Intels ax: Could it end up as a teaching tool?
Intel Corp.'s announcement last week that over the next year it would reduce its work force worldwide by 10 percent will come at a significant cost to Oregon - considering that the high-tech giant is the state's largest employer and leading manufacturing and research firm.
Sadly, the cutbacks could affect as many as 1,700 of Intel's more than 17,000 Oregon employees if 10 percent of the work force is cut here.
And if economists are correct in their estimate that the average high-tech employee in Oregon earns $70,000 per year, Intel's layoffs will cost local residents and the state economy almost $29 million a year in payroll by mid-2007.
The ripple effect of this reduction will extend well beyond Intel's Oregon base of operations in Hillsboro and its own employees. Intel and its employees contribute an estimated $90 million annually in taxes to local and state governments.
Nearly $52 million of it goes to education, because state income taxes fund schools not just in the Portland area but throughout the state. Intel also buys goods and services from as many as 2,500 Oregon firms.
Adjustments must be made
Statistics don't tell the full story.
Each Intel employee who is in danger of being laid off is a real person. Many have families. And many - at least initially - will have to make do without a job. These are Oregonians, all.
As Steve Grant, vice president of Intel's technology and manufacturing group told the Oregon Business Council Leadership Summit almost two years ago, 'We are not just a faceless employer. We are 15,000 citizens of Oregon ready to roll up our sleeves and work alongside you to make Oregon all it can be.'
Intel's restructuring is designed to make the company itself all that it can be - by making it more nimble in the face of expanded competition and by reducing expenses and capturing increased profitability. We think that as a company, Intel will weather the cutbacks just fine.
Oregon will have to learn to adapt, too.
However, this should not mean that the region or the state should abandon efforts to strategically invest in programs and services that support Intel and other high-tech research, development and manufacturing firms. These are firms that employ more than 60,000 workers in the metro area. In fact, we should do quite the opposite.
State must invest in economy
Oregon must accelerate its investments and commitment to improve the quality of public education at all levels. Particular emphasis needs to be placed on providing a far more highly educated and better skilled work force for all employers, including Intel.
The state also must ensure that employers such as Intel and others have readily available land on which to expand and relocate. Oregon's land-use system must better accommodate the new economy while preserving key Oregon attributes, such as quality of life and open spaces.
Housing choices for employers' workers need to be more diverse and located near where people work. Transportation and infrastructure such as electricity service need to be near at hand and cost-effective. And taxes need to be fairly applied and spent wisely and productively.
The state and region's commitment to these things should not waver in the face of Intel's announced layoffs. The commitment should be increased. By doing so, the region and the state become a better place to live, work and do business.