Clackamas County Economic Development Caught in a Time Warp?

(This begins a series of articles on public actions on the economy and focuses first on the concept of industrial planning and job creation.)

Employee-owned Bob’s Red Mill

When Clackamas County Democratic Precinct Persons met last week to begin developing our county and state issue platform, one idea gaining surprising support was creation of publicly owned banks. This is not a new idea, but one whose time has come as we look to new ways for our community to thrive and prosper. And, no, it is not the same as credit unions, already a step in the right direction.

This notion is a good example of looking at old problems with a fresh perspective. In many ways, that is a good function of lay people with a broad interest in improving their own way of life but also the lives of those around them of all stripes and economic positions.

Consider: For a long time the thinking was that to create jobs in a county or a country was to simply create pro-business public policies. By not having burdensome taxes, strict public regulations, and strict labor law enforcement, companies would flock to your county or county, unemployment rates would fall and the community would prosper.

Various business associations funded studies to measure the business climate of cities, counties, states, and countries to help businesses find the best places to locate. This pro-business approach even became institutionalized in international financial organizations such as the World Bank and the International Monetary Fund.

Even now most local economic development programs, much current federal deregulation, and global austerity demands are still based on this model of how to ostensibly create jobs and promote economic growth.

Therein lies a big problem: it doesn’t work. In fact, there are no real world examples where it has been successful and an overwhelming number of examples where it fails.

For more than four decades, those states and counties with the highest job growth have been those with the highest taxes, the strictest regulations, and the higher wages. How can this be?

For starters, taxes provide services. Those places with the best schools, the best transportation systems, the communities with the highest quality of life are that way because of public investments.

Employers seeking to cut costs apparently prefer not to have to train their own workers, internalize their own costs of transportation, or bear the burden of private security police when their competitors are distributing these same costs to the public in the form of great schools, efficient transportation and a skilled workforce.

A Portland State University study released in the mid 1970s showed that Mississippi and Alabama had consistently received the best business climate scores while New York, Massachusetts, and California consistently had the worse scores. Yet for the prior decade the lowest wages and the highest unemployment rates were in the Southern states, not the North or West.

But there’s more.

Fast forward to 2016 where Mississippi and Alabama and a host of other low tax states continue to be top ten rated places for business while continuing to have the worst economic performance. But higher tax/higher wage states continue to be rated poorly by the pro-business folks when, in actuality, they are high economic performers.

Despite the outright failure of the pro-big business approach to deliver the desired social benefits, public policy continues to accept as gospel that what’s “good for business is good for the public.” This all began, as we know, with Alfred Sloan, the mastermind founder of General Motors.

Attend any Clackamas County Economic Development meeting and wait patiently for them to discuss how to strengthen unions, promote union apprenticeship, provide training or funding for the creation of cooperatives, or develop policy to reduce carbon pollution. And wait, and wait, and wait.

What you will hear about is the shortage of industrial zoned land, key industrial clusters and how to assist them to grow, and the concept of “location quotients” (don’t even get me started).

Go to a Board of County Commissioners meeting and listen to business representatives ask for fewer regulations and lower taxes while requesting better roads and more skilled workers. This approach is upside-down.

For Clackamas County citizens to thrive, we need to start by knocking down these issue silos.

We must have the economic development folks working more closely with the environmental protection staff. We need to redefine what a thriving Clackamas County economy and healthy communities here will look like in a carbon restricted world.

What role does forestry and the forest products industry play in terms of sequestering carbon and providing green building materials that store carbon instead of emitting it?

How do we create affordable housing for all while promoting economic development policies which target bringing in jobs (and job seekers) from outside Oregon while ignoring ways to support our own home grown businesses and workers. Increasing housing costs, for example, only become a problem when the cost of housing grows faster than wages.

Bob’s Red Mill in Milwaukie is now an employee-owned cooperative. It cannot be bought out by General Mills and moved to Texas or Taiwan. And founder Bob Moore’s self-driven and generous change in ownership prompts several questions along these lines:

  • Has anyone made connections between Bob’s and county agricultural growers?
  • While Clackamas County is poised to lead the nation in cross-laminated engineered wood products, is there any coordination between the county’s own forest management plan and potential producers of cross-laminated wood products?
  • Is our Economic Development Commission figuring out ways to fund worker-owned cross-laminated mills in the county?
  • Are they discussing with local architects how to design the next generation of cross-laminated buildings?
  • Are classes being created at Clackamas Community College to train carpenters to build with cross-laminated wood products?
  • Are they altering the county building codes to encourage cross-laminated buildings?

The answer to most of these questions is a pretty resounding “no.” To do so requires a completely different set of economic and business assumptions. These assumptions need to recognize that for public benefits to be obtained from private actions requires industrial planning. Not the other way around.

Oregon’s reputation as a national leader stems in large part from our land use planning laws. Our livability is a result of much of this innovative thinking. Maybe it’s time for Oregon to lead the nation again. This time it could be with leading edge industrial planning.