In December, the Oregon Office of Economic Analysis noted: full employment is finally within sight. It is not here yet, and the current economic expansion is far from perfect, but a long stretch of modest gains in recent years have cumulatively delivered significant progress across the economic spectrum. The number of actual jobs and job openings posted by businesses has never been higher.
This is good news, especially for Central Oregon, seeing a 15.4 percent employment gain in the last ten years, nearly twice that of Portland with an 8.8 percent gain. In fact, based on Industry diversification, wage growth, overall job growth and employment gains in technology sectors places the Bend/Redmond (Deschutes County) MSA #8 among 201 small cities.
An average of 200-300 people are moving to Deschutes County each month. Even if I didn’t tell you this you can get an inkling of our growth via the traffic (rush-hour traffic in Bend?), the shortage of housing, packed restaurants and our low unemployment rate.
Most economists and the outlook commentaries on the pages of this issue are relatively bullish about the near term anticipating that this year will look much like last year only better…or as Jim Schell predicts 2016 in Central Oregon, especially in Bend, will be 2015 on steroids.
Economic Development for Central Oregon (EDCO) has played a significant role in securing a diversified economy and you can see this in the varied industry clusters that are emerging and thriving: aviation, high tech, bio-science, outdoor and micro-brewery. These new sectors of our economy are complimented by the burgeoning tourism industry increasing the incomes of everyone from retailers and restaurants to dog sled rides and fly fishing shops.
The Central Oregon Regional Solutions Advisory Committee is adding to our region’s economic vitality via our substantial arts community by working to attract businesses and individuals who are accustomed to and often require a culturally rich environment where they live and work. This has a profound economic and socioeconomic benefit.
EDCO just ended its 2013-15 planning horizon, showing that more than $500 million has been injected into the region’s tax base with 124 completed projects and more than 1,700 new, well-paying jobs (the average wage per job, across all projects EDCO worked on, exceeded $50,000. For a number of companies, the average wage is more than $100,000).
Despite negative media reports after years of lackluster wage gains nationally and in Oregon, average hourly earnings for all workers are now increasing faster than inflation.
Through its six regional offices EDCO is constantly working on investment or location decisions and currently in the final stages with 174 companies that collectively would create nearly 2,000 new jobs and invest $2.1 billion in new capital investment in the tri-county area.
On the commercial real estate front (entwined with the growth in the industry clusters) Andi Edmonds reports that she is confident development will be the prevailing theme in 2016 and the years to come. Construction is in full stream across the spectrum from in-fill residential and multi-family housing projects, building and expanding health care facilities and renewed interest in office, industrial and retail sites (Crane Shed Commons, Atrium, Third Street Marketplace, Market of Choice and St. Charles Health Systems clinics).
According to Steve Curley Central Oregon continues to be a hotbed of activity for entrepreneurship as many new businesses are being started. In the past year the local Small Business Development Center has worked with 343 clients who have created or retained 60 jobs, adding $2.1 million in capital investment to their businesses while they saw an increase in sales of just over $5 million. The increase in sales is double the prior year’s number. [Start-ups are encouraged to contact the SBDC for no-cost one-to-one business advising, business planning, educational workshops, market research and assistance in accessing capital.]
Unfortunately, there are always risks to this positive outlook. High volatility in global financial markets, the Federal Reserve’s interest rate increase, uncertainty over China’s output, the plunge in oil and the significant corrections in U.S. equity markets have all given rise to the question of whether or not the U.S. is headed into a recession in 2016.
Still, Gary O’Connell concludes that our national economy is currently on a stronger footing today than in recent years, which should allow us to maintain economic growth despite the difficult environment.
On a local and state level what remains to be seen is how legislative agendas will impact our economy. Roger Lee notes in his commentary that aggressively and arbitrarily increasing the minimum wage, what we prefer to call the “entry level” wage, will have the effect of increasing unemployment, boosting inflation locally (if entry level workers arenow paid more, most existing employees will also expect raises), and perhaps worst of all, exacerbating the downward labor participation rate among our emerging workforce (ages 17-24).
If approved, this will impact EDCO’s efforts and ability to move, start or grow companies in our region.
A proposed initiative for the November ballot, called IP28, would impose a 2.5 percent gross receipts tax on Oregon C-corps with revenues of $25 million or greater. The nonpartisan Legislative Revenue Office has estimated that IP28 would increase taxes on Oregon sales by more than $5 billion per two-year budget cycle — by far the largest tax increase in our state’s history.
Because IP28 would be a tax on gross sales — not profits — businesses would be required to pay the tax regardless of whether they’re making a profit or not. That would force many employers to raise prices or cut jobs in order to stay in business. It would impose billions in new taxes on the sales of products and services that Oregonians buy and use every day – food, electricity, insurance, health care, medicine, gasoline and other essentials. That would especially hurt small businesses and families on fixed incomes.
Central Oregon has survived some very challenging times and as our economy continues to improve and we all work hard to maintain such a positive recovery any legislation that would hamper growth and prosperity should be looked as negatively.