Most of Oregon's economic and social problems - including state government's gaping budget deficit - can be traced back to one undeniable fact: This state has failed to create enough jobs, and its residents earn far less on average than other workers across the nation.
With unprecedented attention on the economy, it simply is not enough to talk about creating jobs. Oregon's leaders must immediately act to attract those jobs that pay well and that are capable of lifting the state's overall economy.
A recent study for the Portland Business Alliance puts this job deficiency in clear focus, demonstrating just how far the Portland area, in particular, has fallen.
The study by ECONorthwest defines the issue by showing that the Portland metro area has a per capita income that is only about 80 percent of comparable cities, such as Seattle, Denver and Minneapolis. As newly inaugurated Gov. John Kitzhaber told Oregon business and community leaders in December, Oregon as a whole is also well below the national average for per capita income.
Causes of budget woes
These dramatic differences don't just mean that families in this state have to get along with less money. Lower wages produce lower income taxes, which means the pay deficit is a primary reason that essential public services are underfunded in Oregon.
It's a vicious cycle, because funding shortfalls also limit state and local governments' ability to invest in priorities - including education, transportation and land supply - that will encourage more jobs in the future.
The PBA-sponsored study even puts a specific number on the public cost of a low per capita income. For example, if the 2008 per capita personal income in the Portland area had equaled that of Seattle metro, there would have been an additional $23.4 billion of income generated in this region. That would have produced about $1.3 billion in state revenue, reducing by 37 percent the nearly unsolvable budget deficit that Oregon now faces.
Too often in this state, we debate whether state government is spending too much, or whether the problem is a shortage of tax revenue. Budget gaps have to be closed in times like these, but in truth, our most immediate concern should be to address low wages that leave citizens and government alike with scant resources.
Immediate action is required
Many factors contribute to Oregon's lower wages, but there are short-term actions that must be taken to begin to reverse this dangerous trend. For one, the state, Multnomah County and local cities should place greater emphasis and urgency on providing a sufficient and on-going supply of industrial lands for high-paying jobs.
In the metro area, Washington County and its cities have been leaders in making land and infrastructure ready for good jobs. Multnomah County, however, hasn't paid the necessary attention to this matter in recent years. The county and the cities of Portland and Gresham - as well as the smaller cities in the county - must identify what infrastructure is needed to make sufficient lands more immediately ready for industrial use. They then should partner with the state to find funding to pay for that infrastructure, including roads, water and sewer.
Such partnership is necessary, because tax limitation laws have left local governments with inadequate resources - and few incentives - to pay for that infrastructure on their own. Over time, these players also must implement a strategy to reclaim old industrial sites that have been left idle for years due to environmental cleanup requirements.
To compete for jobs, Oregon needs to improve other services as well, such as higher education. But those improvements are longer-term strategies. For now, let's start with something immediate and doable by making land ready for more of the quality, high-paying jobs needed by Oregonians, our communities and the state.