Why is unemployment so high? (Portland: transplants, sales, find a job)

[looopson]

This has probably been previously asked, but does anyone know why unemployment is so freakin' high in Oregon? I was discussing it with someone the other day and we couldn't come to a conclusion.

[Pfhtex]

Industry has slowed down (logging and milling); also, doesn't OR already have a higher than average baseline unemployment rate connected to the homeless situation?

I may be completely wrong here.

The top ten states that are "going bankrupt" are doing so in part to a combo of having a state income tax, and having to pay a lot out in unemployment claims.

Has there been a push to reduce/repeal the state income tax and invoke a sales tax?

[Wicked Felina]

Originally Posted by Pfhtex

Has there been a push to reduce/repeal the state income tax and invoke a sales tax?

If there has been, I've never heard of it. Oregon taxes income, retirement and SS payments. I doubt that they'd trade all of that tax for a sales tax. Sooner or later (sooner, unfortunately) a sales tax will be implemented. But a trade? The state would never give up money.

[PNW-type-gal]

Originally Posted by Pfhtex

Industry has slowed down (logging and milling); also, doesn't OR already have a higher than average baseline unemployment rate connected to the homeless situation?

I may be completely wrong here.

The top ten states that are "going bankrupt" are doing so in part to a combo of having a state income tax, and having to pay a lot out in unemployment claims.

Has there been a push to reduce/repeal the state income tax and invoke a sales tax?

Yeah, I think you're pretty much wrong. The Portland unemployment rate - since this is the Portland forum - was around 5.6% in 2007, compared to the current roughly 12%. The homeless situation has gotten worse because of the bad economy, but it's more a result than a push.

The Wall Street Journal thinks that one of the factors is that Portland is a "youth magnet" city, attracting the young and unemployed:

'Youth Magnet' Cities Hit Midlife Crisis - WSJ.com

I think it's a combination of things - the longer-term impacts of logging and manufacturing shut downs on the middle class, the on-going shrinking of the high tech companies and the loss of the construction/construction-related jobs that had boomed in the last 5-10 years.

[davefr]

1. It's an attractive place to live so people are somewhat reluctant to move in the event of job loss.
2. Retirees are competing in the workplace because a large chunk of their 401K have gone "poof" and our cost of living is high.
3. Traditional industries like logging and fishing are on the decline and there's a trickle effect throughout our state economy.
4. Our high minimum wage supresses entry level job creation.
5. The political climate has not done enough to embace growth of new businesses and industries.

That's just a start.

[subsound]

I think it's a combination of socio-economic factors that mostly seems small, but have rolled up in a really bad economy. Homelessness is not one of them itself, the factors there are more complex.

What I see is that the economy in the area is not as diversified as many, concentrating in raw materials, manufacturing, raw produce and service (I have a pretty broad definition for service, from food prep to doctors). Since many include high cost ecologically friendly products (as well as organic produce) and timber, which applied directly to excess income (debt spending as well) and housing, Oregon took a very big hit. Service industries tied to it, including health care's increase in uninsured, also took big reductions in income leading to layoffs and even fewer people able to buy things in the local economy. With larger amounts of people dependent on local spending for service, economic shocks are felt more dramatically.

There are few large corporate regional/national headquarters or magnet locations here as well (most go North or South), though there are a few like Nike, Wells Fargo, Intel, Kaiser. Larger companies often can balance their income across sites to keep people employed. This is also a sociological point that there is a culture in the area of not patronizing large corporations when possible, so with a big reduction in income many small businesses have no other source of income. Also, there are many local stores that serve isolated market segments (I can think of one in Pearl that sells $1-3k bikes)...their clients were a small number to start with, any reduction is devastating.

There is also other socilogical trends that impact it as an unintended consequence. As a youth magnet many people come to Portland to "Do what they love, not about money". While this is not bad in itself, often many do not educate themselves about money (like saving or investing) and many live a Bohemian lifestyle (where closer to poverty = more genuine). When people live that close to the edge and the economy goes splat, it's not far to get pushed over. Also there are the trustifarians that get money from parents, which have seen their support get wiped out and have to do something else. Those new transplants from other areas might affect the numbers if they can't find a job, certainly for open positions, but if you move to a new area and become unemployed you must file against a duel claim in Oregon and your old state in the first year.

Homelessness is not a major factor, it might even increase positions as there are many places that serve the indigent. Those however are paid for by donations, which have dried up more quickly then most other spending and jobs more vulnerable to downturns, leading to many of the workers being on unemployment themselves. The social support structure might also be an issue, it is very generous so many more people may take advantage of it here.

Just what I think, but I haven't had my coffee yet.

[Brandon26pdx]

Higher unemployment/underemployment seems to be a systemic trait. The political climate has much to do with it...very liberal and very pro-welfare which means higher taxes on businesses, which does not entice them to come here as strongly as say, Washington, which has no state corporate income tax last I checked.

Then you have the lifestyle factors. People seem to have no problem moving here for reasons other than good job prospects, and because it's "cool". (Knowing full well that even qualified and experienced workers often get stuck taking $10-12/hr jobs after they've finally given up on finding a "real" position somewhere.) Moreover, lots of people are career servers, baristas or other related service industry workers around here and are completely fine with this.

[Pfhtex]

Originally Posted by PNW-type-gal

Yeah, I think you're pretty much wrong. The Portland unemployment rate - since this is the Portland forum - was around 5.6% in 2007, compared to the current roughly 12%. The homeless situation has gotten worse because of the bad economy, but it's more a result than a push.

The Wall Street Journal thinks that one of the factors is that Portland is a "youth magnet" city, attracting the young and unemployed:

'Youth Magnet' Cities Hit Midlife Crisis - WSJ.com

I think it's a combination of things - the longer-term impacts of logging and manufacturing shut downs on the middle class, the on-going shrinking of the high tech companies and the loss of the construction/construction-related jobs that had boomed in the last 5-10 years.

You state that the Portland unemployment rate was 5.6% in 2007. Nationally it was 4.61% (The United States Unemployment Rate By Year (http://www.miseryindex.us/urbyyear.asp - broken link)) ; this supports my statement regarding the area having a higher than average baseline unemployment rate.

You then re-state my theory regarding industrial slowdown.

My "connected to the homeless situation" statement is, in fact, directly related to the "youth magnet" theory which you support. (I should have developed this point at the time, but it was three in the morning, and I wanted to bump the thread.)

So where am I "pretty much wrong"??

P.S.: OP mentions Oregon, not Portland.

[Brandon26pdx]

I'm getting pretty tired of that Wall Street Journal article already. "Look how pathetic Portland is, but Hipsters love it!!" Gag me.

[Minervah]

My sister's friend lives in New York and is a successful author. Yet when she talks about me living in Portland she gets all starry-eyed and tells me (usually via e-mail) what a wonderful, magical place this is. We somehow have the reputation of being all that and a bag of chips. Yet knowing her as well as I do I know if she came here the bubble would burst.
Not that Portland is a bad place but the expectations are unreal. I guess many people in New York think of Portland as the opposite of everything they don't like about their city. Yet I know more New Yorkers who move here and then move back there after a year or so.