Freedom Foundation

Do the Math

If you’re locked up at home and can’t fight COVID-19, at least you can spend some time doing math.

Everyone is caught up with all the stress of dealing with the health and economic fallout of the COVID-19 outbreak.   Perhaps it’s too early to start number crunching and doing some objective analysis. But if the state isn’t going to let me go to work, I’ll play the “idle hands” card and start the conversation.

Let me first say, it’s an awful disease. I can’t imagine the horror of suffering or dying from any respiratory disease. My heart goes out to those who have died and those who have lost loved ones.

Likewise, it’s an awful thing the government has done to the economy.  May we all survive both.

It’s axiomatic to say this will be devastating to Oregon’s economy. How devastating is not yet known, but’s not inconceivable the impact might cause the state gross domestic product to take a hit in the range of 30 to 50 percent. In a state that is highly — perhaps disproportionately ­ dependent on income tax, such an economic hit will almost certainly impact government at the same rate.

So, at a time when revenues are certainly, reasonably expected to plummet, it’s fair to ask what steps the state is preparing to take to limit expenditures.

One of the industries that is arguably the most impacted, if not the most visible, is the restaurant and bar industry. This industry is host to much of the lottery activity in Oregon, so I would think it would be reasonable for the Oregon Lottery to quickly cut staff.

I asked them about their plans and received this response on April 28:

“Executive team staff are currently working to identify furloughs, layoffs and salary reductions in their areas. We’re looking for the right balance between fiscal responsibility and maintenance of critical work. Those plans should be finalized later this week, and communicated to staff shortly after that. We know the situation is constantly evolving, so our plans may need to adjust as new information becomes available.”

In other words, we’re starting to start to think about possible reductions.

Meanwhile, the state is hiring. The Employment Department has “doubled the number of staff dedicated to taking claims and is in the process of tripling it.”  Maybe they could just hire some of the people who are calling their overwhelmed phone banks. Or is that too simple?

“Thank you for continuing to hold. The operator may offer you a position in the Employment Department, which will invalidate the claim for which you’re holding.  To continue to hold, press 1.”

There’s more hiring elsewhere in state government.  In a May 1 press release, Gov. Brown announced her “contact-tracing plan sets a goal of training at least 600 contact tracers” (Emphasis mine).  These contact tracers are not just your garden-variety, off-the-shelf contact tracers, either.  The plan has “a focus on recruiting individuals with cultural and linguistic competence for the populations they serve,” which certainly increases their price.

The headline for this post promised some math, which means I’m not going to get out of this article without doing some, so here goes. The Legislative Fiscal Office uses the figure of $250,000 per biennium as an estimate for the cost of hiring a new employee. That includes salary, benefits, overhead, a computer, a cubicle, a boss, etc., so if you divide the biennial cost by two, that means $125,000 per year.

Multiply that times 600 workers and you get a cool $75 million. That doesn’t even count the new Employment Department hires.

Just so you know, 1.75 percent of that $75 million or — even more math — over $1.3 million goes to union dues, just in time for the November elections.

Maybe we can just use the guys from the Oregon Lottery as contact tracers.