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Oregon Has Highest US Unemployment Rate Despite Rebound - 2003-10-14

For the last year, Oregon has retained the dubious distinction of being the state with the highest unemployment rate in the nation at 8 percent. But while many financial indicators show the Beaver State's economy is beginning to improve, the unemployment rate remains stubbornly high. Economists differ as to the reasons for the jobless recovery.

U.S. interest rates remain at 40 year lows, corporate profits are increasing, and production has been growing for the last seven quarters. Statistics like that usually make economists optimistic.

"Normally employment turns around very closely with output, but it hasn't this time," says bank economist John Mitchell. He explains that as a recession takes hold, large companies lay people off and produce less. When things pick up again, they rehire those workers. But, Mr. Mitchell says, this time it's different. "I mean let's ask ourselves, are people going to be called back to the dot-com's? They're gone!"

Unlike factories and retail stores that can temporarily scale back their operations, many of the high-tech Internet companies that flourished in the 1990s are out of business. Mr. Mitchell says all the jobs putting in the Internet infrastructure are gone forever, too. So during this recession, he says, unemployed workers have either had to move to find work or retrain for jobs in a different industry both activities that take time.

While this situation can be found all across the country, the problem is especially serious in Oregon. Art Ayers of the state Employment Department, blames it on Oregon's natural beauty, Portland's famed livability and the charm of the Pacific Northwest. "People who decide, that if they have to be unemployed somewhere, they'd rather be unemployed in Oregon, because it's a nice place to live. So in my mind, it does add to the unemployment rate," he says.

About 58,000 people are expected to surrender their out-of-state driving licenses to Oregon this year, meaning they're moving here with or without a job.

It's a situation that has many people perplexed and angry, including Tim Nesbitt of the Oregon AFL-CIO labor federation. "We're supposed to have seen nationally 500,000 new jobs by this month this year, according to the President's economic advisors' predictions, and instead we've seen a loss of over 400,000 jobs nationally," he says.

Oregon Employment Department figures indicate the state has lost 50,000 jobs in the last three years, more than almost every other state. Many blame Congress, for passing the North American Free Trade Agreement, and granting permanent normal trade relations to China. Mr. Nesbitt says those actions changed the way America does business. "You know you're now likely to talk over the phone to a technician in India to fix problems with software designed in Singapore for a computer built in China sold back to the U.S. through Walmart, which pays its workers less and provides fewer benefits than its competitors," he says.

The labor advocate says the United States can't continue sending jobs overseas because eventually it will lose the customers needed to drive the economy. "At some point, we need to be a country of workers and consumers, not customers and shoppers," he says.

But Art Ayers, with Oregon's Employment Department, is more optimistic. "Some people will benefit from that trade, for example, consumers who can buy very inexpensive products from other countries here on our shelves. And other people will not benefit from it, they'll be hurt by it, such as people who've lost their jobs because their companies are no longer competitive," he says.

He says economic theory teaches that trade increases the standard-of-living in the countries involved and overall, China, Mexico and the United States will gain from the trade agreements made in the 1990s.

Such theoretical discussions seem a long way from the unemployment office in downtown Portland, where Garry Smith prints off yet another job listing. The former executive assistant says if the economy is improving, it doesn't seem to be generating any new jobs for him. For example, he says, he was in an interview recently where the manager slapped a volume of perhaps 50 resumes on the table and explained there was no shortage of good applicants. "I've even heard stories of people who've done something different to make themselves stand out," he says. "Like someone who sent their resume on a cake, and that's something someone's going to read!"

U.S. employers expanded their payrolls in September for the first time in eight months. Still, the unemployment rate in Oregon remains stubbornly high at about 8 percent.