Crook County's Economic Structure
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Special Report 1051 May 2004 Crook County’s Economic Structure: An Input-Output Analysis Crook County’s Economic Structure: An Input-Output Analysis 1 Bruce Sorte Department of Agricultural and Resource Economics Oregon State University “There was word in the Willamette Valley that the road was open across the mountains in 1866…So in the fall of 1867, the first attempt at settling Central Oregon, Crook County to be, was made…(by settlers from)…near Lebanon in Linn Co.” —Wanda Clark, 1981, The History of Crook County, Oregon Introduction Roads and people from west of the Cascades are still an important factor and increasingly affect Crook County’s economy. Economic and political relationships with metropolitan Oregon significantly impact all of nonmetropolitan (nonmetro) Oregon. Crook County is a good case study for rural Oregon since it is very representative of rural Oregon (Figure 1) and, to some extent, the nation, when considering many issues associated with the interactions of rural and urban economies. For almost 100 years (1892 to 1992), Crook County was a bellwether in presidential elections. Political scientists from throughout the nation attempted to explain why this little county, with its population of ranchers, small businesspeople, and workers at the Les Schwab Plant, so consistently reflected the national mood. My own view is that the county was isolated, that its people acquired a sense of fairness and common sense, that they followed national politics closely but not too closely, and when they made up their minds, they reflected a basic American point of view (Church, Foster 2000, T04). This report profiles the demographic and economic trends in Crook County, estimates the export base of the county, provides an overview of the Crook County Input-Output Model, uses a hypothetical economic shock to demonstrate how the Model can be used to estimate economic impacts, and suggests some areas that Crook County might consider as it works to increase the resilience of its economy. 1 The author appreciates Fred Obermiller’s and John Tanaka’s (OSU Agricultural and Resource Economics Department) reviews of and suggestions for this report. Population and Economic Trends Crook County is a nonmetropolitan county located on the high plateau of central Oregon (Figure 1). In the 2000 U.S. Census, 19,182 people lived within Crook County’s 2,979 square miles; hence the population density per square mile was approximately 6.5 people. The county contained one incorporated place—Prineville, with a population of 7,356 people (U.S. Census Bureau, 2002). Figure 1. Crook County, Oregon. Source: Smith, Gary W. 2001. Oregon Regional Economic Analysis Project Web page (http://www.pnreap.org/Oregon). Crook County, again like many nonmetro counties nationally, is a natural resource-based economy, which the county is trying to diversify so that it can more effectively adjust to the variations of a globalized marketplace. Its population is growing and diversifying, like many areas with significant natural capital and lifestyle opportunities. People are moving to and visiting Crook County to enjoy the environmental amenities. These changes are creating tensions, as expressed in a lighthearted way by a resident explaining the county’s lost bellwether status: “We got new people in the ’90s,” she says with a smile. “We got all those new people who didn’t know how to vote” (Ibid). “Population growth is both a cause—and a consequence—of economic growth. Patterns of population growth and change reflect differences among regions to attract and retain people both as producers and consumers in their economy” (Smith 2001, 2). Figure 2. Crook County Population, 1969–99. Source: Smith, Gary W. 2001. Oregon Regional Economic Analysis Project Web page (http://www.pnreap.org/Oregon). As Figure 2 shows, total population growth for Crook County from 1969 to 1999 was 80 percent. That growth rate, as further depicted by Figure 3, is higher than Oregon’s, which was 60.8 percent, and that of the U.S., which was 35.5 percent. For a nonmetro Oregon county like Crook County to exceed the U.S. population growth rate was not unusual. Nonmetro Oregon’s average population growth rate, which is not depicted in these graphs, was 53.9 percent (Smith 2001, 4); however, most of nonmetro Oregon did not outpace the average population growth rate for Oregon, as did Crook County. Figure 3. Population Indices (1969 = 100): Crook County, Oregon, and the United States, 1969–99. Source: Smith, Gary W. 2001. Oregon Regional Economic Analysis Project Web page (http://www.pnreap.org/Oregon). One frequent goal of economic development is to create the ability for a community to weather economic fluctuations or become more economically resilient. An economically resilient community is one that can be economically shocked, quickly begin a rebound, and reach an equilibrium that may be very different from the pre-shock equilibrium, yet provides a similar number of jobs and preserves the community’s population. “Quickly” is measured in months rather than years. An economic shock or event is a market change that is a surprise and affects the employment growth rates and may permanently affect the employment level (Bartik 1991, 11). A new equilibrium is reached when the local area’s attractiveness to households and firms is at least enough to prevent decline (Ibid, 72). Probably the most important variable, for many people concerned with economic resilience, is employment. “Employment numbers remain the most popular and frequently cited statistics used for tracking local area economic conditions and trends” (Smith 2001, 2). Note that the estimates throughout this report are for full- and part-time jobs and do not necessarily represent individual people. A person may hold more than one of the jobs discussed. Also, employment estimates in the following graphs are based on place-of-work and do not include place-of-residence considerations. Crook County employment grew by 4,601 jobs, or 99.9 percent, from 1969 to 1999 (Figure 4). Figure 4. Crook County Employment, 1969–99 (Full- and Part-Time by Place of Work). Source: Smith, Gary W. 2001. Oregon Regional Economic Analysis Project Web page (http://www.pnreap.org/Oregon). Crook County once again exceeded the U.S., which had a 79.8 percent employment increase, and nonmetro Oregon, which had a 98.3 percent increase (Smith 2001, 3). The county’s employment growth was less than Oregon’s, at 126.1 percent (Figure 5). Figure 5. Employment Indices (1969 = 100): Crook County, Oregon, and the United States, 1969– 99. Source: Smith, Gary W. 2001. Oregon Regional Economic Analysis Project Web page (http://www.pnreap.org/Oregon). Although Crook County’s employment growth rate exceeded its population growth rate, both Oregon and the U.S. had rates that were proportionately higher than Crook County’s. So while Crook County’s job ratio (employment/population) increased from .47 to .52, Oregon’s job ratio increased from .45 to .63 and the U.S. job ratio increased from .45 to .60. Crook County did exceed the nonmetro Oregon average job ratio increase, which grew from .43 to .45 (Ibid, 7). A number of factors may have contributed to these changes in job ratios and the differential rate at which they occurred for the different areas: the percentage of women participating in the formally defined workforce, changing age distributions and the percentage of retirees within the population who are not participating in the workforce, and shifts of some full-time jobs to more than one part-time job (Ibid). Over the past decade, the median age of people in Oregon has increased from 34.5 to 36.3 years. Crook County’s median age increased even more than Oregon’s: it went from 35.8 to 38.6 years. However, this increase in median age was driven primarily by the aging of baby boomers, most of whom are still in the workforce. The percentage of people 65 years and older has declined during that same period in Oregon from 13.8 to 12.8 percent and in Crook County from 15.9 to 14.7 percent (U.S. Census Bureau 1990 and 2000). Since both Oregon’s and Crook County’s ages increased, while the 65 years and older component went down, it may be difficult to explain the different changes in job ratios based on the percentage of retirees growing faster in Crook County than in Oregon. It is possible that younger retirees make up a greater percentage of the Crook County population than in Oregon generally. Statewide, the composition of the workforce from 1969 to 1999 has shifted toward more service occupations, which can have a higher percentage of part-time jobs. That shift has also taken place in Crook County, though the change has not been as great as that of Oregon (Table 1). Table 1. Crook County and Oregon Employment Changes, 1969–1999. Source: Regional Economic Information Service—Geospatial & Statistical Data Center (geostat). As a percentage of total employment, the Services sector in Crook County has grown by 55.6 percent (from 11.8 to 18.4 percent), while in Oregon it has grown by 65.4 percent (from 17.9 to 29.6 percent). In addition, the Construction sector in Crook County grew by 153.7 percent, to move from a relatively small part of the county economy to over 5.3 percent of its sectoral employment. Construction plays an even larger role, when its indirect and induced impacts are considered. So the growth of the Construction and Services sectors and the slight increase in Retail trade’s sectoral employment proportion may be part of the explanation for the increase in jobs ratio for Crook County.