NCPA - National Center for Policy Analysis


June 19, 2009

In 2006, Bend, Ore., was one of the fastest-growing places in the West and money and migration from California fueled that growth.  Now the Bend area's unemployment rate, at almost 16 percent, is one of the highest of any metropolitan area in the nation.  The freefall has made Bend a succinct symbol for the economic perils of "lifestyle destinations" in the so-called New West, recreation-heavy communities where jobs have been heavily tilted toward construction and services and where many of the new residents were self-made exiles from California cashing in on their overpriced real estate, says the New York Times. 

Bend, a former timber town that now has 80,000 residents, was particularly popular among those drawn to the often rainy Northwest because it is located on the sunny side of the Cascade Range.  Now the Californians who contributed to Oregon's growth are in some cases adding to its economic struggle, says the Times:

  • As of May, Oregon had the second-highest unemployment rate in the nation, at 12.4 percent, behind Michigan.
  • California, which has not released its May figures, ranked fifth in April.
  • While some other states with high unemployment, including Michigan, have seen their labor forces shrink, Oregon's labor force has grown.
  • Economists say some of the growth appears to be driven by people who moved here with money they made in California, whether from real estate or stock market investments, and expected to get by but now must look for work.

Not all of the newcomers are from California, of course, says the Times.  Lost equity, lost jobs and the possibility of foreclosure also threaten people who moved here from just across the Cascade Range, on the wetter western side of Oregon, as well as some from Seattle or the East. 

Still, just as other places in the West have blamed California transplants for treading heavily into town, the words "California equity" roll off many tongues here in Deschutes County with particular resentment these days, says the Times:

  • Carolyn Eagan, a regional economist for the Oregon Employment Department, pointed to federal data showing that the overall percentage of personal income from dividends, investments and rental income in Deschutes County was almost 26 percent in 2007, the latest year for which data were available.
  • Compared with an overall state rate of slightly less than 21 percent, the figures suggest that people here, more than elsewhere, have relied on income from sources other than a steady job.

Source: William Yardley, "Slump Dashes Oregon Dreams of Californians," New York Times, June 18, 2009.

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