December 1, 2016
The Retail Economy
Inside this Issue
Brookings on the Rebound Obamacare Could Have Saved the Economy Historic Jacksonville Shopping Local
A few words from Greg
On November 8, 2016 American voters went to the polls. The result of the presidential election left half the voters satisfied with the outcome. The other half in shocked surprise and sometimes in tears. This election is historical in many ways often negative and disappointing. Neither candidate was popular even with his or her own constituency. That will cause head-scratching for a very long time. If votes were cast with the idea of selecting the least unfavorable candidate, assessment of analysts will not likely be dependable in future political conversations. Some pollsters believe the inaccuracy of the polls in this election was a result of voterâ€™s unwillingness to share which candidate would be receiving a vote, perhaps because they didnâ€™t know. The greatest lesson learned may be in the selection process of the candidates. Both were of a generation that could be accused of being out-of-touch with at least half their constituency and not as familiar with them and their life ambitions as someone twenty years younger might have been. Involvement in the candidate selection process should be glaringly obvious to anyone not fully satisfied with the choices made this year. That is just about everyone. Voters not only have an opportunity to select their leaders, but also a responsibility to nominate candidates who deserve the honor. America decided on a president. America in its entirety must now ensure the needs of the nation are met by better communicating the joys and disappointments they feel while offering constructive ideas to implement vital programs that will leave the next generations with a nation and a planet in good standing.
Greg Henderson Greg Henderson, Publisher email@example.com
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A JOURNAL FOR THE ECONOMICALLY CURIOUS, PROFESSIONALLY INSPIRED AND ACUTELY MOTIVATED
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ASSISTING THE ECONOMIES OF THE SIX COUNTIES OF SOUTHWEST OREGON
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Table of Contents PUBLISHERS NOTE
2 A Few Words From Greg
18 Brookings on the Rebound
34 Moving at the Speed of Life
32 Jacksonville ECONOMICS 4 Employing Oregonians
6 Policy or Partisanship
23 Oregon’s new Paystub Law
14 Josephine Recession
24 20% of Retail during Christmas Season
16 Labor Productivity
26 Carriage Works RETAIL 9 10 Reasons to Shop Local 10 Strong Towns— Community Allies
28 How Obamacare could have saved the economy 30 Chambers & Cities Summit
12 New Ways to Think
Cover Photo : ’Tis the Season
Southern Oregon Business Journal
Industries Employing Oregonians: It Varies by Worker Age by Annette Shelton-Tiderman There's been a lot of conversation in recent years about impacts of the Great Recession on youth employment and the seeming reluctance of Baby Boomers to leave the workforce. Some common questions include: "What are Oregon's largest industry sectors and how employment within these sectors has changed after the recession? Where are youth in Oregon finding jobs and where are they employed as they gain more work experience?" Although the official beginning of the Great Recession was December 2007 and the end was June 2009, Oregon's peak and trough were as unique as the state. Oregon's peak, or pre-recession high, was first quarter 2008 (February); the low point of the state's employment was first quarter 2010 (January). To coincide with these economic shifts, data examined in this article are from first quarters of 2008, 2010, and 2015. Oregon's Largest Industry Sectors Have Remained Much the Same The five largest employing industry sectors in the state were the same in first quarter 2015 as they were prior to and during the Great Recession. They are health care and social assistance; retail trade; manufacturing; accommodation and food services; and educational services. The percentage of workers in health care and social assistance has slightly changed over the decade: 12.3% in 2008, 14.2% in 2010, and 14.6% in 2015. The other four industries have seen only minor fluctuations in percentage of overall employment during this period. This is particularly interesting given that overall employment across Oregon's industries dropped nearly 9 percent from peak to though and has gained 11 percent from the bottom in early 2010 to 2015. Jobs fluctuated â€“ both in numbers and by the age of workers, but it appears that the industry mix held steady. At Oregon's peak employment, there were nearly 1.7 million workers across the state. The younger workers, ages 14 to 24, made up 12.6 percent of the total workforce. By early 2010, that representation had dropped to 10.7 percent, and recovery does not appear to have impacted this group (10.9% of the 2015 workforce). Workers with some experience and likely some training, ages 25 to 44, have seen little change in their presence in the state's workforce. Workers with more experience maintained their workplace presence between the peak employment and the bottom in 2010, going from 39 percent of the workforce to 40.5 percent. This has dropped back to 39 percent during recovery. The most notable change in workforce attendance has been in the workers age 65 and over. This small group represented Southern Oregon Business Journal
nearly 4 percent of the workforce in 2008, grew to 4.4 percent in 2010, and has continued to gain ground during the recovery (5.8% in 2015). Although the most senior cohort represents a small percentage of the workforce, they number nearly 100,000 â€“ more than the 14 to 21 year olds and more than the 22 to 24 year olds.
Industry Employment Varies by Age Group As might be expected, industry-specific workforce characteristics vary. Industries requiring experience, particular job skills, as well as higher levels of education tend to have older workers than those industries needing less-skilled employees. Oregon's five largest industries provide employment for just over half the workforce. However, 67 percent of younger workers ages 14-24 find employment in these sectors, particularly accommodation and food services (23.4% of these workers) and retail trade (22.4%). The predominance of younger workers in these two industry sectors shifts as workers gain experience and job skills. Workers ages 25 to 44 have less representation in accommodation and food services, and retail trade. They are more concentrated in health care and social assistance, and manufacturing. Older workers also see increased presence in educational services. As workers gain more experience and advance in their careers, their positions will offer employment opportunities for others. Basic job skills such as communication (both written and verbal), customer service, fundamental computer skills, as well as time management, team work, and other transferable abilities will enable workers to transition from entry-level jobs to those requiring additional skills.
Annette Shelton-Tiderman Regional Economist Coos, Curry, and Douglas counties firstname.lastname@example.org 2075 Sheridan Avenue North Bend, OR 97459
Southern Oregon Business Journal
Policy or Partisanship? Opinion:
November 8th was a rare binary event for investment markets: a polarizing presidential election with one of two outcomes; one of two directions. Going into the election most major markets had priced in a Clinton victory. As the election grew closer and Clinton’s lead in the polls dwindled the major US stock market indexes began to decline. Were the markets forecasting a Trump victory? Unlikely. After watching how the markets responded to the surprise Brexit vote last June, Wall Street was more likely trying to avoid making the same mistake twice. While Clinton was expected to win, prudence demanded more reserved pricing in the face of rising uncertainty.
During election night, as exit polls and electoral votes began to show Trump taking the lead, the overnight futures markets fell violently. In fact, they fell so violently that trading curbs -- electronic circuit-breakers designed to prevent market free-falls from occurring -- kicked in. Both the Dow 30 and S&P 500 futures contracts fell by close to 5%. Would this be the next Brexit surprise? Would the second longest bull market in history be over? Remarkably, the answer was no. To the surprise of most Wall Street analysts, stock markets reversed course just hours after trading curbs kicked in. By Wednesday morning’s open markets were positive. Some two weeks after the election, as of market close on November 25, 2016, the Dow Jones Industrial Average, S&P500, and NASDAQ indexes were at all-time highs. The day after the election the investor narrative began to shift. Voters handed Republicans the keys to the store. Now what? Lower taxes, lower health insurance premiums, infrastructure improvements and more jobs for everyone!... If only it were that simple. While economic theory is just that -- theory -- the mechanics of the economy require trade-offs. In order to growth the economy the right conditions need to exist. The Trump plan appears to be a combination of several economic theories, including neoclassic, Keynesian, and Laffer theories. The neoclassic economic theory is the idea that supply and demand determine price. Keynesian theory suggests the government can intervene to make this process more efficient. And the Laffer theory suggests the whole process can be tax-optimized. In essence, it appears Trump’s economic plan is to provide a massive cocktail of stimulus elements designed to grow the economy significantly. The question that remains unanswered is how to pay for it all. Trump has already indicated he intends to renegotiate several international trade deals. In particular, there is discussion about creating tariffs on certain imports from countries that have unfair trade or labor practices. This could change both the balance of trade and the input cost of labor for businesses. Higher import costs may drive jobs back to the US if it’s no longer profitable to shift labor to other markets. Trump has also indicated he intends to reduce both personal and corporate tax rates. This is a Laffer concept—that lower tax rates are stimulative in nature because it leaves more money in the hands of consumers to deploy in the economy - and that lower rates will result in more overall tax being collected as a result of economic growth. It is, in effect, optimizing the tax rate for maximum efficiency. Additionally, Trump wants to create a large government infrastructure project, where the government repairs major roadways, bridges, airports, and the like. Much like tax cuts, this is intended to create jobs that will lead to economic growth. The government takes on debt in the process, but the idea is to grow the economy to pay for the debt. And the infrastructure should last for several decades so it is not money that must be spent again any time soon. The question remains though: how does this package get paid for? Tax breaks are fairly straight-forward; however, they come with a loss of revenue. Then there is the infrastructure spend. This is bound to come at a cost as well. If the economy were to grow, perhaps the additional taxes would make up some of the difference. But there is bound to be a lag here between the spending and the growth.
Southern Oregon Business Journal
Policy or Partisanship? (Cont.)
It’s difficult to determine whether or not Trump’s economic plan will succeed. In classic Keynesian economic theory, governments are supposed to bank surpluses in times of plenty to pay for the stimulus projects during times of want. In reality, the US has amassed nearly $20 trillion in debt while continuing to spend more than it brings in. The Trump plan may come at an additional cost: inflation. The Federal Reserve, through monetary policy, has been trying (with little success) to stimulate moderate inflation since the market collapse of 2008. This has resulted in extremely low interest rates for nearly a decade. In just the first few weeks since Trump was elected the long-term interest rates have started to climb. This is presumably because markets are expecting inflation to return. The many projects proposed by Trump may, in fact, be stimulative. But the debt required to fund them is also inflationary in nature. With inflation comes higher borrowing costs. So as rates go up, investors may expect to get higher interest rates on fixed income investments, but borrowers can also expect to pay more. For stock markets, inflation may prove to be a good thing. Since markets price stocks based on their future value, one would expect their prices to go up if profits were to go up as well. There is a problem with rising rates though. Not only does it make it more expensive for consumers to borrow money, it makes it more expensive for governments to borrow as well. So the cost of debt service goes up. The US debt is currently roughly $19.5 billion dollars. The US economy, or Gross Domestic Product (GDP) for 2016, is estimated to come in at just over $18 billion dollars. Our debt has now exceeded our GDP. The last time this happened was during World War II. The difference, of course, is that after WWII, the rest of the globe had to rebuild their economic infrastructure while the US survived with relatively little direct impact on our own soil. Today’s circumstances look broadly different.
Given the global economic backdrop, it is difficult to predict where things are headed. There are several factors to consider though: Macroeconomic forces tend to react relatively slowly… at least initially Interest rates are still at historically low levels Washington is still relatively dysfunctional and unlikely to move quickly Trump appears to be moderating from some of his more aggressive campaign trail positions Overall economic trends in the US are, overall, headed in a positive direction At this point, foreign trade deals are merely discussion items. Nothing has changed yet. Despite fears of inflation, the US dollar, relative to other currencies, continues to climb. (This may be a trading headwind in the future, but it also moderates inflation and helps US consumers) While all good things must come to an end, the majority of economic data does not suggest the stock market is preparing for a crash. Nor does it suggest mortgage rates are headed back toward double-digits. In fact, there are many indicators the S&P500 may be preparing for a classic Santa Claus rally headed into the end of 2016 and long-term rates are beginning to stabilize. Of course, every bull market comes to an end at some point. And the current bull market has been raging on for 2,682 days (as of the writing of this article). Are we simply due for a correction? Don’t be so sure. The previous bull market lasted 3,452 days. That’s more than two years longer than the current bull market. 2017 promises to be an interesting year. A regime change to a political outsider is sure to bring surprises. But the global economy is a large ship that turns very slowly. It can be tempting to fall prey to your emotions and make rash decisions. Investors often allow optimism or pessimism to color their judgment. When it comes to your money, this can be dangerous. Instead, try to remain rational, take the time to do your homework, and stick to the data. The markets aren't as partisan as we often like to think they are. David Littlejohn 2435 NW Kline St, Suite 200 Roseburg, OR 97471 (541) 375-0898 email@example.com Southern Oregon Business Journal
Local Knowledge Regional Leader 1495 NW Garden Valley Blvd Roseburg, OR 97470 Ph: (541) 672-6651 Fax: (541) 672-5793
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AmeriTitle began as a single office in Klamath Falls, Oregon in 1985. Today, AmeriTitle has 42 offices in 3 states: Idaho, Oregon and Washington.
Barry Robinson, General Manager firstname.lastname@example.org
Entrance to Festival of Lights Roseburg, OR
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Top Ten Reasons to Shop Local We realize it is not always possible to buy what you need locally and so merely ask you to
Think Local FIRST! 1) Buy Local - Support yourself Several studies have shown that when you buy from an independent, locally-owned business, rather than a nationally-owned business, significantly more of your money is used to make purchases from other local businesses, service providers, and farms -- continuing to strengthen the economic base of the community 2) Support Community Groups Non-profit organizations receive on average 250% more support from smaller business owners than they do from large businesses. 3) Keep our Community Unique Where we shop, where we eat and have fun -- all of it makes our community home. Our one-of-a-kind businesses are an integral part of the distinctive character of this place. Our tourism businesses also benefit. â€œWhen people go on vacation they generally seek out destinations that offer them the sense of being someplace, not just anyplace.â€? ~ Richard Moe, President, National Historic Preservation Trust 4) Reduce Environmental Impact Locally owned businesses can make more local purchases requiring less transportation, and generally set up shop in town or city centers as opposed to developing on the fringe. This generally means contributing less to sprawl, congestion, habitat loss, and pollution. 5) Create more good jobs Small local businesses are the largest employer nationally, and in our community, provide the most jobs to residents. 6) Get Better Service Local businesses often hire people with a better understanding of the products they are selling and take more time to get to know customers. 7) Invest In Community Local businesses are owned by people who live in this community, are less likely to leave, and are more invested in the communityâ€™s future. 8) Put Your Taxes To Good Use Local businesses in town centers require comparatively little infrastructure investment and make more efficient use of public services as compared to nationally- owned stores entering the community. 9) Buy What You Want, Not What Someone Wants You To Buy A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term. A multitude of small businesses, each selecting products based not on a national sales plan but on their own interests and the needs of their local customers guarantees a much broader range of product choices. 10) Encourage Local Prosperity A growing body of economic research shows that in an increasingly homogenized world, entrepreneurs and skilled workers are more likely to invest and settle in communities that preserve their one-of-a-kind businesses and distinctive character. Think local first + Buy local when you can = Being a local! Southern Oregon Business Journal
BY: BRUCE NESMITH
COMMUNITY ALLIES: THE VIRTUE OF LOCALLY-OWNED BUSINESS
As Cedar Rapids prepares to welcome two more strip malls on the edge of town, and one of our malls announces a new franchise tenant, it's instructive and inspiring to hear evidence that the most potent taxgathering areas in towns of any size are downtowns and Main Streets, and that locally-owned businesses contribute far above their weight when it comes to developing strong communities. Those messages were crisply presented by Ellen Shepard in a talk Friday at Loyola University's Center for Urban Research and Learning. Ms. Shepard is the founder and CEO of Community Allies, which works with communities to develop organizations and leadership, facilitate community engagement, and "to grow stronger from within." Prior to that she headed the chamber of commerce in Andersonville, a neighborhood on the north side of Chicago. I said in an early piece for this blog that I believed local businesses like Brewed Awakenings Coffeehouse were more valuable to the city than national chains like the Caribou Coffee a block away. But I didn't have the evidence to tell me whether that was intuition or prejudice. Shepard presented a plethora of evidence from recent studies to back up that intuition: A 2005
Southern Oregon Business Journal
Strong Towns (Cont.)
study in Andersonville by Civic Economics found of every $100 spent at locally-owned businesses, $68 stays in the area, while $32 buys supplies that must be imported from elsewhere. Of every $100 spent at a non -local business, $43 stays, $57 leaves. She used the example of Starbucks, "a pretty good chain" in terms of how they treat their employees, and one that doesn't demand subsidies or infrastructure, but the corporation uses one firm for accounting and one law firm, and one graphic artist, and those are probably not located in the town where you're patronizing Starbucks.
A study of businesses in Lane County, Oregon, found the cost to government of a job produced is many times larger for non-local than for local businesses. Old Pasadena, California (local businesses, traditional development pattern) outperforms New Pasadena (national chains, suburban development pattern) 2-1 in sales tax revenue. A relatively high ratio of firms-to-workers in a town correlates with better economic growth (Harvard Business Review, 2010) and per capita income growth (Economic Development Quarterly, 2011).
also could be mitigated by community land trusts which, if formed early enough, could buy up properties to control the rise in rents.) easing business licensing, permitting and zoning, which are nearly impossible in Chicago due to the strong effect of political influence I would add that citizens need to insist on more longterm thinking from their governments and less emphasis on instant results. (See this article by Sarah Kobos where she writes, "Our craving for “new” tax dollars combined with cheap land has resulted in a misguided 50-year habit of continuous greenfield development"), and in their capacity as consumers to consider the destructive impacts on their communities of choices based on price, habit and convenience. I'm not opposed to national policies like minimum wage laws, and I am not opposed to seeing Donald J. Trump's bilious campaign get decisively defeated, but I think this community-based approach could go much farther to develop strong, inclusive local economies that would in turn help us face other seemingly intractable 21st century issues like climate, energy, diversity and government finance.
A study by the University of Leeds found increased imports of consumer goods in Britain had created a 38 percent increase in greenhouse gas emissions during the period studied. “The solutions to many of our most entrenched problems are likely to come from the bottom up not the top down.” — Ellen Shepard Shepard spoke on the eve of the 2016 U.S. presidential election, but didn't refer to it at all; in fact, she argues, "The solutions to many of our most entrenched problems are likely to come from the bottom up not the top down." She urged people to "go to our communities, to our local elected officials, and to our landlords to champion locally-owned small businesses." In practical terms this means having:
access to capital a level playing field i.e. governments should stop favoring big corporations through subsidies, infrastructure and awarding contracts laws against monopolies enforced laws that allow cooperative ownership of real estate and community investments (While somewhat off topic, she also suggested the effects of gentrification
Southern Oregon Business Journal
The Coffee Shop near Loyola's campus. Within a block are a Starbucks and two Dunkin Donuts.
Strong Towns 1511 Northern Pacific Rd. Rm 206 Brainerd, MN 56401
Bruce Nesmith is a longtime Strong Towns member and blogger at Holy Mountain. This essay is republished from his blog with permission.
BEYOND OMNI CHANNEL:
NEW WAYS TO THINK ABOUT COMMERCE By: Susan Reda
he buzz at Retail’s Digital Summit, the 15th annual event hosted by Shop.org, was palpable. Thousands of digital retail insiders converged in Dallas last month to immerse themselves in learning, technology and networking. Vendors delivered new solutions while speakers challenged attendees to disrupt the norm and push the boundaries of retail.
The day-long Digital Marketing Workshop that kicked off the summit yielded a “top five” of best practices including a clear understanding of mobile key performance indicators, a well-defined view of the customer and a keen understanding of how to balance human and machine learning. But that was only the beginning — here are just a handful of additional takeaways from the event.
Drop the ‘e’ and capitalize the ‘c’ — it’s all about Commerce Summit attendees were on a dual mission. Striving to eliminate the word “omnichannel” from their lexicon and to break the habit of referring to e-commerce as a separate channel of business, they bantered about unified commerce, commerce anywhere and — one of the newer terms — cognitive commerce. While the retail industry may never be able to retire the omnichannel jargon, what matters far more is delivering a seamless shopping experience for consumers. HSNi CEO Mindy Grossman describes her vision as boundaryless retail. “We’ve entered the age of boundaryless retail – a world devoid of artificial barriers, driven by innovation and collaboration, where we leverage the power of technology to create a seamless experience for consumers.” Grossman says HSNi is platform-agnostic and audience-centric, refusing to cling to any particular channel. While many others aspire to a similar view, getting there requires robust inventory and order management systems that support a buy, fulfill and return-anywhere strategy. The industry has been talking about the “order management imperative” for years now, emphasizing its critical role in nurturing a loyal customer base. Too many “buy online, pick up in store” and “buy online, ship from store” horror stories surfaced in 2015. Customers won’t tolerate it this coming holiday season. Order glitches are so 2005.
Don’t under estimate social media’s might Piers Fawkes of innovation consulting firm PSFK believes the future of retail looks a lot more social. Not many folks would argue that view. The industry is immersed in a new era of engaging, relevant and vibrant commerce and the most astute players are coming up with unique social strategies to influence the shoppers they covet most. Though most still say shoppers’ appetite for social commerce pales in comparison with online or physical mediums, the ubiquity of mobile— along with research showing that consumers rely on social media when making a purchasing decision — has rendered social media indispensable.
PSFK’s Piers Fawkes (pictured) and Scott Lachut shared “10 pillars of the new digital shopping experience” at Retail’s Digital Summit.
There’s no one-size-fits-all approach to building social connections. Retailers need to choose the right channel based on their customers. Whether that’s Snapchat or Instagram, YouTube or Facebook depends on the shoppers that retailers are targeting. Getting it right will foster transparency and a sense of authenticity; getting is wrong will result in lackluster returns.
The social media landscape is undergoing a transformation. Fawkes describes it as a digital connector, capable of cultivating connections between retailers and brands and connections between brands and content resources that create meaningful partnerships. Southern Oregon Business Journal
NEW WAYS TO THINK ABOUT COMMERCE (CONT)
Virtual reality check Virtual and augmented reality promise to take the immersive customer journey to new heights, but Mitch Joel, president of global digital marketing agency Mirum, issued a reality check. Is it coming? Yes. Will we get there soon? Yes, but probably not as quickly as the hype would lead one to believe. Joel considers VR and AR to be a “complete gamechanger when it comes to how [the industry] can tell better brand stories and how [shoppers] can experience brands in a more profound way,” and he encouraged attendees to start experimenting now. Joel says VR and AR allow the shopper to move within and through the retail experience without physically being in a store. Moreover, it’s possible to deploy VR in a bricks-and-mortar setting, using the technology to change how products are merchandised, creating an “endless aisle.” In theory, the technology could also allow retailers to customize each shopper's experience. Google’s Sophie Miller (pictured) and Sephora’s Johnna Marcus showed how AR and VR are experiences, not screens.
Like most new retail technologies, deploying AR/VR for technology’s sake is not a strategy. The application can and should be used to solve a consumer’s problems; it should naturally extend the brand’s connection to the consumer. Who’s getting it right? Lowe’s, Wayfair and Sephora, to name just a few. Mobile is the starting point for digital engagement and the creation of a mobile-first culture is key.
Mobile is a mainstay If there was one pervasive theme that seemed to weave through the Digital Summit, it was this: Mobile is the starting point for digital engagement and the creation of a mobile-first culture is key. Smartphone traffic is expected to increase tenfold from 2014 to 2019 and the mobile economy already accounts for 4.2 percent of global GDP — not to mention the fact that smartphone owners look at their devices 150-200 times every day. Facebook Director of Product Marketing Maz Sharafi considers mobile to be a consumer behavior, not a technology or channel. He shared some stats: 90 percent of people access a mobile device while shopping, 74 percent of millennials take action after being influenced by a mobile post and 49 percent of store purchases are influenced by digital interactions. A vast majority of consumers’ first impressions happen on mobile. Sharafi insists that even though shoppers may ultimately make a purchase on a desktop computer or in a store, retailers must have a mobile-first mindset.
SUSAN REDA Editor, STORES Media email@example.com
Southern Oregon Business Journal
Josephine Recession Job Losses and Recovery Gains by Wage Level by Guy Tauer
Josephine County has finally recovered the net number of payroll jobs that were lost during the past Great Recession. New data regarding employment and wages by industry for the second quarter of 2016 were recently released and show employment just above the pre-recession total. At the pre-recession peak during the second quarter of 2006, there were 25,817 payroll jobs in the county. By the second quarter of 2010, payroll employment fell by about 3,200. As of the second quarter of 2016, the county gained 3,295 jobs during those six years during the recovery, putting the figure just above the pre-recession total. These detailed industry statistics can shed additional light on what industries have added employment and the average wage per job those industries pay. This analysis examines job losses and gains by wage level from before the Great Recession and through the recovery so far. Industries were grouped to split those roughly 22,100 jobs into nearly equal sized groups. Detailed industry data was used in this review, however there are a few industries that are excluded because the data are suppressed due to confidentiality laws.
Lower-Wage Industries Lower wage industries paying less than $23,400 on average lost about 390 jobs during the Great Recession, a decline of 6.7 percent. During the recovery from second quarter 2010 to second quarter 2016, lower-wage industries gained 1,026 jobs, rising by 19 percent during those six years. Looking at the trend over the past decade, employment in "private households" rose by 222. Food services and drinking places ($15,788 annual wage) also added more than 200 lower-wage jobs in the county since second quarter 2006. Food manufacturing gained 95 jobs, with an average annual wage of less than $18,500. Membership organizations and associations ($18,768) added about 50 jobs, as did accommodations ($16,564). Medical and recreational marijuana dispensaries are mostly included in membership organizations, likely contributing to some of that growth. Lower-wage industries losing jobs over that decade included printing and related support activities (-26) and food and beverage stores (-54).
Medium-Wage Industries Payroll employment in Josephine County's private-sector medium wage industries â€“ those paying between $23,400 and $37,599 on average â€“ dropped about 1,220 jobs during and just after the Great Recession, from second quarter 2006 to second quarter 2010. During the past six years, this group of industries has fully recovered from those losses, gaining about 1,335 jobs. Taking a longer-term view on employment change, from second quarter 2006 to second quarter 2016, shows a mixed bag among medium-wage industries. Those adding jobs included nursing and residential care facilities (+240), administrative and support services (+210), transportation equipment manufacturing (+160), and crop production (+120). Medium-wage industries with notable job loss over that decade were nonmetallic mineral product manufacturing (-170), wood product manufacturing (-220) and specialty trade contractors (-500). These figures show that while many jobs have returned, those related to the housing and building boom era of the mid-2000s are still below their pre-recession employment peaks.
High-Wage Industries Higher-wage industries, which paid more than $37,600 on average, lost 1,150 jobs between second quarter 2006 and second Southern Oregon Business Journal
Josephine Recession Job Losses and Recovery Gains by Wage Level (Cont)
quarter 2010, a decline of 16.4 percent. During the subsequent recovery through second quarter 2016, higher-wage industries gained back just 450 of those jobs, a rise of 7.7 percent. Looking at the longer-term trend over the decade, ambulatory health care services had by far the largest job gain, up by nearly 450. Insurance carriers and related activities (+165) and management of companies and enterprises (+123) also added numerous higherwage jobs. Professional and technical services added about 50 jobs over the decade. Many higher-wage industries are still below their pre-recession job totals. Many of these are associated with the housing bust and slow recovery in the housing and building sector. Construction of buildings (-326), forestry and logging (-132), and heavy and civil engineering construction (-76) are still below their prior pre-recession employment totals. Other higher -wage industries losing jobs over the decade include merchant wholesalers (-277), computer and electronic product manufacturing (-233), plastic and rubber products manufacturing (-177), and credit intermediation and related activities (-173).
Trends in Average Weekly Hours for All Employees One often asked question is about full-time versus part-time jobs. Are the new jobs that are being added offering fewer work hours? We don't have the break-out between part and full-time employment for local areas, but Oregon statewide trends show little change over the past 20 years in the distribution of jobs between full and parttime. About 80 percent are considered full-time and about 20 percent are part-time in Oregon. During and shortly following the recession, there was a very slight increase in part-time jobs, but in the later stages of Oregon's recovery, the split between full and part-time employment has edged back closer to its historical 80/20 split. Data are available for Josephine County on the average weekly hours worked for all employees. This shows a generally rising average workweek after the Great Recession, but a recent decline from a peak figure in March 2015 of 34.7 hours to 31.9 in September 2016. Average weekly hours for all employees were essentially unchanged from September 2015 to September 2016. Looking at broad industry trends by sector over the past decade shows education and health services, professional and business services, other services and leisure and hospitality adding jobs. On the other hand, information, wholesale trade, construction and manufacturing are still below their pre-recession employment peak in 2006. While job growth is one economic indicator, diving a bit deeper into the quality, i.e. wage level, of those jobs sheds additional light on the economic health of county. While average wages and number of jobs are factors in an area's overall income and poverty rates, other sources of income such as proprietor's earnings, retirement and investment income are also factors to be considered. A recent analysis from a prolific economist with the Oregon Office of Economic Analysis, Josh Lehner, looked at some of these broader trends for Josephine County. This can be found at https://oregoneconomicanalysis.com/2016/11/03/poverty-and-progressjosephine-county-edition/.
Southern Oregon Business Journal
Labor Productivity Improvements: History and Future by Christian Kaylor
Labor productivity is the output of a worker in a given amount of time. If it takes you 10 minutes to change a car tire, that is your labor productivity for changing car tires. Put another way, you could change six car tires per hour. Labor productivity is expressed as a ratio, like miles per hour. At 30 miles per hour, a car travels 30 miles in every passing hour. Step on the gas, and it can travel at 60 miles per hour – covering twice the distance in the same amount of time. A car is a machine that takes time and gasoline and converts it into distance. A faster car is a more productive machine; it goes farther in the same amount of time. We can think of labor productivity in similar terms. Any time you make something, say a tuna fish sandwich, you are consuming your time and getting a sandwich in return. The speed at which you can make a tuna fish sandwich is your labor productivity for tuna fish sandwiches. If you speed up the process, you can either make more sandwiches per minute or you will use fewer minutes to make a tuna fish sandwich. Either way you are better off, because time is money and tuna fish sandwiches are delicious! Labor productivity has major economic implications. Producing more goods – food, clothing, medicine, and transportation, for example – that make us better off with less effort translates into an improved standard of living. The wealth of the United States owes much to advances in labor productivity. Improvements in the standard of living can be achieved only with sustained increases in labor productivity.
Good for Business Businesses, like people, are keenly interested in saving labor. According to the Bureau of Labor Statistics, labor costs represent about two-thirds of the value of output produced for the U.S. business sector. Building the same product with less effort saves a company money and allows it to sell products for less than the competition. We call this "improving labor productivity." Labor productivity is a fancy term economists use to describe a simple concept. Let's return to our sandwich example. Imagine that it takes your friend John five minutes to make a tuna sandwich. We would say that the product of five minutes of John's labor is one tuna sandwich. Since there are 60 minutes in an hour, we could say that John produces 12 tuna sandwiches for every hour of labor. John's labor productivity, with respect to tuna sandwiches, is 12 sandwiches per hour. Simple, huh? Southern Oregon Business Journal
Now, let's say you want to start a tuna sandwich store and decide to pay John $10 an hour for making sandwiches. Remember, in one hour he makes 12 tuna sandwiches. Dividing $10 in wages by 12 tuna sandwiches means that you are paying John about 83 cents for every tuna sandwich he makes. How can you decrease the amount you're paying to produce a sandwich without cutting poor John's paycheck? You can do it by increasing his labor productivity. We are talking about labor, but many things go into making a tuna sandwich: bread, a can of tuna, and mayonnaise are the key ingredients. In addition, John uses tools: a knife and a can opener. If John did not have these tools, he would have a much harder time putting together the sandwiches. Giving John better tools – an electric can opener, for instance – would improve his productivity. There are many ways to increase labor productivity. Upgrading equipment is one common way. You could also improve organization, buy better raw material, and specialize parts of the process. You could buy John an electric can opener to replace his manual one, and buy bread that has already been sliced. Increases in labor productivity using techniques such as these have been occurring for many years.
Nontechnical Labor Productivity Improvements Improved labor productivity is commonly associated with application of new scientific technology. However, nontechnical ideas can also profoundly improve productivity. Adam Smith began his 18th-century economics classic, The Wealth of Nations, with a chapter called the "Division of Labor." He described the 18 separate assembly steps in making a single metal pin. He estimated that a single person, working alone, could make 20 pins in a day. He also observed that 10 people on an assembly line could make 48,000 pins in a single day – an output of 4,800 pins per worker per day. That's quite an improvement in labor productivity. "The greatest improvement in the productive powers of labor, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labor," Smith wrote. Henry Ford's application of such techniques to the automobile assembly line is a well-known innovation that greatly increased labor productivity. Consequently, the price of cars dropped low enough for millions of Americans to afford one. 16
Labor Productivity Improvements: History and Future (Cont.)
In Oregon, Portland inventor Henry Phillips in 1936 patented a new type of screw head that was specifically designed to allow assembly line autoworkers to more quickly and easily seat the screwdriver into the screw. The result: the Phillips head screw. By 1940, the Phillips head screw was the standard in the automotive industry. An early advertising brochure from the American Screw Co. touts the "hours saved" by using the Phillips head screw. Today, the Phillips head screw is commonplace.
information technology (IT). During the 1990s, computers, databases, and e-mail largely replaced the office typewriter, card catalog, and memo. Through the late 1990s, these changes created real effects in speeding the growth of the U.S. economy. Today, these technological improvements have stabilized somewhat as the IT revolution has slowed. Offices continue to buy better computers and better software, yet the improvements seem relatively minor compared with those of the 1990s.
The Oregon Employment Effect
Experts believe the surge in productivity in the last decade was due to the two major recessions in a single ten-year period. In both recessions, businesses were forced by a declining economy to lay off lower skilled, less productive workers to save money. To compensate for the employment decrease, businesses continued to invest in machines and computer technology to do more with fewer workers. The end result is a more efficient economy which requires fewer workers.
It's been generations since Henry Phillips improved productivity with his revolutionary fastener. Yet innovation continues and the results are apparent in employment and production numbers. From 1998 to 2015, Oregon's gross state product – the value of all goods and services produced in a year within the state's borders – increased from slightly more than $105 billion dollars to more than $215 billion dollars (2015 dollars). That's a doubling of output in 17 years! That's an impressive feat, but there's another twist. Over the same period, Oregon's covered employment went from 1,562,859 to 1,779,200 workers. That 14 percent increase, while large, is dwarfed by the 105 percent increase in output. This implies that the average Oregon worker was producing much more (in dollar terms) than in 1998. Over those 17 years, new businesses developed while others faltered. New jobs were created while others were eliminated. However, Oregon workers managed to roughly double their output while the workforce increased by only 14 percent. That's a great example of improved labor productivity.
The Current Boom in Productivity The Bureau of Labor Statistics tracks U.S. productivity growth quarterly. These data paint a fascinating portrait of labor productivity today. From 1973 to 1990, U.S. nonfarm productivity grew at a relatively low annual average rate of about 1.5 percent. At that rate, it would take 47 years for productivity to double! However, from 1990 to 2000, the rate increased to an annual figure of about 2.3 percent per year. Then from 2000 through 2007 productivity surged ahead at 2.7 percent per year. That may seem like a small improvement, but at that rate, it would take only 28 years – slightly more than a generation – for productivity to double. Productivity gains have moderated more recently, averaging 1.2 percent annually from 2007 through 2013, a rate that is more similar to historical norms in the 1970's and 1980's. What led to the increase in productivity growth in the 1990s? The consensus among economists points squarely at Southern Oregon Business Journal
The Future of Productivity Growth Economists who study labor productivity have noticed that, although personal computers first appeared in offices and factories in the 1980s, it wasn't until the mid-1990s that their effect was seen in productivity numbers. This has led to speculation that there is often a delay of several years between the introduction of an innovation and its ability to noticeably affect productivity. Perhaps the improvements could take place only once a "critical mass" of firms had access to computers and e-mail. On the other hand, in today's highly competitive global economy, businesses seem eager to embrace any innovation that might give them an edge on the competition. It's quite possible that technological advancements being made today in nanotechnology, genetics, fiber-optics, and alternative energy will fuel productivity growth for decades. Some people lament the loss of jobs that typically accompanies labor productivity improvements. Certainly, economic transition can be painful to workers trying to develop new skills in an ever-evolving workplace. Still, the bulk of the economic growth that Oregon and the nation have enjoyed has come from improvements in labor productivity. We did it by working smarter, not harder. Productivity growth comes from innovation – ideas that entrepreneurs like Henry Phillips bring to industry. Christian Kaylor Workforce Analyst Multnomah County firstname.lastname@example.org
Brookings on the Rebound Greg Henderson Southern Oregon Business Journal email@example.com On the Southwest tip of the Southern Oregon Coast lies the idyllic community of Brookings. If you’ve been there and didn’t stay you probably want to go back. If you haven’t been to Brookings, you need to go. It’s certainly one of those “Bucket List” kind of places. No matter what the weather the ocean will grab you by the senses. With seven miles of shoreline the 6500 residents have plenty of room for including visitors on their beach-walks.
Southern Oregon Business Journal
When the announcement was made that Rayâ€™s was going to close and 35 employees would be out of a job there was a shared disappointment among many residents. But, City Manager, Gary Milliman is much more optimistic than that: â€œWe could immediately replace those 35 lost jobs with the opening of the Emergency Department at Curry Medical Center. Construction is complete. State authorization to open the ED is approved. What is needed is about $1.5 million in operating capital to enable Curry Health Network to hire the employees and sustain the new operation until it starts generating revenue. More jobs could be added by developing and marketing the Brookings Airport and adjacent industriallyzoned property. The City is poised to pursue this aggressively. We have offered to purchase the Airport from the County. The City and USEDA have invested over $2.7 million in providing water and sewer service to the Airport and adjacent lands. The owners of the Lone Ranch development are poised for initial construction of the first phase of housing. This would not only create housing construction jobs, but would help address the housing shortage in the Brookings area. Funding is needed to complete sewer system improvements.
Retail businesses go through cycles of ups and downs but most economists believe the down on one business may be a result of changing demographics and cultural expectations that arrives with the entrance of new businesses.
Southern Oregon Business Journal
We have met with a prospective new owner of the Raysâ€™ property.
Mini Pet Mart will be opening their new store right next to Rays Market by the end of the year.
The City has entered the tourism promotion business. We are exploring a number of initiatives to boost tourism, including the expansion of the Harris Beach State Park campground. The City has assumed management of the Salmon Run Golf Course and has invested over $200,000 in the rehabilitation of the facility. The City and the County are members of the Border Coast Regional Airport Authority, which has been successful in improving commercial air service to the Del Norte County Regional Airport. The City secured Oregon State funding to assist in the construction of a new Airport Terminal and runway improvements. The City and ODOT are investing over $3.4 million in infrastructure improvements along Railroad Street in Brookings to provide an attractive environment with adequate water/sewer/transportation services for business expansion. There are more stories to tell. There is great potential for positive economic growth.â€? Southern Oregon Business Journal
Every day brings new challenges and opportunities, large and small. Oftentimes even seemingly small issues prove to be a bit larger than they appear. There is a nest atop the communication tower near city hall. Osprey’s decided it was a perfect place to build a home. Apparently, they didn’t know about eminent domain and that they would have to move. They are a protected species, however, and would have to have a suitable substitute nesting place provided. A “Certified Tower Climber” has been located and will take care of the move.
Osprey’s find a home
The Old The New
There is a tree about 100 yards up the hill from the tower that will be pruned and sufficiently secured for the move of the nest to the new address before the osprey return from their winter migration. Gary Milliman believes they will be quite pleased.
Southern Oregon Business Journal
City Manager Milliman’s comments add a comfortable calm to any gloomy conversation wedging its way into enthusiastic optimism about the energy in Brookings. The positive outlook for all that is going on and all that will be happening soon holds in store quite an economic promise.
City History The community of Brookings was originally established in 1913 by John E. Brookings, cousin to Robert S. Brookings of the Brookings Institute, when he moved his lumber business from the San Bernardino Mountains of Southern California. One of the first things John Brookings did when he relocated was to hire renowned architect, Bernard Maybeck, to lay out the street design for the core area of the City. Since its incorporation in 1951, the City of Brookings has grown in population and area; it is now the largest city in Curry County. Much of the City’s population growth since the 1980s, when Brookings was “discovered” as a great place to live, has been from retirees moving to the area to enjoy the mild climate, beautiful coastline, and many scenic and recreational amenities.
Gary Milliman City Manager, MPA/USC, CCM/ICMA City of Brookings 898 Elk Drive Brookings, OR 97415 541-469-1101 | Fax 541-469-3650 Southern Oregon Business Journal
Are You Ready for Oregon's New Paystub Law? The 2016 Oregon Legislature passed SB 1587, which changes the requirements for what an
The employee’s gross wages for the pay period; The employee’s net wages for the pay period;
paystub. The governor signed the bill into law in
The amount and purpose of each deduction made during the respective period of service that the payment covers;
April 2016, and the new law's provisions are
Allowances, if any, claimed as part of minimum wage;
effective January 1, 2017. Are you and your
For non-exempt employees, the regular hourly rate or rates of pay, the overtime rate or rates of pay, the number of regular hours worked and pay for those hours, and the number of overtime hours worked and pay for those hours; and
employer needs to include on an employee’s
clients prepared? OSCPA Update: Oregon's new paystub law amends ORS 652.610 with new provisions that require Oregon employers to provide much greater detail on employee paystubs. Read the bill's provisions. OSCPA encourages you to review your and your client's payroll practices to ensure compliance with the new law in time for the January 1, 2017 effective date. The following article is a summary of SB1587, written before the bill was signed into law. Nevertheless, this article provides a good overview of the new paystub requirements. [Prior to Oregon's new pay stub law], ORS 652.610 required employers to provide employees “with a statement sufficiently itemized to show the amount and purpose of the deductions made during the respective period of service that the payment covers.” SB 1587 changes this general requirement, and employers must now provide a paystub in writing and include the following information on each paystub: The date of payment; The dates of work covered by the payment; The name of the employee; The employer’s name and business registry number or business identification number;
For employees paid on a piece rate, the applicable piece rate or rates of pay, the number of pieces completed at each piece rate and the total pay for each rate. Electronic Paystubs Additionally, many employers provide paystubs to their employees electronically, and the bill creates some new requirements in order to continue that practice. To provide a paystub in electronic format, the employee must expressly agree to receive the statement in electronic form, and the employee must have the ability to print or store the statement at the time of receipt. All employers should check their paystubs or check with their payroll company to make sure all the required information is being included. Additionally, if your organization provides paystubs electronically, you will need to ensure that employees have a way to print the paystub, and you will need to have employees sign a form that authorizes the electronic dissemination of the paystub. By Ryan Orr, JD, HR and Compliance Consultant Cascade Employers Association firstname.lastname@example.org
The address and telephone number of the employer; The rate or rates of pay;
Whether the employee is paid by the hour, shift, day or week or on a salary, piece or commission basis; Southern Oregon Business Journal
20% of Retail Sales are during the Christmas Season By: Barbara Farfan
Types of Businesses in the Retail Industry: Generally, any business that sells finished merchandise to an end user is considered to be part of the retail industry. Sales figures and economic data is sometimes reported separately for restaurants and automotive-related businesses, but by definition they are considered to be members of the retail industry as well. This is the 13 major types of retailing businesses, along with the percentage of total sales each generates annually in the U.S. retail industry, according to the most recent figures released by the U.S. Census Bureau: 20.0% - Motor vehicle & parts dealers 13.0% - Food & beverage stores 12.5% - General merchandise stores (hypermarkets, department stores, discount stores, warehouse clubs) 11.0% - Food services & drinking places 10.0% - Gasoline stations (and convenience stores) 9.2% - Non-store retailers (Internet shopping, catalog, direct sales, etc.) 6.0% - Building material & garden dealers (home improvement) 6.0% - Health & personal care stores (pharmacy/drug stores) 5.0% - Clothing & clothing accessories stores 2.3% - Miscellaneous store retailers (specialty retailers) 2.0% - Furniture stores 2.0% - Electronics & appliance stores 1.7% - Sporting goods, hobby, book & music stores Two Methods of Retailing in the Industry: Brick-and-Mortar Store Retailers – Those engaged in the sale of products from physical locations which warehouse and display merchandise with the intent of attracting customers to make purchases on site. Non-Store Retailers – Those engaged in the sale of products using marketing methods which do not include a physical location. Examples of non-store retailing include: Mobile-only retailing (m-commerce) Internet-only e-commerce Infomercials Direct Response television advertising Catalogue Sales In-Home Demonstrations Vending Machines Multi-Level Marketing Busiest Season for the U.S. Retail Industry: Approximately 30% of the annual sales of the largest U.S. retail chains and almost 20% of the U.S. retail industry's annual sales come from the Christmas holiday shopping season. The strategic decisions and marketing tactics used on key shopping Southern Oregon Business Journal
days like Black Friday, Cyber Monday, and Super Saturday can make or break a retailer's revenue results for an entire calendar year. Effects of the U.S. Retail Industry Recession and Future Outlook: No report on the U.S. retail industry would be complete without a mention of December 2007, which marked the official beginning of the most massive global retail recession since the Great Depression. In September 2009, Federal Reserve Chairman Ben Bernanke declared the recession was "technically" over in the U.S. In the retail industry, the recession caused record-breaking declines in sales, inventories, consumer confidence, and stock prices. At the time when Bernanke pronounced the recession to be over, experts were estimating the after effects of the recession would last from 18 months to 11 years. In 2015, although the U.S. retail industry is expanding, not recessing, the lingering effects of the Great Recession can be seen in the dramatic shift in consumer buying habits and preferences. The post-recessionary retail industry is all about the empowered consumer and the most successful U.S. retail chains will need to be able to deliver what consumers want (and as quick as they want it, in the way they want to receive it) or die. What is the Retail Industry? The retail industry is a sector of the economy that is comprised of individuals and companies engaged in the selling of finished products to end user consumers. Multi-store retail chains in the U.S. are both publicly traded on the stock exchange and privately owned. An estimated two-thirds of the U.S. gross domestic product (GDP) comes from retail consumption. Therefore, store closings and openings are used an indicator of how well the U.S. economy is doing overall. In 2016, a significant number of store closings and bankruptcies are an indication of both shifting consumer preferences, and an unsteady economy. Size of the US Retail Industry Worldwide, total retail sales were more than $22 trillion in 2014, according to a report from eMarketer.com. In 2105 retail sales were expected to reach $24 trillion in 2015. Total annual U.S. retail sales have increased an average of 4.5% between 1993 and 2015, according to the U.S. Census Bureau. Retail Employment, Jobs and Careers: As of May, 2015, 15.7 million people were employed in the U.S. Retail Industry according to the U.S. Bureau of Labor Statistics. Despite a significant number of store closings and retail company bankruptcies in 2015, retail employment expanded every month in 2015, except for January. This indicates that the growth of the U.S. retail industry overall is outpacing aggregate of individual retail chain downsizings and bankruptcies. the balance An About.com Brand https://www.thebalance.com/us-retail-industry-overview
Southern Oregon Business Journal
The Carriage Works Opts To Remain In Klamath County For Expansion Of Business Klamath Falls, Oregon – Klamath County Economic Development Association (KCEDA) is pleased to announce that The Carriage Works recently completed the purchase of a new facility to accommodate future expansion of the business. The company purchased a 42,000 square-foot building at 6600 Arnold St. When the Dunhams bought the business in 2015 they quickly expanded their workforce with five new employees . Now, after almost two years as the Carriage Works owners, they are poised for an even larger expansion in Klamath County. Brian Dunham indicates that they anticipate moving into the new facility in 1st Quarter 2017.
When asked about why they choose to remain in Klamath County Dunham said, “The Klamath County community has been very welcoming – the city, county, the Klamath County Economic Development Agency and people about town. It’s much appreciated.” Southern Oregon Business Journal
With the new facility awaiting the move of Carriage Works, Dunham indicted that they will effectively almost double their work space. He looks to some of their newer clients – like the Oregon Zoo and Hotel del Coronado in San Diego (who just purchased three new bars to be towed behind dune buggies on the beach sands) – along with a possibility of branching into actual food trucks as sources for additional business. “Carriage Works is an excellent business, and we are delighted at their decision to remain and grow in Klamath County,” said Greg O’Sullivan, executive director for KCEDA.
About The Carriage Works More than 10,000 carts, kiosks and RMUs (retail merchandising units) have been designed and manufactured by The Carriage Works over the last four decades. Their manufacturing facility is located in Klamath Falls, Oregon, with employees drawn from a small town environment with a great history in wood products. Visit www.carriageworks.com for more information.
About the Klamath County Economic Development Association (KCEDA)
Since 1975, KCEDA has reflected the best of private enterprise, responsibility and dedication. Its mission is to provide tailored recruitment and retention/expansion programs, new opportunities for jobs, and a diversified, value-added industrial base/expanded economic development climate in southern Oregon. Learn more at www.ChooseKlamath.com. Southern Oregon Business Journal
How Obamacare Could Have Saved the Economy Opinion: By Patrick Watson : http://www.mauldineconomics.com/connecting-thedots/how-obamacare-could-have-saved-the-economy/ Some people say Obamacare was designed to fail, a clever attempt to pull us toward socialized healthcare. I don’t know if that’s true. But it’s a fact that Obamacare is failing. The so-called reform never worked very well because it didn’t reduce the underlying cost pressures. Now it’s falling apart. This is sad. You see, Obamacare’s dark cloud had a silver lining that might have sparked economic growth like we haven’t seen in decades. I’m not kidding. We could have had a magnificent boom that put millions to work and wiped out all our debts. Obamacare had that potential. Yes, I know this sounds nuts—but it’s true. You’ll see when we connect a few dots.
Dot #1: How an Economy Grows If you want your country’s economy to grow, you need the right conditions. Some are unchangeable: geography, climate, natural resources. You just try to make the best of them. Others, like education, culture, and government policies you can control or at least influence. One ingredient you absolutely must have for economic growth is also the rarest: smart people with entrepreneurial vision. They’re the job creators, the ones whose ideas and persistence build growing, successful businesses. Such people don’t grow on trees. We hear about famous entrepreneurs like Henry Ford, Ray Kroc, and Steve Jobs, but many thousands of small business founders aren’t so celebrated. They may only employ a handful of workers, but as a group they’re the economy’s backbone. We would not last long without them. This being the case, we want to set conditions that help these entrepreneurs bring their ideas to life. The last thing we should do is slow them down or create obstacles. But that’s exactly what our healthcare system does.
Southern Oregon Business Journal
Dot #2: Uneven Access Even if the law didn’t mandate it, health insurance is a necessity today. We’re all vulnerable to accidents or serious disease. Medical bills are the #1 reason why Americans go bankrupt. Health insurance helps control that risk. Yet health insurance is a patchwork in the US. People over age 65 and the seriously disabled have Medicare. Poor people have Medicaid. Full-time workers in large private or government organizations have employer-sponsored health plans. Lower-income workers can buy subsidized Obamacare. Very wealthy people simply pay out of pocket. That’s not everyone. Who’s missing? People with part-time jobs. The self-employed. Workers in companies too small to offer a health plan.
Entrepreneurial people who start new businesses are usually in one of those last few categories. How do they get health insurance? Many didn’t get it until Obamacare launched in 2014. Individual coverage existed, but it grew very expensive in recent years. It wasn’t available at all if you or someone in your family had even a minor preexisting condition. Insurers wouldn’t take the risk at any price. Obamacare tried to solve this problem by making health insurance available to all through the state and federal exchanges. Anyone not otherwise insured can sign up, even with preexisting conditions. Yes, Obamacare is a big, sprawling program with a lot of challenges. But this particular part of it filled an important gap. It would have given everyone access to health insurance for the first time in many years. That, in turn, would have helped more would-be entrepreneurs make the leap from corporate jobs to selfemployment. It would also have helped them attract talented workers in the critical first year or two. Obamacare may actually have done this initially, but it’s certainly not doing it anymore. 28
How Obamacare Could Save the Economy (Cont.)
Dot #3: Taxing the Future The theory was that the individual mandate would bring enough people into the exchange system to have a cost-effective risk pool. It hasn’t worked out that way. So, unless your income is low enough to qualify you for subsidies, the Obamacare plans are unbelievably expensive. Premiums got substantially higher this year, even doubling in some places. Here are some examples from Naples, Florida (via Bob Laszewski’s Health Care Policy and Marketplace Review).
Family of four, mom and dad age 40, two kids. Lowest Bronze annual premium $13,176. Deductible $7,150 single, $14,300 family. Income $130,000. Not eligible for subsidies. Single woman age 45. Lowest Bronze premium $4,968. Deductible of $7,150. Income of $50,000. Not eligible for a subsidy. Couple ages 64 and 61. Lowest Bronze premium $20,004. Deductible of $7,150 single and $14,300 family. Income of $150,000. Not eligible for subsidies.
The numbers are even more eye-popping if you think of them as percentages of income. For the family of four or the 45-year-old single woman, health insurance is effectively a 10% extra income tax with no deductions. It’s even more if anyone actually gets sick. If you’re deciding whether to leave your corporate job to start a new company, would these numbers encourage you? Probably not. Ditto if you have the chance to work at a startup that doesn’t offer health benefits.
businesses never get off the ground because the would -be founders can’t get health insurance for their families and workers? We can’t know, but I think it’s a big number. Even if it’s only a few, they could still launch enterprises that employ millions of people. If more entrepreneurs could get healthcare, the economy would boom. Tax revenues would rise. Some of the issues that made voters so angry this year would improve. For the family of four or the 45-year-old single woman, health insurance is effectively a 10% extra income tax with no
This problem isn’t natural. It is a purely man-made barrier created by politicians of both parties and aided by corporate lobbyists.
The new president and Congress will have a chance to fix it, but tinkering around Obamacare’s edges won’t be enough. Nor will repealing it and going back to the pre-2014 mess. I don’t claim to have the answer—but I’m sure there is one. Other countries somehow do this without becoming dictatorships or taxing everyone to death. The US can, too. When we do, it will help restore the kind of economic growth that made America great. And that idea deserves all our votes. See you at the top,
An Economy in Chains This is a real problem. All over the US, smart people with great ideas can’t put them in action because the Affordable Care Act doesn’t deliver affordable care. They have little choice but to work for someone else so they can have health coverage. Sure, you might still take the leap if you’re healthy and single. But even then, your investors and workers would rather you didn’t take the risk. They need you healthy and productive. And what if you have young children? No caring parent would leave them uncovered. Our healthcare patchwork restricts labor mobility. That’s bad because we all benefit when people are free to find the best match for their personality and skills. Anything that reduces labor mobility is economically harmful. Here’s the key question: How many potentially great Southern Oregon Business Journal
Patrick Watson Senior Economic Analyst Patrick Watson is a master in connecting the dots and finding out where budding trends are leading. Patrick is the editor of Mauldin Economics’ high-yield income letter, Yield Shark, and co-editor of the premium alert service, Macro Growth & Income Alert. You can also follow him on Twitter (@PatrickW) to see his commentary on current events. Patrick Watson’s Bio Before joining Mauldin Economics, Patrick was the managing editor at All Star Fund Trader, an award-winning advisory service near the top of Hulbert Financial Digest ratings for eight years. For over a decade, he was a contributor to Weiss Research, and he served as an equity portfolio manager for high net worth investors. 29
Chambers and Cities Summit Continues to Inspire after Six Years
usy? Arenâ€™t we all.
Six years and 11
Summit meetings ago the Douglas County Chambers & Cities Summit began with the idea that all the dozen communities of Douglas County were needed to share their talents and experiences to enhance recovery from a challenging recession that seemed to have a life no one could understand.
Everyone has an idea; in fact, everyone has a good idea.
Lance Colley, Roseburg City Manager & Jim Caplan
There are always more issues to discuss than time to discuss them, but the connections made create a bond between professionals that make follow-up easier and more certain. The contacts made in this networking effort create avenues for idea sharing and problem resolutions well after the summit event has ended.
Oakland Mayor Betty Keely
Southern Oregon Business Journal
David Longthorn discusses Solar Power 30
Commissioner Susan Morgan illustrated to attendees of several summit meetings the analogy of sharing money and ideas. Her example: “If I have a dollar and you have a dollar and you give your dollar to me, then I have two dollars and you have no dollars. But, if I have an idea and you have an idea, and you tell me your idea and I tell you mine, then you have two ideas and I have two ideas.”
Commissioner Susan Morgan Addressing the Canyonville Chamber Summit
Sharing ideas is much of what the summit meetings are all about. That and exchanging contact information and business cards. Networking, they call it.
The informality of the meetings has served to expand the awareness of them including to Salem and to officials from State Government who arrive with the full expectation that they will assist in rebuilding businesses and the local economies. Face-toface impromptu meetings over lunch and during breaks has been amazingly productive for everyone concerned. Putting a face to a name is a hard communication been amazingly productive for everyone concerned. Putting a face to a name is a hard communication tool to break. Ted Romas, who has served as the “wagon master” for all eleven summits, stated that, on average, about 40 people have attended each of the semi-annual “meet and greet” events. He also said that, to date, all but two Douglas County cities have hosted a summit. He hopes that after Summit 12 (May 2017) and Summit 13 (November 2017), there will be interest in starting “Round Two” of these popular gatherings.
Umpqua Basin Economic Alliance (UBEA) Overview The Umpqua Basin Economic Alliance (UBEA) was formed by a small group of people interested in achieving full employment for Douglas County residents through outreach and communication. The UBEA currently has a Board of Directors and members who have been meeting regularly since early February 2011. The group is incorporated in the State of Oregon and has a Memorandum of Understanding with CCD, the Coos/Curry/Douglas Business Development Corporation related specifically to UBEA fundraising activities. The idea for the UBEA came about after the successful Douglas County Economic Development Forum held in October 2010 at the Winston Community Center. At that forum 40 economic development stakeholders, practitioners and community leaders met to review and discuss findings from studies completed by the University of Oregon and Oregon State University and included an overview of economic conditions in Douglas County over the past 40 years. Since then there have been eleven well attended Douglas County Chambers & Cities Summits held semi-annually at locations all around Douglas County.
Southern Oregon Business Journal
Jacksonville Historic Town with National Recognition Smithsonian Magazine Names Jacksonville Place to Visit in 2016 Smithsonian Magazine included Jacksonville in a recent article “The 20 Best Small Towns to Visit in 2016”. Inspired by the 100th Anniversary of the National Park Service.” Jacksonville got its start as a gold rush town. Gold was first discovered at Rich Gulch in 1851. As the news spread the area was inundated by gold miners seeking their fortunes. Before then, the area was populated by the Upland Takelmas native American tribe. They had previously had limited interactions with white people outside of the occasional trapper. The influx of white settlers caused increased friction and eventually the native populations were removed from the area. Originally named Table Rock City because of the view of two mesa about 10 miles away, Jacksonville emerged from the mining campsites and thrived to become the county seat and the largest city in Oregon. http://jacksonvilleoregon.com/history/
Southern Oregon Business Journal
Black Friday Shopping in Jacksonville: With Thanksgiving behind them Black Friday shoppers found Jacksonville to be the perfect setting for stretching legs, casual shopping, fine dining and wine tasting. Andrienne and Pat Powers opened the new location of “Quintessence Décor” on Black Friday this year after moving their business from Grants Pass. They chose the 157 year old building at 120 E. California St. Their plan to increase shopping space to the upstairs will provide shoppers with an even broader experience among a well-designed array of impressive merchandise. Wine tasting at Quady North is a wine lover’s delight. Gold medal wines produced by Herb Quady are an outstanding way to add to the Jacksonville experience. Herb Quady: Fearless leader, Chief Instigator, President for Life, Assistant Bottlewasher.
Herb grew up on the family winery in Central California with a compulsory love for Muscat, but after an accidental exposure to the world of Rhone varieties at the hand of the infamous Randall Graham, he became obsessed with the idea of making (gasp!) table wines. After earning his winemaking props at Fresno State, he eventually found his way into the great unknown of Southern Oregon. While working as the winemaker for Troon Vineyard, Herb and his wife Meloney founded Quady North in 2006.
Jacksonville, a small town with a friendly attitude where visitors and residents meet for the first time and act like they’ve been lifetime friends. It’s an excellent place to take a breath of clean air and wonder how you could make your stay last a little longer.
Southern Oregon Business Journal
Moving At The Speed Of Life “Its time not distance.” The greatest transportation problem we have in Oregon is the time between places. Perspective creates some of the distance problem here. For some reason our location in more rural Oregon is more distant to those urban city dwellers up north than their big cities are to those of us living the good life in paradise. Someone said its twice as far from Portland to Medford as it is from Medford to Portland. To alleviate the blitz away from rural regions we must consider transportation. Speed and efficiency are critical. High speed rail might be one solution. Another is better broad-band and high speed communication in all parts of the state.
Non-traditional jobs will soon replace the eight to five jobs even in rural areas. Keeping young families in rural communities is critical for the survival of our small towns. Freeways created suburbs by making transportation between home and jobs less difficult. Today’s rural areas are in many ways just suburbs a little further away than they were in the 1960’s.
Greg Henderson Southern Oregon Business Journal
Southern Oregon Business Journal
Southern Oregon Business Journal