Oregon Business: Good & Bad of 2015

nfib-logoBy Oregon NFIB,

It’s no secret that regulations make it difficult for small businesses to stay afloat in Oregon. This year was far from an exception. More bad news than good seemed to flow out of Salem, from February’s extension of the clean-fuel standard to June’s approval of a mandatory paid sick leave.

With optimism that 2016 will provide a fresh start for struggling small businesses, we’ve compiled a list of the biggest victories and harshest downfalls for Oregon small employers in 2015 (and what they’ll mean going forward).

THE BAD: Above-average unemployment—and a lull in startup creation—despite job growth

Oregon gained nearly 56,000 jobs in the past year, but that didn’t stop the state’s unemployment rate from remaining above the national average. Jumping from 5.5 to 5.9 percent in July, Oregon’s rate remained above the countrywide average of 5.3 percent. One in 12 living in Curry, Grant and Crook counties faced joblessness this year, according to a recent state report.

Startups didn’t get off the ground this year the way they used to, either. The Office of Economic Analysis placed Oregon’s new-business development at an all-time low since the office started collecting the data in the 1970s. That’s grim news for a state where small businesses account for 57 percent of all jobs.

THE GOOD: State minimum wage won’t increase in 2016

For the first time in five years, Oregon’s minimum wage rate will stay the same in 2016. (Cue a collective sigh of relief.) The Consumer Price Index showed little inflation this year, meaning small business owners won’t have to struggle to foot the wage increases typically tied to inflation. Oregon still has the second-highest minimum wage in the country, however.

THE BAD: Mandatory paid sick leave for (mostly) everyone

Oregon became the fourth state in the country to mandate paid sick leave when legislators approved the new law in June. Starting January 1, businesses with 10 or more employees will have to pay for up to 40 hours of sick leave a year.

The regulation gives small employers some reprieve by exempting independent contractors. But “for small businesses that have a lot of minimum wage employees, by the time you add paid time off, there’s not enough markup for the goods they’re selling,” said Portland business owner Steve Ferree. Small business owners will certainly have to factor the new mandate into their finances for 2016.

THE BAD: Low carbon fuel standard became permanent

Senate Bill 324 turned a seven-year fuel standard into a permanent fixture of Oregon law when it passed early this year. Oregon’s low-carbon fuel standard requires oil and gas distributors to keep their carbon content low, which could increase fuel costs up to 20 cents per gallon by 2025.

“The standards called for in Senate Bill 324 are confusing, complex and conflicted,” said former NFIB Oregon State Director Jan Meekoms. “The resulting effects will slow business expansion and reduces jobs.”

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