The Oregon Biz Report - Business News from Oregon

By Oregon Employment Department,

Oregon’s seasonally adjusted unemployment rate was unchanged at 10.6 percent in April, the same level as in March. The rate has been essentially unchanged for the most recent six months. Oregon’s unemployment rate was 11.5 percent in April 2009. In April, 211,688 Oregonians were unemployed. In April 2009, 225,744 Oregonians were unemployed.

As the national economy expands, following one of the deepest recessions in decades, many individuals who dropped out of the labor force are returning. This appears to be happening in Oregon as well. Oregon’s labor force participation rate rose to 64.7 percent in April after reaching a low of 64.0 percent in December.

By Tim Duy,
Oregon Economic Forum
University of Oregon Portland Metro Business Index .
sponsor, KeyBank.

The University of Oregon Portland Metro Business Index (PMBI) rose 1.2% percent to 88.9 (2002=100) in the first quarter of 2010.  Compared to year ago levels, the PMBI is down just 2.5 percent, a significant improvement from the low of -16.9% in the second quarter of 2009.

Highlights include:

•    Labor market data was generally improved in the region. Initial unemployment claims continued to decline, signaling a slower pace of layoffs, which is consistent with improving economic conditions.  Job growth reemerged in the first quarter with the first increase in nonfarm payrolls in two years.  Due to a data collection error, local level initial unemployment claims data is not available for January 2010.  The data was estimated via an average of the year-over-year changes of initial claims for December 2009 and February 2010.

By Bill Conerly,
Conerly Consulting, Businomics,

This is my third (and maybe final) post in the series on the economic effects of our budget deficit and debt.  First I talked about the risk of inflation due to the deficit, then about the potential of a debt crisis in America.  In this blog I’ll explain how I expect our problem to be resolved: higher taxes, leading to slower economic growth.

Here’s the big picture of the annual deficit, based on the administration’s current projections:

By Oregon Small Business Association

Earlier this week Google Inc. announced the amount of economic impact that Google had on each state in 2009. In Oregon, 28,500 advertisers and publishers benefitted to the tune of $510.5 million, either by placing their ads on Google or by placing Google advertisements on their site.  And 80 non-profits benefitted with $1.3 million donated by the search giant.

Recently, for the first time, Google disclosed their revenue splits with search and content publishers. In a blog post on Monday, Google says it pays publishers 68% of the revenue Google collects from advertisers for content ads that appear on the publishers’ sites.  Google said it pays publishers 51% of revenue for search ads.  Previously Google had been unresponsive in requests to reveal it’s revenue splits.

Merkley Joins Robert Menendez and Bill Nelson to Close Tax Loopholes, Save Taxpayers $20 Billion Over 10 Years
Senator Jeff Merkley Press Release

Washington, D.C. – U.S. Senator Jeff Merkley (D-OR) joined Senators Robert Menendez (D-NJ) and Bill Nelson (D-FL) today to announce legislation that will close a number of corporate tax loopholes that allow oil companies to avoid paying billions of dollars in taxes. The Close Big Oil Tax Loopholes Act targets a series of tax breaks related to drilling activities and revenues, as well as foreign tax schemes. Menendez estimates that closing these loopholes will amount to more than $20 billion over ten years for taxpayers…

Among its provisions, the legislation would accomplish the following:

* Recoup royalties that oil companies avoided paying for oil and gas production on public lands

* Prevent oil companies from manipulating the rules on foreign taxes to avoid paying full corporate taxes in the U.S.

* End a number of tax deductions and relief afforded to the oil industry, such as the deductions for classifying oil production as manufacturing, for the depletion of oil and gas through drilling and for costs associated with preparing to drill.

Health Care Reform: The Eight Steps for Employers Now
By Barran Liebman

With all of the press, articles, and presentations covering Health Care Reform and the enormity of the topic, we have prepared a simple guide to what employers must do today or within the next few months to comply with the Health Care Reform requirements. While it is important to begin the planning process for Health Care Reform, it is perhaps more important to not get lost in the broad details and misunderstand or simply miss the requirements taking effect now.

Health Care Reform is effective the first day of your plan year beginning after September 23, 2010. This is the typically the first day of the Plan Year that you list on your Form 5500 or the date on which you annually enroll individuals in health plans (renewal date).

Agency Aggressively Joins in Challenges to Status of Independent Contractors; Announces “ESD is on your tail!
By Nigel P. Avilez and Michael J. Killeen
Davis, Wright and Tremaine LLP

In 2009, Washington state’s Employment Security Department (ESD) paid out nearly $4 billion in unemployment benefits, setting a state record for unemployment claims. This compares to $1.2 billion in 2008 and $725 million in 2007.1 With the increased demands for benefits, Washington, like other cash-strapped states and the federal government,2 is trying to increase payroll tax collections by aggressively challenging independent contractor classifications, tax rates and reporting.

DISCLOSE Act Is Partisan Effort to Silence Critics and Gain Political Advantage
By U.S. Chamber of Commerce,

WASHINGTON, D.C.—U.S. Chamber of Commerce President and CEO Thomas J. Donohue issued the following statement today in response to the House Administration Committee’s markup of the so-called “DISCLOSE Act:”

“The DISCLOSE Act is an unconstitutional attempt to silence free speech and a desperate attempt by Democratic Congressional Campaign Committee Chairman Chris Van Hollen and the immediate past chairman of the Democratic Senatorial Campaign Committee, Senator Chuck Schumer, to gain political advantage in the 2010 elections.

Two videos to watch
1. CNN Money asks questions about Google TV launch
2. Google TV promo video

See other video below:

Governor Ted Kulongoski
Press Release and Summary

Reset Cabinet issues an analysis of state services and fiscal future to educate the public and decision makers in advance of final recommendations next month

Salem – Governor Ted Kulongoski today received an update from the Reset Cabinet he created in September 2009 that provides a thorough analysis of the fiscal vulnerabilities of the state created by the current economic crisis and the long-lasting effects of the recession in Oregon.   The analysis, the most comprehensive to date, reveals that Oregon will face deficits over the next ten years, rather than the surpluses projected before the recession, if state government continues to try to sustain the type and scope of services it now provides.

By Bill Conerly,
Conerly Consulting, Businomics,

In the latest issue of the Businomics(r) Newsletter, I displayed this chart, which shows that consumer spending has fully regained the pre-recession peak:

By Patrick Emerson
Oregon Economics Blog

As the OPB latest fund-drive comes to a tortured end – ‘just a little more time because we need just a little more money!’ – it seems like a good moment to learn about what economists have learned about charitable giving…You can travel the country and pretty much every public radio station you’ll hear sticks to the same pledge drive script – which makes sense, with so much experience, public radio must have figured out exactly what works and has fine-tuned it to a precise science.

Turns out that there are some things fundraisers have learned that are a bit contrary to what standard economic theory would predict.  Take matching gifts for example: people respond to them but it doesn’t matter if they are one-for-one or more than that – they give the same extra amount either way.  Economic theory would predict that when you increase the marginal benefit of an action we should do more and that this effect should be monotonic – ever increasing.

PNW Auto ordered to pay the maximum fine under Oregon’s Unlawful Trade Practices Act
By Oregon Attorney General,

Attorney General John Kroger today announced that a judge has ordered a Tigard auto dealership to pay $650,000 in fines for deceiving consumers about the damage history of vehicles for sale.  “This sends an important message that there is a steep penalty for violating consumer protection laws in Oregon,” said Attorney General Kroger.   The case involved Matt and Anousone Marlin. Matt Marlin lost his dealership license to operate Marlin Motorworks after admitting that he forged title documents in order to deceive consumers about the damage history of “totaled” vehicles.   In the weeks following the effective date of the suspension, Marlin created PNW Auto, LLC, in the name of his wife, Anousone.  The misconduct continued under the new dealership, with clear violations of Internet advertising rules on motorcycle sales. Some of the motorcycles advertised on Craig’s List as “never crashed” were actually “totaled.”

Oregon Bankers Association Offers Tips for Consumers on New Overdraft Rules New Bank Regulation Requiring Opt]in to Overdraft Protection Goes into Effect
Oregon Bankers Association,

Oregonians and Oregon merchants need to be aware of a new federal rule that could lead to a significant increase in debit card transactions being denied at the point of sale. Compliance with this rule is required of all banks. On July 1, 2010, the new Federal Reserve Board Regulation E rule goes into effect, requiring consumers to opt]in to their financial institution’s overdraft protection service for ATM and onetime debit card transactions before overdraft fees may be assessed on the account. This means that financial institutions will be forced to either cease to assume the risk involved in covering overdrafts or, more commonly, offer consumers coverage if they opt]in for the service.

Failure to opt]in to a program means that consumers attempting to make a purchase with a debit card could have their transaction denied at the point of sale, instead of covered by their financial institution, if they have insufficient funds in their account. Overdraft protection programs offered today by financial institutions provide consumers with protection against denied transactions.

It’s the longest recession in the modern era for both the U.S. and Oregon. After a major decline in 2008 and 2009, Gross Domestic Product (GDP) resumed growth in the last two quarters of 2009. GDP is the measure of the value of all goods and services produced in the U.S. Conventional wisdom holds that two quarters of GDP growth indicates the end of the recession. While the National Bureau of Economic Research has yet to proclaim the recession officially over, major sectors of the economy seem to be stabilizing after two years of decline.

It’s tempting to proclaim the recession over. But economic recovery is a complex process. Some industries grow faster while other industries may fail to recover at all. The recovery may be strong and sustained or weak and short lived. As certain industries grow, or fail to grow, we’ll see indicators about the shape of the new Oregon economy born out of the worst recession in more than a generation.

Nearly One-Third of Employers Are Concerned About Top Talent Leaving Their Organizations, Finds New CareerBuilder Survey
– Employers Share How They Plan to Hold on to Workers, Reduce Turnover

Career Buidlers – As the recession eases and companies begin to add to strained staffs, employers are also taking action to retain existing top talent at their organizations. According to a new CareerBuilder survey, nearly one-third (32 percent) of employers are concerned about losing their high performing workers in the second quarter, while one-third (33 percent) of workers said it is likely they will start looking for a new job when the economy picks up. As a result, employers are turning to a variety of different retention strategies to hold onto those workers and their valuable intellectual capital. The survey was conducted between February 10 and March 2, 2010 among more than 2,700 employers and 4,800 workers.  Increased workloads, longer hours and fewer resources related to the recession may be contributing to higher job dissatisfaction. Looking at key factors that influence job satisfaction and company loyalty, workers reported the following:

Pay - Nearly one-third (32 percent) of workers said they are dissatisfied with their pay, up from 29 percent during the same period last year.
Work/life balance - Nearly one-quarter (22 percent) of workers said they are dissatisfied or very dissatisfied with their work/life balance, up from 20 percent last year.

Career progress – Twenty-seven percent of workers are dissatisfied with the career advancement opportunities provided by their current employers, up from 24 percent last year.
Of workers who have their sights set on making a career move, they shared the attributes they will be primarily looking for in a new employer in addition to competitive pay and benefits. Good career advancement opportunities (60 percent) and good work culture (57 percent) topped the list. These were followed by:

by Dennis Westlind
Stoel Rives LLP, Attorneys at Law

Last week a federal judge dismissed a lawsuit aimed at blocking SB 519, the Oregon law the prohibits employers from requiring employees to attend meeting about, among other things, labor unions.  Click here to read the District of Oregon’s opinion in Associated Oregon Industries v. Avakian.

SB 519, passed by the Oregon legislature in 2009, prohibits employers from disciplining or threatening to discipline employees who refuse to attend mandatory or “captive audience” meetings on religious or political matters, including the employer’s views on labor unions.  SB 519 also requires employers to post a notice informing employees of their rights under the law, which you can download here. 

Oregon BOLI Proposes Regulations on Credit Check Law
By Michael Porter, Kathryn L. Kammer
Miller Nash LLP, Oregon law firm

Oregon now bars most employers from using credit histories in making employment decisions. In the February 2010 special session, the Oregon legislature passed Senate Bill 1045, generally prohibiting employers from considering an individual’s credit history when making any employment decisions, such as hiring, promotion, compensation, and termination. The law became effective upon passage, and will be added to ORS Chapter 659A. The full language of the new law can be found HERE.

AOI Board Opposes Premature 2014 Forced Shutdown of PGE Boardman Power Plant
By John Ledger
Associated Oregon Industries

Supports the most cost effective means of achieving compliance with regulatory requirements.

The AOI Board of Directors, at its April 29, 2010 meeting, went on record in opposition to costly and premature closure of the Boardman generating facility, supporting instead an approach enabling PGE to provide reliable and cost-effective energy to Oregon companies and consumers until at least 2020. The board also approved AOI intervening with agencies on behalf of the business community. The need for reliable and competitive energy costs were cited as critical for economic recovery, long-term growth, and job creation.

José Pinomesa, Chairman
Oregon Independent Auto Dealers Association

April was a great month for auto manufactures and dealers since overall sales were up 20 percent on average according to Automotive News.  That is great to hear since auto manufacturers and auto dealers have taken a huge hit during this entire recession.  The tide is turning and new car and truck sales are doing really well compared to this same time last year.

Some of the biggest gainers were Subaru 48%, Nissan 34%, Ford 25% and Chrysler 25%.  People have held out long enough and with the slightest improvement in home sales and the stock market it gives Americans the assurance that this is the time to purchase that new vehicle once again.