Economy Watch: How Oregon Cities Stack Up

Jon Perr

Every day brings new signs that Oregon has emerged from the depths of the recession.  The economy has produced 6,100 new jobs each month since November.  February's unemployment rate was 5.6%, down from 6.4% a year ago.  And state revenue coffers have netted a $665 million windfall (which, as Russell Sadler discussed here, will be sadly squandered thanks to the Kicker).

But compared to the rest of the country, though, Oregon is still lagging.  That's the message from the 2005 Milken Index of Best Performing Cities.

The Milken Index rates 200 large cities and 179 small metropolitan areas in terms of their ability to produce and retain jobs.  It measures job, technology, wage and salary growth over both a five-year and one-year time frame.  Not surprisingly, cities in Florida, California and the Southwest continue to dominate rankings, with their exploding service sectors, healthy tourism industries, an influx of retirees, and growing overall populations.  Also predictable, the Midwest brought up the rear, with Michigan and Ohio contributing 9 of the bottom 10 major metro areas.

For the Portland-Vancouver-Beaverton region, the picture is mixed.  The area is in the middle of the pack, ranked 95th in the Milken Index.  Portland did jump 25 spots since the 2004, showing both the quick pace of the recovery and the depths of the Oregon recession.  (In 2003, the Portland area ranked 141st, but in 2002 was as high as 55th.) While helped by its 2005 job growth and highly-ranked high tech sector, the region's dismal five-year job performance (164th of 200) weighed down the Portland metro area.  Other Oregon cities were also in the middle of the large metro rankings. Eugene came in at 96th (up from 81 last year), while Salem dropped 30 places to number 100.

The explosive growth of Bend is reflected in the Milken ratings.  Bend came in 2nd in the index of smaller cities, with Medford ranked 26th out of 179.  Corvallis came in 117th.

Yes, the Oregon is definitely headed in the right direction.  But there's still a long way to go. 

UPDATE: For more information regarding how Oregon compares to other states across a range of economic, education, demographic, governmental and other indicators, see the Oregon Business Plan 2006 Competitive Index. For a library of other sources of economic and demographic data for Oregon, see Perrspectives Oregon Resource Center.)

Comments

  • Phen (unverified)
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    I looked at this report, and didn't find anything indicating that we are going in the "right direction." Lots of data about growth per se, but nothing about education, health care, environmental protection, crime, drugs, etc. I think most progressives are aware of "the limits of growth" as an indicator of progress.

    For a more well-rounded picture, check out the Redefining Progress website and especially their "Genuine Progress Indicator." This project got some media coverage a few years ago, but may have lost momentum; not too surprising, given the prevailing ethic about what we should be measuring.

    We should train ourselves to react critically (I didn't say negatively) to any such published comparisons. Nearly always, they reflect the agendas and biases of the publishers. The Milken Index appears to be a good example.

  • Bert (unverified)
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    Hey,

    I live in a household with more than one person who is "unemployed" but would be called a "discouraged worker." I have a hunch that part of the reason why the "unemployment rate" is down is because people aren't lining up to flip burgers, etc.

    If you're going to post more on this, how about looking into labor force participation rates and quality of jobs?

  • blizzak (unverified)
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    Unemployment figures are under-representative and over-representative. People who have given up on finding work are not counted (like Bert said). On the other hand, all you have to do in Oregon to keep getting unemployment checks is call a phone number and "push 1 if you looked for work for 40 hours this week" -- there are significant numbers of people counted as unemployed who aren't really looking for work.

  • Jon (unverified)
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    I agree with Blizzak about the need to decipher the unemployment statistics.

    For example, even though Oregon created thousands of new jobs in February, the unemployment rate rose as people sitting on the sidelines jumped back into the market.

    And one sure indicator of Oregon's continued weak picture for workers is its dismal labor force participation. At 61%, Oregon is a full 5% below the national average. For more, see:

    "The Good, the Bad and the Ugly at the Oregon Leadership Summit."

  • josh (unverified)
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    To your point on the economy. More than $400 million of new investment came into Springfield alone, not including the new transportation infrastructure. By the end of the decade that number will be more than $1 billion with the creation of more than 5,000 new jobs. When you add Eugene to the equation this year's total was over $700 million of new investment in the Eugene-Springfield metro area (yes, Springfield outpaced Eugene by $100 million).

  • Steve Bucknum (unverified)
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    I frequently watch the KZTV out of Bend. During their news shows, at least once per half hour, the announcers make a comment where the term "Central Oregon" is used inter-changably with "Bend". I call it the Bend-centric view.

    So, when Jon wrote:

    "But compared to the rest of the country, though, Oregon is still lagging. That's the message from the 2005 Milken Index of Best Performing Cities."

    I noted that he to has a mix up of the difference between a State (or region) and a city. I call this the Portland-centric view of Oregon.

    Having said that (and I must because people in Portland repeatedly think that their very tiny part of the State is the State), Jon does go on to talk about towns around the State.

    Here in Crook Co. we are getting a huge influx this year of new population. The three Counties of Central Oregon are growing at a rate of 10,000 people per year - which will in ten years mean that a group about the size of all the people in Eugene will move here. For those of us that love this area, it is frightening. Many of us are looking around for someplace to move - away from all these new people.

    And the business base here is very stable. Les Schwab tires is the largest private employer - we make more recap tires here for small trucks than anywhere else in the Country. We have large government employers with the Forest Service and BLM. We have some secondary lumber products plants making veneer products, window frames, etc. We do not have any large timber operations left. But the fastest growing sector is construction and real estate sales.

    I view this then as a bubble. We have the best employment figures in a decade. But it is all based upon new people and their money coming here. They aren't bringing permanent jobs - except a few more service oriented (read that low wage) jobs. We cannot depend upon sustained growth to keep all those construction workers employed. While we have more dry land that could be developed without hurting anything than all of Multnomah County - we lack one key thing in the long run for development - water. There are about 40,000 acre feet of water unallocated up at the Prineville Reservoir on the Crooked River. But that is Federal Water, likely to be used to support habitat versus population growth. (40,000 acre feet of water equals one square mile of water that is 62.5 feet deep - that is a lot of water.)

    One thing most people don't understand is how decisions over the last decade affect water use in Central Oregon. The Oregon Dept. of Geology has ruled that surface water and ground water are linked due to the geology of the region. This means that any new commercial well has to buy water rights from another commercial source (such as irrigation) and in that transaction leave 10% behind for stream flow. So, as we add people, we dry up land and decrease agriculture.

    What does all of this mean for the regional economy of Central Oregon? It means it looks real good right now, but has a rotten center that will in the long run catch up to us and make life in the future less comfortable, less well sustained, and out of balance both economically and environmentally.

    In other words, this part of Oregon's economic viability is not sustainable. All it will take to turn our golden economy into a horrible depressed mess is a national event that affects real estate value. Higher interest rates, another national disaster, or a terror attack could stop the real estate land rush that is the foundation of our economy at this time - kill it literally in a day.

    So, I also disagree with Jon's conclusion about "right direction". The economy of this region of Oregon is as fragile as an eggshell. Looks good on paper until the first crack appears.

  • Zarathustra (unverified)
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    I've been to lazy to get the data an break out the numbers, but did anyone notice unemployment by sector and age? I'm beginning to think that the current, constant 5% unemployed base has little to do with corporate efficiency, downsizing and everyone buying new hardward to stave off Y2K bugs.

    It seems that what was difficult before, getting a new job after age 40, has become nearly impossible. I am 45 and am asked about every 3rd interview, "Don't you think you're too old for this job", or "I could imagine you being my peer but not my subordinates", etc. If this is a common occurance, given the demographic bulge that is the baby boomers, maybe it accounts for that permanently unemployed core to the numbers that has grown consistently since 1995.

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