I'm not at all surprised about Bend crashing; much of the expansion was built on tourism and rich jerks looking to build their own colony of California in the Oregon high desert.By WILLIAM YARDLEY
Published: June 17, 2009
BEND, Ore. — Susan and Mike Telford had a plan back in the boom years in California. They would sell their house outside Fresno at a solid profit and take their equity to this sunny mountain city to build a better life, a fresh-air future in Oregon.
“We wanted to lose the commute, to lose the smog,” Mrs. Telford said. “We wanted to lose California.”
They moved here in 2006, when Bend 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. “For sale” signs dot desert-toned, unfinished subdivisions. Luxury furniture stores downtown are going out of business. San Francisco chefs have fled.
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. 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. 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.
“It’s just so depressing to hear them because they thought they had life handled and they don’t,” said Bobbie Faust, an employment counselor who works for the state in Bend.
The Telfords are among those facing trouble. They had presumed they would be able to sell their house in Fresno for more than $300,000 to help pay the mortgage on the new house they bought near the Deschutes River in Bend for $475,000. But the Fresno house has yet to sell, and Mrs. Telford, an accountant, has lost a series of jobs at small firms here that she said had downsized. The couple’s only income now comes from her unemployment checks and her husband’s salary as a high school teacher.
“The cash flow is negative,” Mrs. Telford said. “This will be the first time we’ve had to go into savings.”
Not all of the newcomers are from California, of course. 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. Measuring California’s economic impact on Oregon and its struggles is difficult, and economists say that Oregon, which has less than a tenth of the population of California, has not always been directly affected by its neighbor’s fortunes.
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.
“California immigrants can never win in Oregon,” said Philip J. Romero, an economist who has advised governors in both states. “In a boom, ‘They are crowding the roads and bidding up house prices.’ In a bust, it’s: ‘They alone caused the price of my house to drop by hundreds of thousands of dollars. They came up here without a job, and now we can’t absorb them and they’re competing for my job.’ ”
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.
“Shhh,” Biff Ingels, a transplant of four years, standing outside the main job counseling center here, said when asked where he had lived before. “California,” he said in a whisper.
A cultural shift appears to be under way. One of Bend’s leading restaurants had been Merenda, whose chef, Jody Denton, came from San Francisco in 2002. Under mounting debt, Mr. Denton closed the restaurant in January and left for a job in Australia. Several people involved with the restaurant before it closed have reopened it under a new name, 900 Wall, its street address. The menu has been recast from mostly French and Italian cuisine so that it now incorporates more ingredients from the Northwest and has slightly more approachable pricing.
“We’re trying to present ourselves as a local restaurant,” said Cliff Eslinger, the executive chef. “We’d relied far too heavily on outside forces.”
Another casualty was Bend Living, a glossy regional magazine driven by advertisements for high-end homes and luxury furniture. Kevin Max, the magazine’s former editor, is planning the first issue of a new magazine about Oregon culture and history, based in Bend and set to make its debut this summer. It is called “1859,” a reference to the year Oregon entered the union.
“Bend Living was about Bend’s emergence into 24-7, go-go-go, irresponsible construction and people living beyond their means,” Mr. Max said. “1859 is kind of National Geographic meets Condé Nast Traveler. It’s about Oregon, so it’s all about sustainability.”
Locally, sustainability is a challenge. Bend’s job market has not proved diverse enough or deep enough to provide jobs for the newcomers who suddenly need them. “Poverty with a view” is how many people describe Bend before the boom. Economists say the city’s sudden abundance of investment income and housing equity from newcomers made Bend seem more secure than it was. While experienced people like Mrs. Telford, the accountant from Fresno, struggle to find work, there are longer term questions over how the area will support its newest residents.
Zachary Lauritzen, a student teacher at Summit High School, on Bend’s west side — the side some residents call “Little California” — said he was teaching a lesson in government when the topic prompted him to ask how many students had lived in California.
“Half of them raised their hands,” Mr. Lauritzen said.
What worries me is the notion - albeit tentatively offered - that some considerable fraction of our unemployment stems from people who had previously lived off of their inflated investments, and we may yet see more people fleeing a failing State of California looking for work. As the article notes, we already have the second-highest unemployment rate in the US.
While we're talking about unemployment, here's a grim statistic from the Bureau of Labor Statistics:
Half of the American labor force between 16 and 24 was and is likely still unemployed.From April to July 2009, the number of employed youth 16 to 24 years old
increased by 1.6 million to 19.3 million, the Bureau of Labor Statistics of
the U.S. Department of Labor reported today. This year, however, the pro-
portion of young people who were employed in July was 51.4 percent, the
lowest July rate on record for the series, which began in 1948. (July is
the traditional summertime peak for youth employment.) Unemployment among
youth increased by 1.1 million between April and July 2009, about the same
as in the summer of 2008. (Because this analysis focuses on the seasonal
changes in youth employment and unemployment that occur every spring and
summer, the data are not seasonally adjusted.)
In the short term, this probably isn't such a big deal - so they don't have work for awhile, so they don't have money to fritter on useless shit: they'll survive. But how many of these people, leaving the school environment and entering adulthood, will fail again and again to find work and become accustomed to life without employment? How will this impact society? I don't know; that's what troubles me.
