A11
B USINESS
THE BULLETIN • TUESDAY, MAY 25, 2021
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BRIEFING
Amtrak restores
service on routes
Amtrak says it will
restore daily service on
12 long-distance routes
across the country, in-
cluding two that run
through the Northwest.
The Empire Builder —
Chicago to Seattle/Port-
land — and Coast Starlight
— Seattle to Los Angeles
— routes resumed daily
service Monday, giving
passengers on the West
Coast more travel options .
The routes had only
been operating three times
a week due to low rider-
ship during the pandemic.
The Amtrak Cascades
route also added a sec-
ond round trip between
Seattle and Eugene and a
third round trip on the Se-
attle-Portland segment.
Service to stations
north of Seattle remains
suspended. Trips to British
Columbia on the Cascade
line have also not been
restored due to the bor-
der closure. Following
COVID-19 health proto-
cols set by Washington
state as part of its reopen-
ing plan, capacity for train
cars has been set to 50%.
The service restoration
will also bring back 1,200
furloughed employees.
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State sets deadline
to begin job search
Oregonians receiving
regular unemployment
benefits must start look-
ing for jobs by July 31
to keep receiving their
weekly payments, the
state said Monday, re-
instating a requirement
that had been on hold
during the pandemic.
On Monday, the Ore-
gon Employment Depart-
ment laid out the timeta-
ble for people to resume
their work search.
An initial batch of
35,000 workers are re-
ceiving notices indicating
they must register with
the state’s iMatchSkills
program, which matches
their qualifications with
current job openings on
file with the state. The
employment department
says 220,000 claimants
will have to register, so the
state is breaking that total
into groups and phasing
in the registration period
over five weeks.
— Bulletin wire reports
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Biden bets on wage growth for recovery
BY JOSH BOAK
Associated Press
The Biden administration recently
gave a bit of simple advice to businesses
that are unable to find workers: Offer
them more money.
This recommendation, included in
a White House memo about the state
of the economy, gets at a fundamental
tension in an economy that is return-
ing to full health after the coronavirus
pandemic. Businesses are coping with
spiking prices for goods such as steel, ply-
wood, plastics and asphalt. Yet workers,
after enduring a year of job losses, busi-
ness closures and social distancing, are no
longer interested in accepting low wages.
Administration officials say the
White House is not trying to target a
specific wage level for workers. But of-
ficials say higher wages are a goal of
President Joe Biden and a byproduct
of his $1.9 trillion relief package and at
least $3.5 trillion in additional spending
being proposed for infrastructure and
education.
Boosting wages gets at the central
promise of the Biden presidency to im-
prove the lives of everyday Americans
and restore the country’s competitive
edge in the world. Republicans say that
Biden’s policies have already let loose
a torrent of inflation that will hurt the
economy. The outcome of these com-
peting forces could decide the trajectory
of the U.S. economy as well as the fac-
tors weighing on voters in next year’s
elections.
The New York Federal Reserve re-
ported this month that there has been a
26% increase over the past year in wage
expectations by noncollege graduates.
The lowest average salary they expect
for a new job is $61,483, up more than
$12,700 from a year ago.
The wage pressures feeds into some
anxiety about inflation. The Biden team
sees the 0.8% month-over-month jump
in consumer prices in April as tempo-
rary, a sign of consumer demand and
the bottlenecks that naturally occur
when an economy restarts. But newly
released minutes from the Fed’s April
meeting suggest the U.S. central bank
could possibly raise interest rates ear-
lier than previously indicated to stamp
down inflation and potentially limit
economic growth.
The monthly jobs and inflation data
can be volatile as the economy restarts,
such that a single month could be an
outlier instead of an underlying trend.
What makes the current situation
unique is that wage pressures generally
build when the unemployment rate is
low. But the rate is 6.1% and the coun-
try is 8.2 million jobs below its pre-pan-
demic levels, historically the kind of
numbers that might lead workers to set-
tle for lower earnings.
The difference this time is that the
government spent a combined $6 tril-
lion over the past year, including relief
packages passed under former Presi-
dent Donald Trump, to minimize the
economic damage from the pandemic.
Western water
shortages
change what
farmers plant;
rice down 20%
OREGON
BY SIERRA DAWN MCCLAIN
Capital Press
Peloton plans first
U.S. factory in Ohio
Peloton plans to spend
about $400 million to
build its first U.S. factory
in Ohio. The exercise
equipment maker said
Monday the Peloton Out-
put Park will make the
Peloton Bike, Bike+ and
Peloton Tread starting in
2023. It will have more
than 200 acres and more
than 1 million square feet
of manufacturing, office
and amenities space. The
company anticipates add-
ing more than 2,000 jobs
in Ohio over the next few
years. Positions will span
corporate, manufactur-
ing, assembly and quality
assurance functions.
The New York-based
company has factories in
Asia and employs about
3,700 people, according
to FactSet.
Peloton has faced surg-
ing demand during the
pandemic. It reported that
revenue in the first three
months of the year more
than doubled on strong
subscription growth. Last
December, the company
spent $420 million to ac-
quire Precor, a company
whose fitness machines
populate hundreds of
commercial and hotel
gyms. That deal gave Pelo-
ton its first manufacturing
capacity in the U.S.
SILVER
$27.89 +.42
NO SIGN OF RECOVERY
IN MANUFACTURING
A Precision Castparts welder works on an aircraft engine component in the Portland headquarters.
BY MIKE ROGOWAY
The Oregonian
regon hotels are reopening,
restaurants are serving meals
again and workers are beginning
to return to the office as vaccines pro-
liferate and the COVID-19 pandemic
begins to fade.
The state’s factories, though, may
have suffered permanent damage.
Overall, Oregon has recovered 59%
of jobs lost during the pandemic, and
the state’s jobless rate has receded from
13.2% in April 2020 — the highest point
on record — to 6% last month. That
progress reflects the easing of health re-
strictions and billions of dollars in fed-
eral money that helped prop up the pri-
vate sector during the pandemic.
The manufacturing sector isn’t
showing a similar bounce. Oregon has
recouped just a fifth of the factory jobs
it lost a year ago, and recent numbers
point in the wrong direction.
As Oregon Employment Depart-
ment economist David Cooke noted
this month, the number of hours Ore-
gon manufacturing workers spend on
O
the job had been in decline even ahead
of the pandemic. Before anyone ever
uttered the words “COVID-19,” econ-
omists were warning the state faced
a “manufacturing recession” as for-
mer President Donald Trump’s trade
war disrupted global supply chains
and economies slowed in Europe and
China.
And while Oregon never shut down
private factories with coronavirus
health directives, some of the markets
those factories serve were severely af-
fected by the pandemic.
Metal components manufacturer
Precision Castparts laid off 40% of its
workers worldwide last year as demand
for airplanes dried up and Boeing shut
down production of its troubled 737
MAX. Railcar maker Gunderson cut
jobs the month before the pandemic
hit, then more in the ensuing months.
Steelmaker Evraz cut its Portland
workforce by about half.
Even as many other sectors have ex-
panded this spring, Oregon’s manufac-
turing sector shed 700 more workers in
April, according to the latest state data.
Rob Finch/The Oregonian file
Factory workers average about 38
hours a week on the job — an hour
fewer than before the pandemic. Econ-
omists look to those hourly figures as a
key indicator of the manufacturing sec-
tor’s health.
A shortage of computer chips has
hobbled manufacturing across the
country, holding up everything from
gadgets to automobiles while factories
wait for key components to become
available. And factories in Oregon and
across the country are facing a tight
labor market as businesses rush to re-
open and rehire.
Oregon remains among the most
manufacturing-dependent states in the
nation. And the state’s factory jobs pay
relatively well, with average earnings of
around $75,000 annually, compared to
$59,000 across all industries.
Manufacturing is a notoriously cy-
clical industry, with big swings amid
changing economic conditions. But
Oregon factories have been in steady
decline for decades, and recent reces-
sions have produced only partial recov-
eries — and lasting damage.
Bitcoin bounces after weekend drop
BY HAMZA SHABAN
The Washington Post
Bitcoin investors were strapped into
another roller coaster ride of sudden
drops this weekend, as the price dove
below $32,000 before recovering some-
what on Monday.
Leveling at about $37,000 during
Monday morning trading, the most
valuable cryptocurrency is still up
about 30% for the year. But the most
recent sell-off highlights the staggering
volatility of the crypto market and the
huge losses that investors can suffer in
the span of just days or hours. Bitcoin
holders have seen their investments
slide more than 40 percent since the
high of $65,000 set in April.
Overall, the crypto market has bat-
tered investors over the past week as
world governments signal increas-
ing scrutiny and traders liquidate
their holdings, halting the frenzy that
pushed prices skyward. The total value
of all cryptocurrencies tumbled by
more than $400 billion over the past
seven days, according to CoinMarket-
Cap, the cryptocurrency price tracker.
The plunge in prices comes as U.S.
Treasury officials announced a new tax
compliance plan to raise an additional
$700 billion, including a measure to
enhance reporting requirements on
cryptocurrency. Under the initiative,
unveiled Thursday, companies that re-
ceive cryptocurrency with a fair market
value of more than $10,000 would be
required to provide the Internal Reve-
nue Service with more financial infor-
mation.
The report described digital cur-
rency as a “significant concern.” “Cryp-
tocurrency already poses a significant
detection problem by facilitating illegal
activity broadly including tax evasion,”
the report said.
Potentially rattling investors further,
government proposals put forward on
Friday would limit cryptocurrency ex-
changes based in Hong Kong to serve
only those users who are professional
investors — those who already have
a significant investment portfolio —
knocking retail investors out of the reg-
ulated market.
Dogecoin, the popular cryptocur-
rency that began as a joke, was also
down significantly from its all-time
high. The token was trading at about
32 cents Monday morning, down from
a record 74 cents reached during the
run up to billionaire executive Elon
Musk’s appearance on “Saturday Night
Live.”
Wall Street strategists face an almost
impossible task in trying to analyze the
outlook for tokens. Even so, they are
still trying.
Mathew McDermott, global head of
digital assets at Goldman Sachs, wrote
that the company is looking at cryp-
to-related offerings, such as “fund or
structured note-like products.”
Bitcoin, Ether and Dogecoin are still
sitting on major gains over longer time-
frames, such as the past year — about
12,000%, in the case of Dogecoin.
Bloomberg News contributed to this report.
Widespread drought and water
shortages in 2021 are affecting what
farmers in the Western U.S. are plant-
ing. Farmers across Oregon and Cal-
ifornia are making difficult decisions:
tearing out acreage, replacing water-
dependent crops with crops that can
thrive on dryland and leaving land
fallow.
Rice, a water-dependent crop, has
been affected. According to the Cali-
fornia Farm Bureau Federation, rice
farmers are planting fewer acres this
year. Analysts say the state’s rice acre-
age will likely be down 20% from aver-
age because of water restrictions, driv-
ing up the price.
The U.S. Department of Agricul-
ture estimated California will produce
471,000 rice acres this year, down 9%
from 2020.
Industry leaders predict farmers
will leave about 100,000 acres of rice
ground idle this year.
Cranberries, like rice, need wet
conditions to thrive, and experts say
this year’s water shortages will impact
cranberry producers’ planting and
harvesting decisions. According to the
U.S. Drought Monitor, Oregon’s south-
ern coast — a major cranberry-grow-
ing region — is already experiencing
severe to exceptional drought.
Over the past 10 years, as water
shortages have become more com-
mon, experts say the shrinkage in al-
falfa acreage has been “dramatic.”
According to USDA’s National Ag-
ricultural Statistics Service, California
farmers in 2020 harvested just 515,000
acres of alfalfa, down from more than
1 million acres in 2010. Oregon’s al-
falfa acreage also shrank during that
timeframe — by nearly 14%.
“Drought has been a huge contrib-
utor to the decline in alfalfa acreage,”
said Daniel Putnam, Extension agron-
omist and forage specialist at the Uni-
versity of California , Davis. “Water
uncertainty, labor and economics, I
think, have driven the shift to different
crops.”
Although the West exports hay, Put-
nam said it’s actually a “hay deficient
region.” With shrinking alfalfa acreage,
Putnam said he expects higher hay
prices this year — good for hay grow-
ers, bad for livestock producers.
In the best almond-growing regions,
most growers are continuing as-is or
even scaling up production. In con-
trast, some growers across drier areas
are pulling out hundreds of almond
acres and either planting other crops,
like pistachios, or finding other uses
for land, like leasing to solar facilities.
Overall, however, the almond indus-
try continues to grow by acreage and
production, said Richard Waycott, the
Almond Board’s CEO and president.
Farmers growing other crops, in-
cluding vegetables and fruits, are also
suffering.
Industry leaders across commod-
ities are pushing legislators to have
more conversations about groundwa-
ter recharge, stormwater and recycling
of municipal wastewater.