The Oregon Biz Report - Business News from Oregon

Unemployment 9.4%. 26 year high.

From Real Clear Markets (AP) Jeannine Aversa – “Employers cut a larger-than-expected 467,000 jobs in June and the unemployment rate climbed to a 26-year high of 9.5 percent. Workers also saw weekly wages fall, suggesting Americans will have little appetite to spend and the economy’s road to recovery will be bumpy…However, the rise in the unemployment rate from 9.4 percent in May wasn’t as sharp as the expected 9.6 percent. Still, many economists predict the jobless rate will hit 10 percent this year, and keep rising into next year, before falling back.All told, 14.7 million people were unemployed in June.”

Rural Health Care Woes: Prinenville drops Obstetric service.

As the nation debates health care reform, real life examples of what rural communities face are evident and reoccurring.   Kevin Gaboury wrote in the Central Oregonian that the Oregon town of Prineville is losing their Obstetric services.

“By the end of the year, babies will no longer be born at Prineville’s Pioneer Memorial Hospital. The hospital made the difficult decision to phase out obstetric services by 2010 this week due to a sharp decrease in the number of primary care physicians available to provide the service, PMH Executive Director Don Wee said. He emphasized that the hospital’s decision to pull the service is not financial in nature.”We’re losing the physicians that do OB and thus far, we’ve been unsuccessful in replacing those that are leaving,” he said. “You can’t do it with one or two.” Continue reading.

Savings Will Soon Drive Increased Spending

By Bill Conerly, Oregon Economist
Businomics, Conerly Consulting LLC

I’ve been saying that consumer spending would soon increase.  It has not happened yet, but consumers are now in position to get going.  The key concept is that consumers have not been income constrained, as a group.  In the aggregate, they are simply scared.  They have the income to spend more, but they choose not to.  Here’s the month-by-month changes in disposable income and spending since last September (when the economy really started to tank):

Will Cash-for-Clunkers Reduce Carbon Emissions?

By Patrick Emerson
Oregon Economics Blog

In my search for the perfect car to replace my current one, I have stated that I am in no hurry: mine is pretty fuel efficient, relatively low-mileage and has been a great car to own and drive. Above is a picture of the Tesla S, an all-electric car that should be available when mine is ready for replacement and can go up to 300 miles on a single charge. Now we are talking my language!  Anyway, the idea that I would hasten to trade-in my current car raises some interesting general equilibrium issues as I have mentioned: what does this do to the used car market, the volume of new car production, etc.

Senator Merkley Introduces Bill to Boost Small Businesses

US Senator Jeff Merkley Press Release,

Lake Oswego, OR – Oregon’s Senator Jeff Merkley announced today at a meeting of Clackamas County Chambers of Commerce that he will introduce the Small Business Jump Start Act to encourage job creation and support small business owners by cutting taxes for the start-up costs of small businesses.  Merkley’s Small Business Jump Start Act is cosponsored by Senator Lamar Alexander (R-Tenn.) and endorsed by the U.S. Chamber of Commerce, the National Federation of Independent Businesses (NFIB), and the National Association for the Self-Employed.

$50 Million Unemployment Fund Raid Gets Derailed

By J.L. Wilson - 6/26/09
Associated Oregon Industries
Oregon’s largest business lobby

The legislature earlier this week abandoned Governor Ted Kulongoski’s proposal to siphon $50 million from the state’s Unemployment Trust Fund to fund a temporary summer jobs program. As late as last week, it appeared that AOI was facing long odds in defeating the proposal, which was embedded in House Bill 3500. AOI was told last week that a deal had been struck that paved the way for the legislature to pass HB 3500, which included both a $30 million emergency unemployment benefits extension as well as the $50 million raid on the state’s Unemployment fund.

Oregon Index: Signs of stability

Timothy Duy
Director, Oregon Economic Forum

The UO Index fell slightly in May, down 0.1 percentage points.  The relative stability over the past three months, however, is a welcome relief after many months of steady decline and is consistent with a recent pattern of economic stabilization, both state and nationwide.  Highlights include:

•    Initial jobless claims edged downward, but remain at high levels.  Ongoing high levels of initial claims would be consistent with the “jobless recovery” scenario, in which economic growth is insufficient to generate net positive job growth.
•    Residential housing permits continue to decline, more evidence that the housing recovery – or even stabilization – remains elusive.  High unemployment and tighter credit continue to weigh on the sector.
•    New orders for core manufactured goods jumped, an indication that firms are no longer cutting investment spending.  If this trend is sustained, it would feed through to stabilizing and eventually stronger manufacturing activity in Oregon in the months ahead.
•    The pace of economic deterioration has slowed markedly, and while the Oregon economy likely remains in recession in May, the improvement in the 6 month annualized change in the UO Index is consistent with the recession (period of negative growth) ending in the second half of 2009.  Without a clear upward turn in the UO Index itself, it would be premature, however, to decisively declare that the recession has ended.

Home Prices and Consumer Spending

By Bill Conerly, Conerly Consulting LLC, Businomics

Some friends have been debating the role of housing prices in consumer spending, stimulated by two recent articles in the Wall Street Journal’s Real Time Economics blog.  First, Charles Calomiris, Stanley Longhofer and William Miles wrote that effect of housing wealth on consumption is about zero.  Then, Atif Mian and Amir Sufi of the University of Chicago offered a differing view.

I am very cautious before throwing out conclusions that have been tested in multiple ways over many years.  The wealth effect on consumption has been studied since the 1930s, with fairly consistent findings of low elasticity (one to three percent is common). 

Two Industries Capture Bulk of Teen Workers

by Brooke Jackson-Winegardner
Oregon Employment Department

Teens looking for work face tough prospects during this summer’s hiring season. Not only are there fewer jobs available because of the current recession, but there is also a host of skilled, experienced older workers flocking to fill any job opening that comes up, thereby wedging out many prospective young workers. Nevertheless, many Oregon teens will still venture into the employment world this summer in hopes of earning a little extra pocket money, saving for college, or perhaps just to keep busy.

Oregon State Chamber to Distribute Free Drug Cards

Chambers to Help Oregon Rx Card Provide Prescription Assistance to All Residents
By Oregon State Chamber of Commerce

The Oregon State Chamber of Commerce (OSCC) announced a new partnership with the Oregon Rx Card today. The goal of the joint venture is to provide all Oregon residents with prescription assistance. OSCC will encourage local chambers of commerce, across the State, to distribute free discount prescription drug cards to residents. All Oregon residents are eligible for this program.

Oregon Businesses Opposes Effort to Confuse Voter Referendums

Oregon voters, like legislators, should have the right to simply vote “yes” or “no”
By Alliance of Oregon’s Business Associations,

Each member of the Alliance supports Oregon’s Initiative and Referendum Process. While each of our organizations has won and lost our fair share of elections, we are steadfast in our belief that the check and balance provided through our initiative and referendum process should not be confused through legislative action.

Spending +.3%, Savings rate highest in 15 years.

Wall Street Journal reported today, “The income of Americans soared in May because of the government’s economic stimulus, leading them to increase spending modestly and boost the saving rate to the highest in 15 years. Personal income rose at a seasonally adjusted rate of 1.4% compared to the month before, the Commerce Department said Friday. The jump reflected reduced taxes and increased social benefit payments unleashed by the stimulus package. Consumer spending, or personal consumption, rose 0.3% compared to the month before.”

Laptops outsell PC for first time. PC sales -7%

PC sales growth down, laptops rise
By Oregon Small Business Association,

PC sales growth in the U.S. continues to take a beating at the hands of the economic recession.  Yet, one glimmer of hope remains:  laptop computers.  Dell Computer recently announced declining quarterly profit and revenue results.  Hewlett-Packard also announced similar weak results.  And Intel’s four-quarter long growth streak has ended with the world’s largest chipmaker seeing a decline in both sales and market share. Shipments of PCs during the first quarter were down 7.1 percent from a year ago, according to the research firm IDC.  And it may not be totally behind us: IDC is predicting roughly 8 percent declines in growth for the second quarter.

Top 10 vehicle brands ranked by quality

Discrimination Claims on the Rise

By Mimi Henninger, SPHR,
Senior Human Resources Consultant
AmeriBen/IEC Group Exlporer,

According to recent statistics released by the Equal Employment Opportunity Commission (EEOC), overall discrimination claims rose 15% in 2008 from 2007. One reason for an increase in discrimination claims is that more people are being laid off from their jobs. A certain percentage of affected employees will file discrimination claims.

Interestingly, age discrimination claims rose at a much higher rate (29%) over the same period. Employers may unintentionally be targeting older workers for several reasons. There may be a desire to layoff the more highly-compensated employees in order to cut costs. This can have a greater impact on older workers. Older workers also have a harder time finding a new job. This gives them more time to dwell on the situation and focus on filing a discrimination claim rather than moving on to a new job and a new employer.

Portland Business Alliance statement on Sam Adams

Portland Business Alliance Board of Directors’ Statement on Attorney General Report on Mayor Sam Adams and the important of moving on.
By Portland Business Alliance,

Portland, Ore. – Today, the Portland Business Alliance’s Board of Directors released the following statement about the Oregon State Attorney General’s report on its investigation of Portland Mayor Sam Adams. “Attorney General John Kroger today issued a report concluding there is no basis to file criminal charges against Mayor Adams as a result of his relationship with Beau Breedlove,” said Sandra McDonough, President and CEO of the Portland Business Alliance. ”With encouragement from Portland City Council members, Chief Rosie Sizer and District Attorney Michael Schrunk asked Attorney General Kroger to conduct an independent review of the facts around the Adams situation.

House makes Employer Gag Bill much worse

By J.L. Wilson
Association of Oregon Industries
Oregon’s largest business advocate

Senate Bill 519 will pass House today, new bill introduced to expand scope of “Gag Bill”.   The Oregon House of Representative is poised to pass SB 519 – “the Employer Gag Bill” – under direction from House Democratic leadership to pass the bill in its exact form without any business input.  Passage of SB 519  by the House, plus a signature from Governor Kulongoski, will mean the “Employer Gag Bill” will go into effect on January 1, 2010.  But in an unprecedented twist, new legislation was introduced this week to change SB 519 before it even passed the legislature.  House Bill 3507 was introduced this week to “fix” SB 519 before SB 519 has even been passed.

World Bank predicts -2.9% growth. Worsens forecasts.

Oregon is losing ground in key economic areas

Oregon Business Data Analysis:

Oregonians are losing ground to the average American based on 2008 per capita statistics recently reported by the Oregon Employment Department.

•   Oregon’s per capita personal income fell 1.5 percent in 2008. From $36,492 in 2009 to $35,956. (inflation adjusted).
•    Oregon’s per capita personal income went from 28th to 32nd. (From 2003-2008).
•    Oregon’s growth over the period (3.8%) ranked 43rd.
•    Oregon’s per capita personal income as a percentage of the national figure reached an all-time low in 2008. Oregonians were earning 90.5 percent of the national average, compared to 93.9 percent in 2003