State Economist Blog: Font of Credible Information

If you have a question about how Oregon is doing, there is no better place to look at the blog posted by State Economist Josh Lehner that covers topics from craft beer sales, natural disaster recovery and what counties are job magnets.

If you have a question about how Oregon is doing, there is no better place to look at the blog posted by State Economist Josh Lehner that covers topics from craft beer sales, natural disaster recovery and what counties are job magnets.

If you want to know what’s really happening in Oregon, a good place to look for information is the blog published by the Oregon Office of Economic Analysis.

Recent blog posts track a slowdown in craft beer sales, what it takes to recover from natural disasters like wildfires and which counties in Oregon are adding jobs – and which are not. State Economist Josh Lehner, who writes the blog, is also trying to get a handle on the pot industry.

As the chart shows, rural counties depend more heavily on public sector wages for teachers and road crews to bolster their local economies.

As the chart shows, rural counties depend more heavily on public sector wages for teachers and road crews to bolster their local economies.

The writing is anything but dull and the data is credible. Sometimes the findings are downright surprising. For example, large swaths of Oregon’s rural areas identify politically as Republican and presumably favor smaller government, even though public sector wages account for 40 percent or more of the local economy in counties such as Gilliam, Wheeler, Grant, Harney, Lake and Jefferson and more than 25 percent in another 12 counties.

Here are a handful of other interesting nuggets unearthed by the state economist:

  • Slowing craft beer sales, at least so far, hasn’t resulted in an unusual number of brewery closures, but does indicate craft brewing may be maturing as an industry. With eager new brewers entering the market, oversaturation is a real possibility, which could signal a higher rate of closures down the line. At the moment, Oregon sees four to five brewery closures per year at a 2 percent rate. The overall closure rate for US manufacturers is around 7 percent.

 

  • If you want to be a brewer, salaries range upward from $30,000 to as much as $76,000 for brewmasters. Jeff Alworth, author of The Beer Bible, is quoted by Lehner as saying, “These are not terrible salaries, but neither are they going to line a person’s garage with Teslas.”

 

  • Lehner notes that natural disasters have a perverse effect on Gross Domestic Product. Burned houses, lost cars and destroyed bridges are not counted, but rebuilding and replacing them is. So, in a sense, natural disasters are pro-growth.

 

  • “Natural disasters not only scar the land, but they also leave lasting impressions in our brain. I’m from the Great Plains and I remember as a kid seeing the aftermath of the Yellowstone fires of 1988 and the Great Flood of 1993 along the Mississippi River even years after the fact. The apocalyptic pictures we are seeing now of the Gorge, and outside of Los Angeles will leave a lasting psychological mark. Our hope is they do not leave a huge lasting societal and economic mark as well.”

 

  • “Climate. Weather forecasting is even more difficult than economic forecasting a year or two into the future. While the severity, duration and timing of catastrophic events like earthquakes and droughts are difficult to predict, we do know they impact regional economies. Droughts in particular impact our agricultural sector and rural economies to a larger degree. Longer-term issues like the potential impact of climate change on domestic migration patterns are likewise hard to predict and outside our office’s forecast horizon. There is a reasonable expectation that migration flows will continue to be strong as the rest of the country becomes less habitable over time.”

 

  • “Just as Oregon’s economic expansion continues, so too does regional growth across the state. While half of the Oregon’s individual counties are currently at all-time highs for employment, nearly all have added jobs in the past year. Given regional variations, industrial mix, and noisy data, not once in the past 20+ years have each of Oregon’s 36 counties added jobs at the same time. In the second quarter 33 did add jobs over the past year, keeping with the typical pattern seen during expansions. Only Curry (barely), Morrow and Sherman counties lost jobs in the past 12 months.”

 

  • “Some of these job gains in rural Oregon are driven in part due to the local industrial structure and nature of the Great Recession. Many rural economies are more reliant upon housing and government than the larger, more diverse urban economies. It is not so much that rural areas love housing and government. Rather it is the rest of the private sector is smaller, thus making the public sector in particular a larger share. As the economy has continued to improve, migration flows have returned and public-sector budgets are growing again, rural economies across Oregon have seen better growth. Even as the public sector remains a steady share over time in Oregon, that steady share varies in magnitude depending which part of the state we are looking at.”

 

  • The marijuana industry in Oregon is still emerging from the shadow economy, which makes projecting its growth and revenue-generating capacity complicated. State economists nevertheless predict marijuana sales will net the state general fund more than $140 million over the next two years. Tax revenues could slip if the price of marijuana drops, as it has since legalization of adult-use pot in Colorado. It could dry up entirely if the federal government curtails the legal sales of marijuana in states such as Oregon.

 

  • Tracking the marijuana industry is further complicated because it still can’t use the banking system in America and has no classification code. As a result, if a pot-infused edible is sold eventually by a bakery, it may not be counted – or taxed. Similar problems make it hard to estimate how many people are employed in the marijuana industry. The Oregon Employment Department estimates that between 7,000 and 8,000 people are employed in the state’s cannabis industry, with an average annual salary of slightly more than $25,000.