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Economy, education on rough ride

Natural resources sector of Oregonís business engine needs to be fueled to help fund schools.

When business leaders get together, they usually talk about all sorts of things: the economy, taxes and regulations.

When Oregonís top business leaders got together in Portland on Jan. 9, though, the conversation was a bit different. Sure, the Oregon Business Plan was debated. This game plan for growing the stateís economy is the product of the Oregon Business Council, whose vast membership believes that the rising tide of a growing state economy floats all boats.

That much is true, but two other subjects seemed to be come up time and again: the stateís spiraling minimum wage and the sad circumstance of the stateís educational system.

Oregon is emerging from a punishing economic recession in which it had the nationís highest or second-highest jobless rate for 41 straight months. Many of the people thrown out of work were not minimum-wage earners. Rather, many were well-paid specialists who were laid off from high-tech jobs.

Several factors are to blame for Oregonís weak economy, but when the natural-resource industries were being dismantled around the state, few statewide leaders appeared to be ready, willing or able to help. As a result, that portion of Oregonís economy was already in trouble when the high-tech bubble popped.

Weíre talking about farming, ranching and timber. Once the stateís leaders determined that those industries could be sacrificed at the altar of protecting fish, birds and butterflies, and that the state could prosper by hitching its future to the so-called Silicon Forest, Oregon placed itself in the precarious position of depending on industries and factors over which it had little or no control.

Thus, when Hewlett-Packard or Intel or any of the other occupants of the Silicon Forest sneezed, Oregonís economy got pneumonia.

If, however, Oregon had continued to nurture natural resource industries, working with farmers, ranchers and timber operators to maintain a balanced and broad economic base, it could be logically argued the state and its citizens would have been much better off.

Be not mistaken. We need the Intels and other non-resource industries, but we need farms, ranches and logging just as much. Oregonís leaders need to work to make sure all sectors of the economy are unfettered by extraneous and damaging laws.

Which brings us to Oregonís minimum-wage law. Here is a message to Oregonís legislature: Fix it, please, before it does more damage to the stateís economy.

Oregonians in 2002 passed an initiative increasing the minimum wage. This was fine. On occasion, the minimum wage should go up, at the direction of the stateís Legislature and after a full debate among those who would be most affected by it.

The mistake we made in passing that initiative was to include an annual increase based on the rate of inflation. This is nonsense. Other than government employees ó and thatís a whole different story ó no one gets an automatic cost-of-living increase. By increasing the minimum wage annually, Oregon each year chips away at the profitability of farmers, ranchers and processors, who are already in a fight for their economic lives.

The well-meaning folks who promote indexing need only look at the federal Social Security system to see the damage automatic indexing can do. When President Richard Nixon agreed to index Social Security benefits, the fund was healthy. Now, 30-plus years of indexing later, it is a disaster waiting to happen, its income unable to keep up with the outflow.

Indexing is an even worse idea for the minimum wage. Farmers cannot just raise the prices of their crops, because they will see their customers go to Idaho, which has a minimum wage $2.35 an hour lower than Oregonís. Or they will go overseas, where workers receive pennies an hour.

Then thereís the stateís education system. From the time a child enters kindergarten to the time he or she graduates from high school, the state poor-mouths schools and parents. Kids are sent into the streets hawking gift-wrapping paper, candy bars and beef jerky to pay for an education that the state is required to fund.

Not only is Oregon cheating its youth, itís cheating itself by not adequately managing its money so we get the biggest educational bang for our tax dollar and by not providing enough money so kids in John Day, Klamath Falls or anywhere else in Oregon get an education that will propel them through life.

The stateís university and community college systems have suffered from the same sort of benign neglect.

Much is made of the fact that Oregon has universities and community colleges, yet nearly every program in nearly every school is constantly short-changed. That is especially true for agricultural programs, where the extension and research functions are a shadow of what they need to be.

It doesnít take a Harvard economist to determine that the quality of Oregonís educational system is directly tied to the stateís economy. If one falters, so does the other.

What weíve been seeing is what happens when both falter.



Page Updated: Thursday May 07, 2009 09:14 AM  Pacific

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