The people of Ontario, Oregon are worried. Businesses are leaving Oregon to settle right over the river on the Idaho side. Jobs are becoming harder to find as the Idaho side grows and thrives.
THE ECONOMIC REALITY
Kit Kamo is the executive director of the Snake River Economic Development Alliance. She tries to bring businesses to both sides of the border. She recently took us on a tour of the Oregon side and the Idaho side of the river.
In Ontario, she pointed out retail shops like Harbor Freight, Walmart, Home Depot and Starbucks.
In Fruitland, ID, right over the river, she pointed out a bank, doctors’ offices, an assisted living facility, a Coca-Cola plant, and a number of new housing subdivisions with large lots.
That contrast illuminates a simple economic rule on the Oregon-Idaho border: If you’re a retail business looking to woo customers, there’s no better location than Ontario, Oregon. That’s because it sits just over the border from a state where there’s a 6 percent sales tax.
But for most other industries, Idaho is a far more attractive option. As of this summer the minimum wage will be $2.75 less an hour than in Oregon. And that gap is going to only widen over the next few years.
Idaho also has much less strict state land use regulations, which makes it easier to get your business off the ground without wading through stacks of paperwork.
“Retail’s great,” Kamo told us, “but a lot of the jobs are part-time, so people that work in retail a lot of times work are two or three different jobs,” and often are underemployed.
That puts Malheur County — where Ontario is located — in a strange economic situation. Its unemployment rate of 3.6 percent is better than almost any other rural Oregon county, but over a quarter of the county lives in poverty — worse than any other county in the state.
This stark difference between the struggling Oregon and the thriving Idaho side of the Snake River is apparent to everyone living here, and it’s also apparent to lawmakers.
Cliff Bentz represents the region in the Oregon legislature. He invited the Speaker of the House, Tina Kotek, to visit the area and see the contrast for herself. After she got back, she introduced House Bill 2012, which attempts to address some of the issues in the area by setting up an economic development board and giving them the power to disperse $10 million dollars to help ignite the local economy.
For eastern Oregon farmers like Shay Myers, general manager of Owyhee Produce in the small town of Nyssa, the destructive winter forced his decision about whether to relocate to Idaho. The business lost four buildings when their roofs collapsed under several feet of snow.
Oregon’s minimum wage increase and paid sick leave laws added costs to his business, which he says operates on an already thin profit margin. Had it not been for the roof collapses, they might still have made the move from Nyssa to Idaho. But it probably would have been four or five years down the road.
“We had already been headed down that path,” Myers said. “This just very quickly made the decision for us.”
And with the possibility of another bill that would regulate worker scheduling on the horizon this session, Myers felt that Oregon regulations were just becoming too costly.
“When you add that much more to the labor costs you’re unable to compete with either your neighbor states or with the imports coming from other countries,” Myers said.
He’s not exactly happy to relocate his business across the border. He’s a third-generation farmer and he grew up in Nyssa. And he felt bad about the prospect of moving until he spoke in front of the legislature about the minimum wage increase last year.
“I testified and really pled and poured my heart out about what the net result was going to be, and for the most part was ignored,” Myers said.
Myers says there’s much in farming you can’t control, like weather or insects.
“We don’t control what the minimum wage is, we don’t control what the workforce is, we don’t control what the consumer demands are either,” he said.
But one thing Myers and other farmers can control is the location of their business. The Owyhee Produce packing sheds will be up and running in Idaho by this fall.
THE RETAIL PERSPECTIVE
John Kirby was born in Ontario, and other than a stint at Portland State University, he has lived here his entire life.
“I have seen Ontario during its most robust days, and we do not measure up to those days at all now,” he told us.
“Retail has been our major industry, other than agriculture,” he said. But the retail picture has changed. It used to be a lot of independent stores. Now its big box franchises.
That puts pressure on his store, which is compounded by lawmakers in Salem passing policies that he thinks are a poor fit for this region.
For instance, when Oregon recently increased its minimum wage, Kirby felt it was a blow to the only part of Ontario’s economy that is thriving. He couldn’t take the hit to his bottom line, so he had to reduce his contribution to his employees’ health care plans.
But for Ontario to really be successful, it has to diversify its economy to look more like Idaho. It’s two economic mainstays aren’t going to cut it.
“You look at retail, which is low paying, and you look at agriculture, which is low paying, there’s no balance to the economy. And so, we’ve got to get some production jobs in this end of the state.”
LAND USE ISSUES
Lynn Findley’s daughter was voted “Most likely to leave town,” in her high school yearbook.
“And she did,” he told us, “After she graduated from high school, she went to college and never came back, other than for visits. There’s no opportunities in the local area for her skills.”
Findley is the city manager of Vale, a town about 15 miles west of Ontario. He wants to change that common narrative.
“One of the goals I set when I took this job was to make an opportunity for kids to grow up here, get a job, and stay here.”
The city manager is in charge of zoning, and Findley says zoning issues are one of the problems this region faces in trying to attract new industry.
Oregon’s land use laws were established by Senate Bill 100 in the early seventies, and they are considered some of the strictest land use laws in the country. They require every city and county to create comprehensive plans that meet detailed standards that try to prevent sprawl.
The bill was passed with the intent to protect Willamette Valley farmland from suburban creep, and a lot of people in Eastern Oregon, including Findley, say the severity of the law doesn’t make sense for the rural, underpopulated areas of the state.
“There’s 10 million acres of ground in Malheur County. There’s vast swaths of ground, so if you take 100 acres out and put it in a development, we have lots of other ground you can replace that with.”
Changing a comprehensive plan takes many years, and often tens of thousands of dollars in legal and consulting fees, which often means that towns just don’t do it.
“Five years ago, when I got this job, the city had zero available industrial acres for development.”
He set about trying to do it, which took two years.
“And we now have available ground, and we have actually businesses and industry talking about purchasing those properties and developing it, therefore creating jobs for our use.
But Findley says companies don’t want to wait around for Oregon cities to go through that process when Idaho has much looser land use laws.
“It’s hard for us to compete with companies who say ‘I now have ‘x’ dollars to grow, we want to expand our market share and our ability, and I can do it here in three months and I can do it in Oregon, in Malheur County in two years.”
House Bill 2012, in addition to freeing up some funds for economic stimulus, could offer short cuts for the land use process in the area, specifically if companies are thinking about settling in Idaho.
Despite this, the bill managed to gain the support of 1000 Friends of Oregon, a non-profit that defends the state’s land use laws, which has voiced support for HB 2012.
FARMING IN A GLOBAL MARKET
Dirk DeBoer is a shallots farmer in Nyssa and he’s worried about Malheur County agriculture staying competitive.
“We’re in the world economy, and this is something that we don’t always recognize,” he said in an interview on his farm in Nyssa, a town about 10 miles south of Ontario.
He offers an example of a buyer on the East Coast looking to buy onions — a major crop around Ontario.
“If we pay $5000, for example, on transportation to bring them to the east coast, but they can buy onions from Peru with a freight cost of $2200,” the buyer will go with Peru.
Despite the fact that Peru is further from New York than Ontario, it is often a cheaper route for produce. That’s because ocean freight can carry thousands of containers with a very small staff.
Most of Ontario’s onions, on the other hand, get shipped by truck. Shipping just one container on a truck requires one driver, so labor and fuel costs are much higher.
DeBoer and other farmers around the area have what they think is a good solution for this problem — something called a transload facility. It would be a place where farmers could bring their crops in containers, that could then be loaded onto a train — a much cheaper way to move their product. Right now, farmers in Ontario don’t have a good train option.
“You can move 200 containers on a train,” said DeBoer. “That’s where the economics come in. It’s not even close to what a ship is, but it is on the way.”
Some Malheur County residents hope that the $10 million proposed in HB 2012 could be used to research and possibly fund a transload facility.
A SHIFT IN EDUCATION
Lacey Fetter is a junior in high school, but she’s not in a classroom this Wednesday morning. She’s at Saint Alphonsus Medical Center, doing clinical work.
She’s a student in a Certified Nursing Assistant program offered through her high school and local Treasure Valley Community College.
She explained the assistance a CNA can offer a patient.
“You wake up, you go to the bathroom, you do everything you need to do in there, you comb your hair. There are some people that are no longer able to do that alone and they need the assistance of someone like us.”
“This program has honestly changed me in a lot of ways,” says Fetter. “I used to be a really really bad student, really procrastinated, kind of gave my teachers guff, you know? And after joining this program and even just talking to my residents and my patients, and learning what they’ve gone through, it’s really humbled me down and it’s opened my eyes to a lot of things that I really never thought of before I started this program.”
Many of the students could have jobs waiting for them at St. Alphonsus when they’re done. That’s part of the reason why the program exists, according to Ken Hart, president of Saint Alphonsus Medical Center in Ontario.
Hart says it’s difficult for the hospital to find qualified talent in the local area, and equally hard to convince outsiders to move to this rural area.
That leaves him with the question, “How do we grow our own technicians, nurses, doctors of the future from people who are in the community.
In addition to the CNA program, Ontario has a welding program and an automated systems program. The idea is that students in those programs could find work in agriculture or manufacturing in the region.
Right now, most of this is grant-funded, but Hart hopes that some of the money from HB 2012 could help support Ontario’s career and tech ed efforts
THE DECISION IN SALEM
Speaker of the House Tina Kotek, who represents a heavily democratic district in Portland, and Representative Cliff Bentz, who represents conservative Malheur County, are the two sponsors of House Bill 2012. Kotek says she decided to visit Ontario after a number of people from the area came to Salem to testify after the minimum wage law passed last year.
“That’s a long distance for people to travel, so I got to thinking that, sometimes it’s nice if we actually go to where the people are.”
After visiting both sides of the border, she came away with the conclusion that “if we want people on the southeast border of our state to be successful, they have to be competitive with Idaho.”
She says of the bill supports “community-driven solutions,” and gives the district a way to appeal to the state to lessen the burden of regulations, “and if some of those are land use-related, I think it’s up to the state to take those very seriously.”
Bentz voted against the minimum wage law in 2016, even after the tiered system was adopted. But he sees this bill as a way to lessen the blow from that law.
“It recognizes that if we’re going to have these higher standards,” he said, “then there has to be an investment that will attract the type of jobs that pay wages that reflect the ability to meet those higher standards.”
Kotek, for her part, doesn’t regret the minimum wage bill, even after seeing Ontario.
“As an Oregonian, people should be making a little more at minimum wage jobs,” she said. What she likes about the bill is it keeps the wage hike, but focuses on other areas that could help the economy.
“It’s about trained workforce, it’s about housing supply, it’s about infrastructure like a transload facility,” she said.
As to why his district deserves the $10 million influx of funds over other struggling Oregon counties, Bentz says, “I hate to compare poverty levels, but I pretty much put my county up against anybody else, which is really sad … when it comes to need, it’s hard to beat Malheur County.”