Oregon Beats Washington, Again.
Chuck Sheketoff
The Oregonian has a nice little story about how workers’ compensation insurance costs are going up 7.6 percent on average in Washington next year. Meanwhile, the pure premium rate (the rate set by the state of Oregon that insurers use to calculate premiums) in Oregon will drop 1.3 percent on average in 2010. This is the 20th consecutive year (PDF) without a rate increase in Oregon.
There are a host of reasons why businesses locate and stay in Oregon, and Oregon’s success with workers’ compensation cost control is one of them.
Next time you hear someone fighting against Measure 66 and 67 claim that the measures will drive businesses over the borderline to Washington, first remind the person that businesses that don’t make money in Washington pay a “business and occupation” tax greater than Oregon’s current or proposed minimum tax.
Then let the person know that workers’ compensation insurance costs are falling in Oregon, but rising in Washington.
Oregon beats Washington, again.
Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org
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connect with blueoregon
Dec 1, '09
But not where it matters most to Oregonians:
Unemployment
Oregon 11.3% Washington 9.3%
Advantage: WASHINGTON
10:28 p.m.
Dec 1, '09
Hmmm, strange. Higher taxes, lower unemployment. Maybe we should try that.
10:39 p.m.
Dec 1, '09
I agree that Oregon's worker's compensation costs give us a competitive advantage over many states, but the comparison with Washington is a little misleading because they also have a somewhat different system.
Washington is the only state that assesses a tax per employee hour worked rather than a per employee premium. Like most innovations, this works better for some businesses and worse for others. W
ashington's system is also entirely state run, while Oregon employer's can purchase coverage from SAIF or Liberty Northwest. You could say Washington has a "single payer" worker's comp system, while Oregon has a competitive system with a "public option" (SAIF).
Though a direct comparison between the two is therefore somewhat difficult, generally the overall costs have been fairly comparable in recent years although for the most part Oregon has had a small advantage.
Dec 2, '09
I think this problem is widespread! They are not the on;y state experiencing this economical mess. Recessions tend to lay waste to ideas of vacations or recreation, and that may have been the driving factor behind the Six Flags Parks Corporation filing for Chapter 11 bankruptcy protection. Perhaps not, however – Six Flags Parks has been in trouble as a company since the early 2000s, and had a somewhat shaky history prior to that.
Dec 2, '09
Just to repeat the obvious and propagate it more, Washington's unemployment rate is lower.
But it's not only that...employers in Oregon almost never pay what employers elsewhere pay. They always thump the same general line "but it's just so much better here!"...which, of course, is really at the mercy of your own point of view. Anywhere can be nice if you're living on a more comfortable income. So even if you do get a little work here for awhile, it's not like you can always save up enough to get by well during the tough times. I can give first hand evidence for this...I am a tech consultant who has worked in Portland for 10 years. The pay rate I get quoted for out of state contracts compared to in-state contracts is crazy. It's almost always 25%-50% better, and it's not just a result of cost of living like people seem to think it is. Even the remote telecommute work I do from here in Oregon pays that much better.
Dec 2, '09
Off topic, but in my experience the Washington L&I (workers comp.) system treats injured workers more fairly than the Oregon system. An injured worker in Oregon may face a very aggressive battery of lawyers to receive benefits (particularly if Liberty Northwest is involved) whereas in Washington workers are less likely to be "out lawyered" as they try to get medical / time loss / disability payments.
Saving money on worker's comp premiums is important, but the point of the system is also to protect injured workers.
Dec 2, '09
Fortune 500 Companies
Oregon: Nike Precision Castparts
Washington: Costco Wholesale Microsoft Amazon.com Paccar Weyerhaeuser Starbucks Nordstrom Expeditors International of Washington
I've always wondered why there was always such a discrepancy on that list.
Dec 2, '09
Forbes Magazine (that liberal, anti-business publication) does an annual report ranking all 50 states titled "The Best States for Business." Forbes looks at 33 different data points (including taxes). Oregon ranked as the 10th best state in the country to do business this year (after the new tax structure had already been factored in). Not bad. Washington ranks higher (even though their "business costs" ranking which includes taxes is substantially worse than Oregon's). Here is a link to this year's report -
http://www.forbes.com/2009/09/23/best-states-for-business-beltway-best-states_table.html
It is very unfortunate that so many people in their quest to "sell" their side of the current tax debate, are trashing Oregon's business climate. The fact is Oregon is one of the best places to own and operate a business anywhere in the country. You would think business association's and chambers of commerce would want to tout this fact rather than run around like Chicken Little and try to convince people the sky is falling. Oregon is a very pro-business state as proved by the recent Forbes report.
Dec 2, '09
Hey Chuck,
You forgot that Oregon beats Washington is something else as well.....unemployment. And handily might I add. In fact only a couple of states can beat Oregon in unemployment, wow we should be proud! I am liberal, but hate to see my fellow liberals pride our selves on stupid little facts, and ignore the big picture - JOBS!
Dec 2, '09
Great thought Kari - as an employer myself, I can attest to the brilliance of raising taxes related to job creation. I would personally love to have a higher tax bill, it only makes logical sense that I would go out and hire additional staff when my expenses go up. I think taxing our way out of this recession is a wonderful idea...
Dec 4, '09
I'll remember this when a Washington car runs me down, because we make up unique pedestrian rules and then expect that someone border hopping for no sales tax will know them.
Amen, Jesse. The hubris is incredible around here! I think you and Mike are BOTH right, tho.
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