As Intel adapts, so must the state
Intel's announcement that over the next year it would reduce its workforce worldwide by 10 percent will come at a significant cost to the Westside and the state as a whole - considering that the high tech giant is Oregon'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.
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 Westside base of operations and its own employees. While a majority of Intel employees do live in Washington County, Intel and its employees contribute an estimated $90 million annually in taxes to local and state governments and almost $52 million to education that, because of Oregon's reliance on income taxes, helps 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.
Statistics such as these don't tell the full story. Each employee that will be let go by Intel 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 firm 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 determine on its own how to weather these cutbacks just fine.
Oregon will have to learn to adapt, too.
However, this should not mean that the region or the state 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.
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 workforce for all employers, including Intel. In doing so, we must remember that Oregon is not just competing against other U.S. states in this regard, but the motivated, intelligent and highly trained residents of many foreign countries.
The state also must work to ensure that employers such as Intel and others have readily available and suitable land to expand on and relocate to. Oregon's land use system must better accommodate the new age 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 nearby to where people work. Transportation and infrastructure services, such as electric service, need to be near at hand, efficient 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 waiver in the face of Intel's announced layoffs. The commitment should be increased. And by doing so, the region and the state will become a better place to live, work and do business for all Oregonians.