Obstacles Impeding Production: Bynum is the Democratic chair of the House Committee on Economic Development and Small Business in Oregon and represents District 51-Happy Valley. Wallan is the deputy chair of the House Committee on Economic Development and Small Business in Oregon and the representative for House District 6 (Medford) in that state’s legislature.
Legislators in Oregon Must Remove Obstacles Impeding Production
More than $50 billion will be allocated over a five-year period to assist semiconductor research and manufacturing thanks to the recently adopted CHIPS Act, which was championed by Oregon Senators Ron Wyden and Jeff Merkley.
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As the nation’s third-largest chip producer, Oregon stands to benefit greatly from this historic federal investment in the semiconductor industry. Oregon must immediately address the serious but solvable obstacles affecting our competitiveness in the face of tough competition from numerous states in order to take advantage of the federal incentives.
Democrats and Republicans who head the House Committee on Economic Development and Small Business agree that the state legislature must seize this moment to restore Oregon’s competitive edge and usher in a once-in-a-generation chance to promote more broadly shared and fairly distributed economic growth.
Designed to revitalize the U.S. manufacturing of semiconductors, the $280 billion CHIPS Act offers a variety of grants, incentives, research monies, and tax credits. Leaders are concentrating on keeping the United States competitive with foreign chipmakers because of the importance of the sector to national security and economic growth.
However, the potential for economic growth cannot be ignored, especially in Oregon, where Intel is the largest private employer.
According to a study conducted by ECONorthwest for Oregon Business & Industry and the Oregon Business Council, manufacturing occupations contribute more to our nation’s GDP than any other occupation, and they also pay workers more. Salaries in the manufacturing sector are 17% higher than the national average for full-time workers.
There are manufacturing wage premiums that do not discriminate on the basis of race, gender, or education level. ECONorthwest showed that for the typical non-white worker, median wages in manufacturing are equal to or higher than median earnings in other industries at the next education level. In some fields, non-white individuals with a bachelor’s degree earn more than whites with master’s degrees. For thousands of Oregon families, manufacturing is a ladder out of poverty.
Oregon needs both these kinds of jobs and the secondary employment opportunities generated by the industrial sector. Yet, if we want to increase our manufacturing presence, we’ll need to improve our resources and posture to serve existing businesses in Oregon and attract new ones. Some of the ways in which we might increase our competitiveness have already been put out by a task committee convened by Governor Kate Brown.
Many states have used tools like forgivable loans, workforce-training tax credits, and a restored Oregon research and development tax credit to successfully attract and retain high-tech manufacturers, including those making semiconductors. Oregon will need to make similar investments, though they will be much smaller in relative terms.
Beyond the semiconductor sector, there are policy impediments that must be overcome. In Oregon, industrialists can’t find the readily developable land they need. Large tracts of land are needed for computer chip manufacturing, while smaller tracts are needed for machine shops, food processors, and labor housing, among other purposes.
We have faith that the state legislature will figure out a solution to accommodate the growing demand for housing and commercial real estate in the state without jeopardizing the land use system that protects the state’s agricultural landscape.
Chip manufacturing continues to be problematic. There are still many obstacles that continue to affect semiconductor supply chains, with companies that may have to wait until 2024.
— Smart Business Insight (@SmartBizInsight) November 27, 2022
Manufacturers will still require regulatory clarity and predictability, even with suitable land and tax code assistance. Co-chaired by Governor Brown and Senator Wyden, the Oregon Semiconductor Competitiveness Task Force concluded that “current regulations and regulatory environment diminishes Oregon’s competitiveness and needs improvement.”
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It also found a handful of moderate recommendations Oregon can implement, such as faster project review timelines, without lowering our already-impressive environmental standards.
Our time here is limited, but it is one that we owe to ourselves and future generations to make the most of. The historic opportunity at Oregon’s doorstep calls for a well-defined agenda and legislative commitment commensurate with the magnitude of the task at hand. It will take a coalition of Democrats and Republicans like us to achieve a first-of-its-kind win for the entire state.
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