Greener BeeGreen HolidaysWhy Oregon, Salem economies are seeing green again

Ron Peters appreciates the occasional raise. He also likes having the money to fly his youngest daughter, who studies musical theater in New York, back to Oregon for the holidays.

“Mom likes to always have the daughters home at Christmas,” said Peters, 60.

The manager at Salem Air Fueling recently saw a bump in his pay. He said he will use the extra cash to pay down debts and save, along with having a cushion for family expenses.

Like many, Peters is benefiting from a state and national economy that’s mostly recovered from the Great Recession. Oregon’s business climate has rallied rapidly in the last year, amid reports of lower poverty and uninsured numbers nationwide.

Data released by the U.S. Bureau of Economic Analysis shows incomes are growing faster in Oregon than the nationwide average. Annual data published by the Census Bureau shows that household incomes grew across the board last year, with incomes growing fastest among working-class earners. Add to that a lower poverty rate, which fell quicker last year than it has since 1968 — a data point heralded by the White House.

In Oregon, jobless rates have plummeted, reaching a record 40-year low this spring. Nearly 60,000 jobs were added statewide in the past year, according to Oregon Employment Department data. That’s the most added in any 12-month period since 1990, said State Employment Economist Nick Beleiciks.

More people are joining the labor force, data shows. In Salem, unemployment peaked at 11.3 percent in May, 2009, in the throes of the housing crisis. It has since recovered to 4.6 percent in March, 2016 — better than pre-2007 rates.

The data points translate into real jobs and wage increases.

Oregon’s total personal income grew 1.3 percent in the second quarter of 2016 — that works out to $2.3 billion for workers across the state.

Salem business owners said they’ve noticed the thrum of the local economy in pockets around town.

Brent DeHart, who owns the aviation fueling company where Peters works, gave raises to his four employees this year.

“I think Salem is certainly better than it was in the depth of the Recession,” said DeHart, a former city councilor and Salem Area Chamber of Commerce board president. “But we’ve got a way to go.”

In Oregon, legislation that passed this year to raise the minimum wage has rankled some small business owners. During the summer, the wage increased by 50 cents per hour in Salem and will continue to grow over time.

In the 21 years since she started her pet store, business has trucked along steadily for Darla Biasi, owner of Pet Etc. in West Salem, though she said she has seen a small uptick in the past two years.

She attributes that smooth ride to a philosophy: No matter what, people take care of their pets.

But Biasi pushes back against the new minimum wage rules.

“I don’t like being told what I have to do,” she said.

Restaurateur Dino Venti also has payroll concerns, along with optimism about business growth downtown. He owns two Venti’s Cafe restaurants, and the downtown location just completed a roughly 1,600-square-foot expansion that cost more than his house.

Between his two locations, he employs about 60 people, with three or four new hires.

The wage law that went into effect in July affects how many workers he can bring on, he said.

“I’ve got guys in the kitchen trying to raise families” with $12 per hour wages, he said.

The housing and construction markets, two good measures of economic health, are also improving.

“The thing that shifted us into higher gear are construction jobs,” said Beleiciks, the state economist.

Rich Duncan, owner of a local commercial construction company, has noticed an increase in projects people want done by his firm, but said tighter margins are hurting him. While consumer appetite for his construction is up, he said, overhead and labor costs mean profits aren’t like they were before the Great Recession.

A price bump to offset expenses may not solve the problem, though. “I’d lose to national and regional competitors,” he said.

For Duncan, who employs 23 people, it’s about finding good talent but also being able to pay for it. Almost a third of his workers were hired in the last five years.

The Salem housing market has also improved, with sales up almost 12 percent, this after a 27-percent boost in 2015. Jose Gonzalez, principal broker of Tu Casa Real Estate, said demand for housing has grown.

“It’s a lot better than it was,” said Jose Gonzalez, principal broker of Tu Casa Real Estate, recalling the Recession and its attendant instability. “We felt what our community felt.”

A map of Mexico hangs on the wall in his office. He said his business serves many working-class Spanish-speaking home buyers, but he’s seen an increase in recent years of English speakers looking to buy homes in Northeast Salem, the firm’s primary market.

Housing prices have also increased, said Baltazar Molina, another broker with the firm.

The last two years have been good for business, Gonzalez said. He’s seen a surge of new clients that have felt more secure in their jobs and seen raises.

The home sales market is so good right now, his firm may hire four to six more brokers, he said, and the company is even cutting off its online marketing to manage demand.

“I have no complaints,” he said.

Send questions, comments or news tips to gfriedman2@statesmanjournal.com and jbach@statesmanjournal.com. Follow on Twitter @gordonrfriedman and @jonathanmbach

Article source: http://www.statesmanjournal.com/story/money/business/2016/10/09/why-oregon-salem-economies-seeing-green-again/91227188/


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