Northwest tussles with faltering economy

When he was governor of Oregon a few years ago, Tom McCall was concerned with keeping his scenic state unspoiled. ''Come and visit us again and again,'' he reportedly told outsiders, ''but for heaven's sake don't move here.''

No such dis-invitation need be proffered now. Oregon has been in the top five states in national unemployment reports for recent months, and last summer state statistics began to indicate more people moving out than in.

Neighboring Washington, which has never discouraged growth, is in similar circumstances. Recent figures from the US Bureau of Labor Statistics show Washington with a 12.3 percent unemployment rate, Oregon with 11.1. Michigan has the highest unemployment rate, 14.3; Alabama is at 13.2; Ohio, 12.3; and Illinois, 11.3.

Figures for nearby California, with 9.4 percent unemployment and Idaho, with 9.8, are not so dramatic (the national average for June was 9.5 percent). But what all four of these Western states have in common is heavy unemployment in the timber industry.

The most recent report by the Western Wood Products Association, covering the week ending July 3, showed 34 percent of sawmill workers in each of the four states were unemployed: 10,689 of 31,076 in Oregon; 6,955 of 20,218 in Washington; 8,222 of 23,900 in California; and 3,234 of 9,400 in Idaho. (These figures do not include other segments of the forest products industry such as paper and plywood mills.)

There is direct correlation between unemployment in construction and the forest industries. Latest figures indicated California contruction employment down by 61,100 since last year, Idaho down 4,845, Oregon 6,500, and Washington 16,287.

In heavily populated and highly diversified California, the sawmill joblessness doesn't have such a heavy overall impact. Nonetheless, the state is going through a budget crisis because of a recession-induced slump in revenues.

Idaho, with its mining industry in an even worse slump than wood products, is witnessing a growing out-migration of workers, says state economist Richard Slaughter. Last fall the Bunker Hill silver mine and smelter at Kellogg shut down, and almost 3,000 mining jobs have disappeared in the last two years.

What's more, says Slaughter, the bumper winter wheat crop in other states is expected to depress farm income and land values in the state. Farmers already are having difficulty getting the loans they need to keep going, he adds.

But by careful matching of revenues and spending - including some sizable cutbacks - Idaho has managed to keep its budget sound.

Other than in wood products, California has no employment segment that is drastically hit. The climb of its joblessness rate from 6.9 percent a year ago to the present 9.5 stems from small rises across the broad spectrum of its economy.

For Oregon and Washington, the picture is grimmer. Only in states with traditions of optimism and self-reliance could one hear state financial analysts so dispassionately recite the dismal figures.

In 11 of 39 Washington counties, says analyst Ron Wallers, the lumber industry is the principle source of jobs. The fact that some sawmills still have uncut logs on hand and can therefore retain mill workers keeps the unemployment figures from going even higher. Complicating the job situation in the state are cutbacks in the aerospace industry and the halting of construction of three nuclear power plants.

Aerospace jobs are down by some 4,000 and the giant Boeing Company, which accounts for most of those, plans further cutbacks. The cancellation of the nuclear plants has thrown some 6,000 people out of work.

As in other states, revenue growth is not keeping up with rising costs in Washington; special legislative sessions have come up with new taxes and budget cuts to precariously balance the current budget. Although the state population is growing slightly, more people are moving out than coming in now, according to Wallers.

Oregon state analyst Jeff Hannum says that timber payments to counties through the US Bureau of Land Management and the Forest Service (from trees on federal land sold to sawmills) will be down this fiscal year by 60 percent or more compared to fiscal 1982. These payments usually are made in October and November. Douglas and Josephine Counties in southwestern Oregon count on these payments for up to 70 percent of their revenue.

One small bright spot recently appeared in the Oregon economic picture. The computer chip industry had begun expanding from California into Oregon. However , Hannum says, that now is at a standstill.

So Oregonians are hitching up their belts, grinning broadly, and opening their arms wide to visitors. Tourism is still a very healthy industry in the state, and officials are putting on a big promotion program to make the most of it this season.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.