the Recovery: The State of Working Oregon 2004," was covered by the Register Guard (http://www.registerguard.com/news/2004/09/05/c1.cr.economy.0905.html) and AP. The Oregonian and The Business Journal have used facts from the report in other stories.
We expect them back from the printer in early October. Contributors to the OCPP will get a copy; others will have to pay $15. To learn when they are ready to order, sign up for OCPP's email updates at http://www.ocpp.org/XB-27FR.htm
Sep 21, '04
Should Oregon Exist?
I live here now, trying to make a living, and currently unemployed, but I assume I'll find something eventually.
I'm interested in the bio-eco-economic question. I ask "why should there be a large human settlement in this part of the planet?"
It has been cogently argued that vast swathes of the great plains are being depopulated, and should be depopulated because there is simply no rational economic reason for even current population levels to live there. Give it back to the Bison and regrow the prairie.
0) The Port of Portland? Hardly a natural port, and what industry does it really serve as natural resource extraction declines?
1) The Timber Economy? Well that's still there to be exploited.
2) The "Natural Beauty" Economy - that's a useful comodity to attract tourists and people who make their money elsewhere and wish to retire here. But that's in competition with 1.
3) Silicon Technology - somewhat compatable with the "natural beauty" economy due to the desire of people who are highly paid and highly educated to live in a clean beautiful place. But technology wages are declining as world wide education levels increase.
4) Biotechnology - kinda fits with the OSU agricultural industrial complex and the "ecotopia" fantasy, and with the OHSU medical industrial complex. But we're not the first state to imagine salvation in biotech.
5) Low Wage Production - Oregon might be a natural place for low wage production..... not a place to put your headquarters maybe, but a good place to staff up, say, "call centers" with relatively low wage employees. I sure don't want one of those jobs.
6) Why is Nike and the shoe industry here, of all places?
So what is the bio-eco-economic niche of a city in a forest?
Of a state with no real port?
Of a place South of Seattle and North of the Bay Area?
Its a problem. Why should the state of Oregon exist as a populated region in this day and age? (Other than the fact that people are already here which is a fine reason, but which isn't enough reason to prevent the steady depopulation of the great plains?)
I hope we can figure out a reason because I like it here.
peace, Miles
Sep 21, '04
From what I have seen natural resources (timber, fishing) can't even support the populations of small coastal towns, much less a place like Portland.
I come from coastal northwestern CA, an area with lots of natural resources and lots of poverty... so I don't see much point in depending on that to sustain large populations. I've seen plenty of deforestation, up to my back door, in my 35 years on this earth, and the resulting problems: mudslides, heavy pesticide use (and associated human health problems), overdevelopment, destruction of waterways. And everyday human costs, like mill accidents (often fatal), rampant meth addiction (young loggers working overtime and/or night shifts).
Timber harvesting did pay well for a while, but it obviously is not a sustainable way of life they way it's been done for so long.
What natural resources should do is sustain people who still live a substance lifestyle (such as indigenous Americans) and ecotourism, which is a growing industry.
For example, in Arcata, California, a natural marsh system is used to clean city water, as it supports resident and migrating bird populations along the pacific flyway, and attracts bird-watching enthusiasts to come to town and spend money. http://www.arcatacityhall.org/
But anyway, if natural resources are the key to supporting populations, why should there be huge populations of people, say, in southern California deserts?
So Cal doesn't have enough water to support themselves, they take it from the north. And our fisheries suffer as a result. Our native salmon are threatened (example: Klamath river coho) or endangered (Sacramento river chinook). http://www.nwr.noaa.gov/1salmon/salmesa/
Farmers in Klamath Falls depend on Klamath river water that should naturally be flowing out to cooling marshes and downriver, supporting native fish populations. If we are going to use natural resources, we should do so in a sustainable way.
As for high tech, I work in that field now... and what I see there, is that with the global economy, it's pretty tough for a western programmer to compete with a third world programmer in the wage department. Companies don't support American workers, because they don't have to.
Sep 21, '04
From what I have seen natural resources (timber, fishing) can't even support the populations of small coastal towns, much less a place like Portland.
I come from coastal northwestern CA, an area with lots of natural resources and lots of poverty... so I don't see much point in depending on that to sustain large populations. I've seen plenty of deforestation, up to my back door, in my 35 years on this earth, and the resulting problems: mudslides, heavy pesticide use (and associated human health problems), overdevelopment, destruction of waterways. And everyday human costs, like mill accidents (often fatal), rampant meth addiction (young loggers working overtime and/or night shifts).
Timber harvesting did pay well for a while, but it obviously is not a sustainable way of life they way it's been done for so long.
What natural resources should do is sustain people who still live a substance lifestyle (such as indigenous Americans) and ecotourism, which is a growing industry.
For example, in Arcata, California, a natural marsh system is used to clean city water, as it supports resident and migrating bird populations along the pacific flyway, and attracts bird-watching enthusiasts to come to town and spend money. http://www.arcatacityhall.org/
But anyway, if natural resources are the key to supporting populations, why should there be huge populations of people, say, in southern California deserts?
So Cal doesn't have enough water to support themselves, they take it from the north. And our fisheries suffer as a result. Our native salmon are threatened (example: Klamath river coho) or endangered (Sacramento river chinook). http://www.nwr.noaa.gov/1salmon/salmesa/
Farmers in Klamath Falls depend on Klamath river water that should naturally be flowing out to cooling marshes and downriver, supporting native fish populations. If we are going to use natural resources, we should do so in a sustainable way.
As for high tech, I work in that field now... and what I see there, is that with the global economy, it's pretty tough for a western programmer to compete with a third world programmer in the wage department. Companies don't support American workers, because they don't have to.
Sep 21, '04
I've heard a critique of the economic history of Oregon that it is, and has always been, about extractive industries. First there was timber and mining which are clearly extractive. Next came aluminum production which was based on cheap power from the dams. Since Enron and the "power crisis" we lost that industry.
Even the high tech sector is driven by cheap water. If water were'nt so plentiful and affordable for Intel they would relocate. It seems that Intel and Mentor Graphics serve as anchors for Oregon's tech economy.
Today we even have extractive pursuits in health care. Our largest hospital chain Providence gets most of its profit in Oregon and sends it to its headquarters in Seattle to shore up the rest of the system.
And to supplement Kari's point about the decline in timber jobs, there was also an increase in mechanisation that allowed fewer workers per board feet.
In any case, I'm very worried about a future of low-wage jobs.
3:43 p.m.
Sep 21, '04
I guess progress cuts both ways, as far as the natural resources industry goes. It's certainly cheaper to harvest timber and grow food, which is good for people in the cities, but not good for the family farmer or the logger. Huge increases in productivity make it next to impossible for the little guy to compete, because they can't afford the very large investments in equipment.
Organic farming and free range beef and poultry seem to work better for smaller operations. The yield per acre of a specialty organic farm probably beats a large scale grain operation, and free range beef cattle seem to be a way for a rancher to stay in the market, with more and more meat packing companies turning to vertically consolidated feedlots.
While far too many people in Oregon go hungry because they cannot earn enough to cover the basics, folks at the median income and above may have the option to spend more on food that fits their consumer preferences. I think there is still room for these segments of the natural resource economy to grow in Oregon.
As for the future of high tech, I wonder if our disinvestments in higher ed threaten our ability to keep the necessary edge. It seems to me that advances in fields like medical technology, computer-aided design, and software development are accelerating. But is our education system keeping up? I know our universities are doing what they can just to limit the growth in tuition, and I don't know how a high school teacher can handle a calculus class with 45 kids in it.
The generation that came into adulthood shortly after World War II came through the world's best education system. I have to think that programs like the GI Bill, which provided great home-ownership and educational opportunities to veterans returning from the wars, deserve the lion's share of the credit for the incredible economic growth that took place from 1945 to 1968. Of course, the top income tax rate under Eisenhower/Nixon was 90%. Those fabled fifties.
Some variation of the phrase "investing in children" is used so often in political speak that it's probably lost its punch, but I know without a doubt that everyone thinks that's the most important thing we can do, as parents, as a society, and just as plain old regular folks living our lives.
I know the generation that fought World War II continued to make big sacrifices for this country, as they lent their support to programs to keep our country strong. With record deficits and widening gaps between the rich and poor, do we even have the same choices available to us today? I think we do, as hard as it is to see through the fog of war and a stagnant economy. I think we have to insist on living in a state and a country where those big, smart investments in education and home ownership are a top priority. From that base of economic strength, we can help turn around segments of our economy--like timber--that have been left behind by huge shifts in technology and the global marketplace.
We can't let ourselves be slowly boiled into submission like frogs in a pot. We'll have to fight against people who view the world as a kind of every-person-for-themselves Mad Max wilderness, and whose fiscal policies turn their philosophies into self-fulfilling prophecies, but I think that's the only way to keep our community strong.
Sep 21, '04
Definitely a few points to ponder here. I, myself, know at least three people who have taken pay cuts to get new jobs. It seems likely for this to happen, though, because companies have to regain traction after trying to be competetive during the boom. I think in the end people are coping with the cut in salary in order to enjoy other benefits that the new job might offer (like sanity, and health care programs). As for what the future industries might be... I hope and pray that the biotech comes here so they can buy our (intended to be hi-tech) building and I won't have to drive 20 miles to and fro each day.
7:21 p.m.
Sep 21, '04
I was lucky enough to find a new (better, sustainable, lucrative) career after the the bottom fell out of the tech market. Because of it, however, it's going to be a while before I'm financially stable again. God, I miss financial stability and being able to give back to my local economy in the form of purchasing footwear (no, not Nike, lol).
What nobody's mentioned, and maybe it just stands out to me as I grew up in Salem, but when you close one of the (if not the) largest employers in a city (Fairview) - especially if that city happens to be isolated from many other industries, it takes its toll. First locally, then it spreads like a cancer. I honestly can't remember how many people Fairview employed at hits highest capacity - but it was a lot.
I know someone who JUST got a permanent job after being laid off from Fairview in 2000 - or was it 2001. I've lost track of time, I think. Another friend of mine was forced to retire early then had to go back to work for a while to get her full retirement. Other folks went to low wage jobs (Fairview paid fairly well - most jobs were union). Most of these people were under-educated. Mostly just high school diplomas. The doctors and nurses had degrees (obviously), but most other folks didn't. These folks had worked at Fairview for years, slowly building up their union wage to something pretty damn decent. Then it was gone. These folks were then forced to go work at lower-wage jobs - some of them in the service industry, some of them at lower-paying independent care facilities. Some of them just up and left. My friend's brother, who also worked at Fairview, uses most of his wage from his new job to pay for the gas to get to and from as he has to commute to somewhere in the Portland area but doesn't want to disrupt his kids' lives to move.
Though I can understand some of the reasons that Fairview was closed, I don't know that I'll ever agree with its closure or the way that it was done.
Now, while the tech boom was going on and the rest of the state was prospering, Salem never really saw any benefits. Sure Salem continued to grow population-wise, but a lot of that was to support the new low-wage jobs in the area at, like, the Dollar Tree. So when the tech industry fell, timber had fallen (no pun intended), Salem was already mired in its own little recession and it's just gotten progressively worse.
Maybe Salem's problems have no direct effect on the state as a whole. I dunno. I'm no economist. This is all my personal oservation. It's just something that's really close to home for me because everyone I grew up with relied at least partially on income from Fairview to put food on their tables. But as I see the new Arby's and Jamba Juices spread out to old farm land - which, of course, just pay minimum wage, and as I see two Wal-Marts within the city limits knowing how and why Wal-Mart chooses locations, and as I see my good friend starting over again at 54, it's painfully obvious to me that something's got to be done. However, much like just about everyone else, I've got no brilliant ideas.
Sep 21, '04
Just a quick note on the myth of high-paying timber jobs.
Not many counties were more dependent upon timber than Josephine County. In the 70s when the timber economy was humming, how did Josephine County's per capita income rank in Oregon? Near last to dead last the entire decade (see this link: http://olmis.emp.state.or.us/pubs/single/pcpi.pdf).
Those jobs in the mills and forests were also amongst the most dangerous jobs in terms of workforce injuries.
11:33 p.m.
Sep 21, '04
There are all these people moving here, and we don't even have real jobs for the people who are already here. It's time to advertise that times are tough here, until we return to some sort of balance. Bring back Tom McCall. Screw smart growth -- how about no growth? Saying "It's just inevitable, we're going to have so many hundreds of thousands more," when the economy here is shaky in the extreme, is a very scary scene.
12:27 a.m.
Sep 22, '04
Folks often wonder why housing is so damned unaffordable here - Portland often ranking in the top five for unaffordability. (Some sprawl-apologists like to blame the UGB. Bah!)
It's really quite simple. Lots of people want to live here. That does two things - it drives UP housing costs, and it drives DOWN wages. Presto - an affordable housing problem.
So, the question remains - what will Oregonians do for a living? How can we invest in ourselves, either through public agencies or private nonprofits, to generate family wage jobs en masse? We can't all work in the athletic shoe or microbrew industries.
Sep 22, '04
I'm sure you will all arrive at the answer to the low wage problem:
We just need a higher minimum wage and greater tax burden on the wealthy!
What? We already have one of the highest minimum wages in the country?
But...What? We already have one of the highest income tax burdens in the country too?!?
Hmmm. I'm confused. I'm sure it will all be clear if John Maynard Sheketoff will once again lecture us on the pressing need for bigger government.
12:25 p.m.
Sep 22, '04
When I saw this article, I considered going on a rant about the failures of the GOP agenda, seeing this clearly through the lens of my commie values. Instead, I thought it might be an interesting topic for discussion, so I just posted the pith of the article without my usual heavy-handed commentary.
My take is this. The anti-taxers have had nearly 15 years to hammer away at the way we fund services in Oregon. This is accompanied by simple rhetoric--big government is bad. No matter what happens, the rhetoric and solutions stay the same. Even after having given fair trial to this theory, proponents still blame the evil big government, even though they've been shrinking it for years. Clearly, it hasn't reached their utopian ideal, which presumably is a feudal kind of anarchy, with business standing in as lawmakers. I guess short of that, they'll always bemoan "big government."
On a national level we see the same thing. Poor Democrats haven't run anything for years (never mind liberals, who have to look back decades), and yet they're still blamed for the economy's failures--at least by Bush's bizarro world reasoning.
Good jobs are being exchanged for bad. Median incomes are sinking. It's all the Democrats' fault. Oh wait, I mean, it's a healthy economy.
Or something.
Sep 22, '04
What about wind power? Since Kari issues a charge for us to think about what jobs we'll have in the future, what about continuing to build wind farms in some of the farming/ranching parts of the state? Use the projects as the source of jobs in construction then ongoing maintenance and operations. Put a surcharge on all power generated to fund local schools and infrastructure.
Seems like it boosts the tax base, is sustainable and could create some jobs.
1:01 p.m.
Sep 22, '04
So, Rorovitz - you think that could be our generation's "Hoover Dam?"
Not a bad idea... Only problem is that utilities are already so friggin' high (and getting higher in October w/ NW Natural having an 18% rate hike and PGE sure to follow as, ironically, a lot of their gizmos and gadgets run on natural gas). Since it's unlikely that even with a reduced cost in power generation that rates would drop much, adding surcharges to the wind-generated power would only put more of a burden on low-wage workers. Unless, of course, we all got to have our very own windmill to generate our very own power and then paid the state a small fee to have them.... but... PGE would never let that happen. lol.
Not to knock the idea entirely - it's actually a pretty good one. Because what I was thinking as I was tooling around rural Columbia county today was that we need some sort of Hoover Dam - some sort of sustainable public works project. Something that would pay for itself. That's really as far as I got. I'll think on that as I try to rid myself of this cold - this stupid, stupid cold.
And hey, Kari, who's to say that that public works project couldn't be generating athletic shoes and beer for the needy. ;-) Not to mention high-speed processors.
6:51 p.m.
Sep 22, '04
Port of Portland just announced it's cutting 81 jobs. Bad news on two fronts - one, 81 more people out of work and two, two major shippers announced they were cutting their business which, of course, resulted in the job cuts.
http://www.katu.com/business/story.asp?ID=71299
<h2>and the beat goes on...</h2>