Deschutes County's Economy: Nature, Equity and Growth | The Source Weekly - Bend, Oregon

Deschutes County's Economy: Nature, Equity and Growth

Monday, June 22, the Oregon House of Representatives passed legislation that would ban destination resorts in the Metolius Basin. It had already passed the Oregon

Monday, June 22, the Oregon House of Representatives passed legislation that would ban destination resorts in the Metolius Basin. It had already passed the Oregon Senate, and by the time you read this, Governor Kulongoski likely will have signed it. Opponents have branded supporters as, among other things, anti-growth. They're wrong. And their error stems in part from failing to see that the issue involves more than growth; it also involves equality, conservation and sustainability.

We three know enough economics and enough about Oregon and Deschutes County to know why they're wrong. Ward is a 4th-generation Oregonian, has a doctorate in economics, and just finished teaching a term of labor economics at the U of O. Whitelaw is a 13-year resident of Deschutes County and 40-plus-year resident of Oregon, also has a doctorate in economics, began teaching at the U of O in 1967, with classes focused on the economics of the Pacific Northwest, and in recent years on economic growth in Deschutes County. Kenny-will graduate soon in economics from the U of O, has fallen in love with Oregon, plans graduate school elsewhere, and sees himself returning to Oregon for many of the same reasons the other two of us are here.

In Table 1 (below) we show the quantitative foundation for our views.

Except in average pay, Deschutes County's growth outstripped that of Oregon's by large margins in population (54% to 20%), employment (63% to 30%), bachelor's degrees (98% to 45%) and graduate and professional degrees (125% to 49%). But in average pay, Deschutes County's growth has lagged that of the rest of the state (41% to 54%). If these numbers and percentages sketch the County's economic performance during the 1990s, what explains them?

To explain economic growth among states and counties, economists traditionally have pointed to such factors as deep-water ports, bustling, navigable rivers, massive transshipments across planes, trains, trucks and automobiles, and vigorous research universities spinning off undergrad and grad degrees as well as commercial ideas and ventures. This view emphasizes employers, industries and the costs of production and distribution. The bumper-sticker version of it goes, "Jobs first, people follow." It's a mantra heard too frequently in the chambers of the Deschutes County's policymakers. But Deschutes County has none of the factors on which this view rests. It has, for example, no big, research university. So what explains Table 1?

In recent years, economists have noticed a far different logic underlying the growth in many states and counties. This new bumper sticker reads, "People first, jobs follow." And the attributes of these people matter. That is, states and localities that have attracted skilled, educated, creative, and talented people-what economists call human capital-have prospered, while the other areas have struggled. In this new explanation of prosperous communities, an attitude of openness or an ability and willingness to experiment with new ideas strongly complements the high level of human capital. This is a great combination for an economy. It makes it so much easier to mobilize resources. And that is exactly what we expect entrepreneurs to do.

"Wait a minute," we can hear that pesky student in the front row saying. "I get the link in Table 1 connecting Deschutes County's rapid growth in college-educated folks prompting rapid growth in employment and population. But how has Deschutes County done so well in attracting all that human capital?" For over 20 years, urban and regional economists throughout the Pacific Northwest have explained the region's economic growth in considerable part by its reputation for providing residents with a high quality of life which stems in no small way from the forested mountains and snow-capped peaks, clean streams and lakes, spectacular scenery and boundless recreation on millions of acres of public land.

We can see that student still has a furrowed brow. We get a grudging, "Okay," quickly followed by, "But why the sluggish average pay?" In economics, that sluggish average pay, when accompanied by the rest of Table 1, means that the supply of labor increases faster than the demand for labor. Losing the jargon, it means the more attractive the location, the less pay it takes to attract non-residents and to dissuade residents from moving. Deschutes County's employers enjoy a discount on their wage bill. The County's employees get lower wages and salaries, compared to their counterparts elsewhere. But the County's residents-employed, underemployed, unemployed and even those disconnected from the labor market-receive a different paycheck, one not denominated in dollars, but in the benefits of those forested mountains, clean streams and other forms of-here's more economics jargon-natural capital.

What does this have to do with the Metolius Basin? The Metolius, like the Oregon Coast, is a special piece of Oregon natural capital. They are both perceived as natural icons. In 2007, then State Senator and now State Treasurer (and for the duration, Tumalo resident) Ben Westlund said, "The Metolius is not just a jewel in Jefferson County's crown-it's a treasure for us all-an Oregon treasure." Last year, Governor Kulongoski labeled the Metolius an "Area of Critical Concern" to Oregonians.

Westlund and Kulongoski seem to be channeling a famous, former Oregon governor. In 1913, while designating the Oregon Coast as a public highway, Oregon Governor Oswald West declared, "No local self interest should be permitted, through politics or otherwise, to destroy or even impair this great birthright of our people." We can hear another former Northwesterner, Woody Guthrie, singing his 1940 piece, This Land Is Your Land.

Though spread over nearly a century, the statements, sentiments and yes, song, of these four together address more than economic growth. These nascent economists combine a view of the proper distribution of economic benefits with such concepts as conservation and sustainability. Without apology, they express one of Oregon's salient and enduring norms, equality. Oregon's Coast is not Malibu. A few households or firms don't monopolize it. Everyone gets to enjoy it. And now Oregon's Governor, Senate and House have said the same about the Metolius for Oregonians today and generations of Oregonians tomorrow.

The views expressed by the authors are their own and not in any representative capacity those of ECONorthwest, its clients or its other employees or of the University of Oregon, its other employees or its students.


Deschutes County

Rest of Oregon






















 Education: Bachelors degree







 Education: Graduate & Professional degrees







Average Pay








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