The Oregon Biz Report - Business News from Oregon

Shopping Wars Intensify for Holiday Season
By Oregon Small Business Association,

Intensifying the upcoming holiday shopping season is the recent slide in back-to-school sales  and the challenge of a tough economic climate.   As a result, more retailers are starting to aggressively ramp up their efforts earlier to expand their image on the retail scene.   The new battleground is the shopping mall as two giant firms are buying hundreds of spaces for a seasonal campaign.

Costco Wholesale Corp. recently announced that they are taking steps to add their stores to shopping malls, offering a “mini-mall” option to shoppers. The reversal of Costco’s traditional approach, which has been to expand to “off-mall sites” comes at a time when a number of malls are struggling due to the recession and losing their anchor stores, their largest tenants. With malls looking for alternatives, Costco is aggressively pursuing an expansion into spaces once occupied my department stores. With an average store sales of more than $100 million a year, Costco has the potential to help attract new shoppers to traditional malls. One challenge for Costco may be the lack of space, as older and new stores typically range from 143,000 to 205,000 square feet.

Minimum wage will increase in 2011 despite overall decrease in state CPI
By  J.L. Wilson
Associated Oregon industries,

Oregon employers will find themselves disadvantaged once again in 2011 by Oregon’s minimum wage law that increases the state minimum wage based on increases in the state Consumer Price Index (CPI). Oregon’s CPI is actually lower than 2008 levels – yet Oregon employers will face a .10 cent/hour hike in the minimum wage to $8.50 per hour.

How is this happening?

Treasurer Wheeler says General Fund debt capacity reduced as a result of recession, urges caution
– Oregon’s strong credit rating has been maintained because of fiscal discipline, Treasurer says

SALEM – The global recession is hurting the state’s General Fund debt capacity, and State Treasurer Ted Wheeler has recommended a temporary halt to future General Fund-backed public borrowing until the financial situation improves. In a special meeting Thursday of the State Debt Policy Advisory Commission, the five-member panel reviewed the latest figures related to General Fund-backed debt and unanimously endorsed the Treasurer’s recommendation.

In addition, the commission also agreed to ask the Department of Administrative Services to reconsider the timing of certain new bond-financed projects that have already been authorized but for which bonds have not yet been sold.

$107M flap caused by one of the state’s highest paid
By Oregon Tax News,

State radio network is 22% over budget

Plans to build a statewide emergency radio network are running late and $107 million over budget, according to internal state audits and reports. The documents indicate that mismanagement, missed deadlines and hidden costs have pushed up the price tag to $592 million well beyond the $485 million that state officials were citing only a few months ago, The Oregonian reported Wednesday.

Director in charge of project was one of state’s highest paid employees received a 23% raise in 2007

U.S. Chamber Urges Supreme Court to Review Largest Employment Class Action in History
– Unless the High Court Steps In, the West Coast will Become Haven for Bet-the-Business Class Actions, Chamber Argues
By US Chamber of Commerce,

WASHINGTON, D.C.—The U.S. Chamber of Commerce today filed an amicus brief urging the Supreme Court to review the Ninth Circuit’s erroneous decision to certify the largest employment class action in history. The case is Wal-Mart Stores, Inc. v. Dukes.

“This is the most important class action case facing the Court in over a decade,” said Robin Conrad, executive vice president of the National Chamber Litigation Center, the Chamber’s public policy law firm. “The Ninth Circuit radically lowered the standards for certifying blockbuster class actions. Unless the Court steps in to undo the mess created by the Ninth Circuit, the West Coast will become a haven for bet-the-business class actions.”

Amy Vander Vliet
By Oregon Employment Department

The national economic slowdown has impacted Oregon. While the recovery plods on, it is turning out to be one of the slowest on record according to the latest quarterly forecast (September 2010) from the state Office of Economic Analysis (OEA). The second quarter marked the second consecutive quarter of job growth in the state, but at an anemic pace of just 0.5 percent – or less, if one discounts the temporary hiring of Census workers last spring.

NW law firm FCC Commissioner Baker Suggests No Government Support for Media, But Possible Relaxation of Broadcast Ownership Rules
By David Oxenford
Davis, Wright, Tremaine LLP

FCC Commissioner Meredith Atwell Baker recently delivered a speech in Washington, DC, where she addressed calls for the government to take action to assist the traditional media deal with the economic issues brought about by the new media.  From time to time, there have been calls for the government to assist the traditional media, either through some sort of direct subsidies, or through regulatory changes that could assist in their news coverage to make these entities competitive in the new media world.  While the Commissioner’s speech did not detail those efforts, calls have, for the most part, not suggested direct government subsidies to support traditional news media sources.

Are You Ready for a New Window Sticker with a Letter Grade?
José Pinomesa, Chairman
Oregon Independent Auto Dealers Association

A window sticker provides a lot of information for consumers who are shopping for a brand new car or truck.  It provides a listing of the standard equipment plus any added options with the final MSRP (Manufacturer’s Suggested Retail Price) including delivery charges.  It also provides information on EPA (Environmental Protection Agency) fuel economy estimates plus government safety ratings from NHTSA (National Highway Traffic Safety Administration).  Overall it is information that you would want to know before you made a decision to purchase a particular vehicle.

Let’s say you look at a window sticker and notice a grade of A, B, C or D.  Would you begin to loose interest if it was a B, C or D?

Oregon, Washington and Virginia Eye Liquor Reform
By Oregon Tax News,

In November, Washington voters will have the opportunity to vote on two initiatives regarding the privatization of liquor stores and revising laws concerning regulation, taxation and government revenues from the distribution and sale of spirits.  If passed, Initiatives 1100 and 1105 will close state liquor stores and authorize private parties to sell and distribute liquor.  Although the initiatives will maintain the liquor excise tax, liquor profits will go to private retailers.  In addition, Initiative 1100 will eliminate beer and wine price controls and bans against volume discounts.  Beer and wine retailers will also become eligible to add a liquor license and will have the opportunity to buy liquor directly from manufacturers.

The Recession Was Over! (June of Last Year)
By Bill Conerly,
Conerly Consulting, Businomics

That nasty old recession is finally over. Turned out it was over June 2009. But now we know it officially. The arbiter of business cycles is a committee at the non-governmental National Bureau of Economic Research, which announced the decision today.

Their key statement was:

The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date.

So, they are not saying that things are great now, or that the outlook is rosy. Simply that if things turn down now, it’s a new recession rather than a continuation of the old recession.

For the record, I explained the background on the NBER approach in an older post about the beginning of the recession.

The committee looks at a number of indicators, including the classic four coincident indicators:

By Business Cycle Dating Committee,
National Bureau of Economic Research

CAMBRIDGE September 20, 2010 – The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

By Patrick Emerson
Oregon Economics Blog

Chris Dudley, Republican candidate for Governor, presented his 20-point plan for promoting employment and the Oregon economy. [Funny how these things always miraculously come out to nice round numbers - why not a 19 or 23 point plan?]  Anyway, the key points appear to be decreasing taxes and in particular capital gains taxes, (many of the other points are bromides rather then specific proposals).  This makes sense politically, after the passage of Measures 66 & 67 taxes are an obvious focal point for Republicans.  But do they make sense economically?  Perhaps.

When I first heard the news reports on the plan the sound bite they chose to play was of Dudley trying to make the point that the tax cuts would likely pay for themselves in terms of extra revenue.  To me this sounded like the tired Laffer curve argument that has been discredited for marginal income tax rates as low as we have in the US.

Majority of retail CFOs doubt double dip speculation, according to BDO USA LLP study amid a sluggish consumer confidence forecast, unemployment to blame
By BDO USA, LLP

Chicago, IL – According to a recent study by BDO USA, LLP, one of the nation’s leading accounting and consulting organizations, 82 percent of chief financial officers at leading U.S. retailers anticipate a continuation of stagnant economic conditions as opposed to a double dip (9%) or an ongoing turnaround (9%). The majority (78%) of retail CFOs cite an ongoing economic turnaround as most dependent upon lower unemployment or consistent improvement in consumer confidence and spending. In contrast, less than one quarter of respondents cite either a rebound in the housing market (10%) or continued rebound in the U.S. and global financial markets (9%) as contingencies for an economic turnaround. Only two respondents believe the success of the Financial Reform Bill will influence an ongoing turnaround.

Unemployment seems to be the linchpin to retailers’ recovery; seventy-six percent cite it as the economic issue having the greatest impact on consumer confidence for the balance of 2010 (a jump from 64% in 2009). The impact of personal credit availability and debt levels (14%), the weak housing market (4%) and market volatility (4%) are also playing a role.

By Jennifer by Paauwe-Riffe,
SPHR, Senior Human Resources Consultant,
AmeriBen / IEC Group

Considering or determining a termination of employment can be an emotional experience. By taking a proactive approach you can ensure the separation experience maintains the employees’ respect and dignity while reducing potential liability. Reasons for termination include unsatisfactory performance, organizational change and misconduct.  When faced with unsatisfactory performance the progressive discipline process is meant to provide an avenue to correct performance and behaviors that impede work flow. Many times, a manager or supervisor can be at the end of their rope with an employee who either is unwilling or unable to meet performance standards.

Although the “At Will” doctrine provides the opportunity for employers and employees alike to terminate the employment relationship at any time, for any reason, ensuring that your termination practices have a methodical approach can be the “life line” when managing all of the legal ramifications and potential for liability.

The primary laws to consider when faced with potential terminations are Title VII, the Pregnancy Discrimination Act, Americans with Disabilities Act, the Age Discrimination in Employment Act, the Uniformed Services Employment and Reemployment Rights Act, and the Family and Medical Leave Act.

News Note: As Portland is becoming the first Oregon town to push a plastic bag ban, California has been rejecting a ban on the state wide level on the concern of the damage it has for local businesses.

For third straight year, California legislature rejects plastic bag ban
By Mike Verespej
Plastic News

SACRAMENTO, CALIF. – For the third straight year, the effort to ban or tax plastic carryout bags in California has failed. The California Senate late Aug. 31 rejected AB 1998, which would have banned the use of plastic bags starting in 2012 at large grocery stores. The 20-14 no vote was seven votes short of what was needed to pass the measure, which had been approved by the state Assembly in June.

“We’re thankful the California legislature looked at it and decided to protect the jobs of workers,” said Keith Christman, managing director for plastics markets for the American Chemistry Council, which had argued that the proposed ban threatened 1,000 manufacturing jobs in California.

By Oregon Small Business Association,

There are a lot of good things happening in Oregon, but recently we have been making news for all the wrong reasons. Forbes Magazine ran an article on capital gains state tax rates and the chart featured Oregon as having the highest capital gains tax rate in the nation. Such articles act as negative advertising to businesses considering moving to our state.    It also shows what many expanding businesses see when they compare tax rates between states.   Being #1 stands out and works against our economic interest.   As long as Oregon is among the top the negative articles and comparisons will continue to cycle painful news about our state.

Monitoring Employee Internet Use—Where to Draw the Line With Privacy
By National Federation of Independent Business

We’ve all done it. We start reading a website during lunch and before we know it, it’s 2 p.m.—a good part of the workday has been spent on the Internet.  Even the boss gets carried away from time to time, says Lewis Maltby, president of the National Workrights Institute in Princeton, N.J. That’s why it’s a good idea to be reasonable when monitoring your employee’s Internet use at work.

Here are five things you should know about employees’ rights when monitoring their time online.

By Patrick Emerson
Oregon Economics Blog

The family decided to spend Labor Day at PGE Park attending the latest of the Beavers farewell season closers.  Absolutely picture perfect weather and an entertaining game: it was great.  For the first time in recent memory, the crowd was actually paying attention to the game and it was a very entertaining one as well: lots of lead changes and home runs an even a nail-biting finish.  It was a great day.

The Oregonian has been a bit overwrought about the Beavers leaving – too much so I feel.  Editorials about how it is a failure of leadership by the city government, a column by John Canzano (who hardly ever even bothers to mention the Beavers in his column), ever the opportunist, calling out Sam Adams, and a long series of farewell pieces all graces the pages recently.

U.S. Chamber Offers Voters Five Questions for Candidates about Job Creation
– With a Series of Events, Ads, and Studies, Campaign for Free Enterprise Hits High Gear Ahead of Elections
By U.S. Chamber of Commerce

WASHINGTON, D.C.—Building on the momentum of July’s Jobs for America: Summit 2010 and leading up to Election Day, the U.S. Chamber of Commerce’s Campaign for Free Enterprise is embarking on a two-month nationwide push through state and local chambers, an online ad campaign, and a series of policy, gubernatorial, and youth events that urges Americans to ask five questions of their political candidates about the free enterprise system and job creation.