Salem: Economy

Major Industries and Commercial Activity

The major industry in Salem, as the state's capital and county seat of Marion County, is government, where state, local, and federal governments employ 28 percent of Salem's workers. Trade, transportation and utilities comprise 16 percent; education and health services make up 13 percent; and professional and business services make up a further 10 percent of jobs in the metropolitan area (in 2003).

Agriculture and livestock, which is highly diversified in the Salem area, was valued in 2002 at more than $556 million in Marion and Polk counties. Vegetables and fruits, nursery and greenhouse crops, grass seed, and dairy products led with more than 50 percent of the total agricultural value. During the peak of food processing time in August and September, some 10,000 workers are employed in the industry. Contributing to this growth is the Willamette Valley wine industry, which is gaining a strong national reputation for its wine varieties.

Manufacturing in the Salem area has become increasingly diverse. Major manufacturing employers include the traditional food processors, fabricated metal products, high-tech equipment such as cell phones, snow boards, and area newspapers. Most employment classified as lumber and wood products is actually in the manufactured building industry making pre-fabricated structures.

Items and goods produced: high-tech components, vegetable and fruit products, wood and paper products, grass seed, ornamental plants, dairy products, manufactured homes, and metal products

Incentive Programs—New and Existing Companies

In recent years the emphasis in the Willamette Valley has switched from business recruitment to business retention and expansion programs designed to help resident companies "stay put and stay healthy." Most incentive programs are state loan, worker-training, and tax credit packages provided by the Oregon Economic Development Department and arranged through the Mid-Willamette Valley Council of Governments or the Salem Economic Development Corp. (SEDCOR). The Salem area has three enterprise zones for qualified manufacturing and wholesale distribution firms that allow a three- to five-year property tax exemption on improvements.

Job training programs

The state of Oregon has approved an education program, the first in the nation, that establishes a statewide apprenticeship program and has students choose between job training or a college preparatory program after the tenth grade. The program is to be installed in stages in schools through the year 2010. The state's JOBS Plus program allows employers who hire a JOBS Plus-eligible worker to receive benefits that include reimbursements, the opportunity to train and evaluate the worker during the contract period, and the opportunity to treat the employee as a temporary employee. Chemeketa Community College's Training & Economic Development Center in downtown Salem has a variety of programs to help small businesses develop and to assist existing businesses to expand. SEDCOR has partnered with Chemeketa and the Oregon Manufacturers Extension Partnership (OMEP) to run the Oregon Gateway Project to train business and workers in state-of-the-art manufacturing processes at the Advanced Manufacturing and Technology Institute (AMTI) at the college.

Development Projects

In 2001 Courthouse Square Transit Mall was completed. It consists of a bus transfer area, office and retail space, and a parking garage. In 2005 the new Salem Conference Center and attached Phoenix Grand Hotel opened in the heart of downtown Salem, just a few blocks from the state capitol building. The Meridian, a 130,000 square foot mixed-use development of luxury condominiums and medical offices will begin construction in 2005 near Salem Hospital. The largest development project to be started in the mid-2000s is the development of the Mill Creek area labeled as "Salem Regional Employment Center." This 646 acre parcel will be developed as an industrial area with business and industry parks, with 100 acres set aside as open space and wildlife habitat.

Economic Development Information: SEDCOR, 350 Commercial St. N.E., Salem, OR 97301; telephone (503)588-6225; fax (503)588-6240; email Salem Area Chamber of Commerce, 1110 Commerical Street NE, Salem, OR 97301; telephone (503)581-1466; fax (503)581-0972; email Employment percentages from the Oregon Employment Department at

Commercial Shipping

Salem is located on the main lines of the Union Pacific and Burlington Northern Santa Fe railroads. Located in Salem are 28 long haul truck lines with seven terminals. Interstate 5, the primary north-south highway of the West Coast, passes through the east side of Salem, and Interstate 84 connects to states in the east. Nearby Portland has marine terminals and deep water ports, ranking third on the West Coast in cargo shipped. The Salem Municipal Airport at McNary Field is a 750-acre facility with a 5,800-foot ILS, precision runway that has full facilities for corporate and general aviation aircraft.

Labor Force and Employment Outlook

The Salem area labor force is diversified, with skilled and semi-skilled components including metal workers, assemblers, electrical/electronic technicians, machine operators, computer operators, and programmers.

The Salem area economy in the mid-2000s is very healthy. Employment is expected to continue to grow, although at a slightly slower pace than that of the 1990s. The high percentage of government workers has shown to have a stabilizing effect on the area's economy. There are projections that population growth will slow, but as baby boomers retire, more job openings will become available.

The following is a summary of data regarding the Salem metropolitan area labor force, 2004 annual averages.

Size of non-agricultural labor force: 141,300

Number of workers employed in . . .

natural resources and mining: 1,400

construction: 7,200

manufacturing: 14,600

trade, transportation and utilities: 23,500

information: 1,600

financial activities: 7,100

professional and business services: 12,200

educational and health services: 18,300

leisure and hospitality: 12,100

other services: 5,100

government: 38,300

Average hourly earnings of production workers employed in manufacturing: $13.90

Unemployment rate: 7.7% (February 2005)

Salem: Economy

Largest private employers Number of employees
Salem Hospital 3,300
Spirit Mountain Hotel/Casino 1,500
T-Mobile 1,000
Norpac Foods (food processing) 700
Fred Meyer 700
Kaiser Permanente 700
Willamette University 650
SUMCO Oregon 600
Roth's 500
State Farm Insurance 474

Cost of Living

The following is a summary of data regarding several key cost of living factors for the Salem area.

2004 ACCRA Average House Price: Not reported

2004 ACCRA Cost of Living Index: Not reported

State income tax rate: Ranges from 5.0% to 9.0%

State sales tax rate: None

Local income tax rate: None

Local sales tax rate: None

Property tax rate: $19.32 per $1,000 assessed valuation

Economic Information: SEDCOR, 745 Commercial St. N.E., Salem, OR 97301; telephone (503)588-6225; fax (503)588-6240. Oregon Employment Department, 875 Union Street, Salem, OR 97311; telephone (800)237-3710