Deschutes County is a serfdom

There's an article about used luxury goods in todays Bulletin: Designer labels on the cheap

This article has an interesting little snippet about Deschutes County income:

On the surface, Central Oregon families don't have incomes much higher than the state average. The median family income in Deschutes County was $56,510 in 2005, according to the American Community Survey, an extension of the U.S. Census Bureau. In the state, the median family income was $52,698. In the Portland area, it was $60,345. Income data for Crook and Jefferson counties was not available.

However, incomes aren't don't indicate a population's wealth because they do not include assets like stock or real estate investments.

In 2004, almost 22 percent of the personal income in Deschutes County came from dividend, interest and rent versus 18.3 percent in Oregon and 15.8 percent in the United States, according to the U.S. Department of Commerce's Bureau of Economic Analysis. That means a larger portion of income in the local area is coming from sources other than wages, suggesting Deschutes County may have greater wealth.

Interesting that 40% more of our income comes from not working than the national average. I suppose many retirees bring a decent sized stock and bond portfolio, and that accounts for some. But I'll also bet that a larger than average share is accounted for by rental income. This is becoming less a town of workers, than indentured serfs.

This stat is also the reason I think we're going to suffer a protracted downturn in real estate: there's just not the income from real wages to support it. We make less money than the rest of the country. We dissipate wealth here, far more than the rest of the country, and we earn much less by working.

I've been banging the drum for getting real employers here forever. Not dissipating tax payer dollars on filling Bachelors ski lifts. You have to constantly beg for those dollars (ie marketing), whereas productive employers produce employees that produce dollars and spend them on real infrastructure, not leisure driven wealth dissipation.

And of course, those who are running the show are actively AGAINST changing the status quo. Permanently high & ever rising capital gains are all they care about. Unfortunately this raises the misery of the masses, relegating more and more from the middle class to perma-serfs, forever indentured slaves to a too-high mortgage or rental payment.

It's easy to spot a serfdom: The incomes are inordinately low compared to the capital assets. This article shows that we have 40% higher capital to income ratio than the rest of the country. And while medevil serfs were condemned to their circumstances for most if not their entire life, we are mobile. And as long as the prospects of earning is low compared the costs of existence, we can count on population flight, talk of "unique beauty and recreation" notwithstanding. People don't care about those things when they are working 16 hours a day, or can only look forward to a 2 bed slumlord apartment as the rewards for an 8 hour day.

We need to stop focusing on artificially manipulating the UGB and other idiocy for sustaining RE prices. Nothing will stop people from fleeing poor economic circumstances, and those circumstances are coming soon. We need NEW REAL EMPLOYERS, now! We don't need Bachelor to have 140% capacity, more waiter jobs, or another art gallery. We need our incomes to be at least in the vicinity of the national averages, and we are now nowhere close.

As long as Cent OR wages remain low, we will continue to suffer from high beta, and very expensive economic swings. We will benefit inordinately at the tail end of economic booms (as we are now), and conversely we will be dragged down farther and harder during downturns. Any shopkeeper can tell you they'd rather have steady sales all year, than feast and famine cyclicality.

We're at the tail end of a boom, probably the biggest boom this place has ever (or will ever?) seen. Things are about to get bad, worse than a lot of people think or will admit. And some will blame flippers, CA refugees, and the like. But those are symptoms, not the problem. The problem is income, and the solution is Real Living Wage Employers. Higher RE will actually make the problem worse. It produces serfs, and those serfs soon realize they are in an intenable economic position, and leave. Companies realize full well that this makes for a poor location, when employees can't affords lifes basic necessities. That lesson only seems to be learned at the bottom. We need to stabilize the Cent OR economic base with steady employment that stays throughout the year AND pays real living wages. Otherwise we are doomed to repeat the boom-and-bust cycle that have characterized this area forever. We've just seen the happy side of this cycle, and instead of doing what's required to moderate this cycle, we've done everything possible to make it worse.

Five years from now, we'll all be scratching our heads wondering, "What could we have done differently to avert this disaster?"; And rest assured it will be a disaster when our workforce has fled, incomes and RE values have fallen, probably by close to half. We've squandered this RE boom, and we're about to pay the price. Will we ever learn?