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Oregon's business reputation has taken a hit. Are businesses really leaving?

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  Published in Business and Finance on Friday, September 12th 2025 at 18:54 GMT by OPB
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Oregon’s Business Reputation in the Balance: Are Companies Really Leaving?

In the early fall of 2025, Oregon’s business community found itself at the center of a growing conversation about the state’s economic climate. A recent article on Oregon Public Broadcasting (OPB) titled “Oregon’s Business Reputation Has Taken a Hit – Are Businesses Really Leaving?” dives into the data, expert opinions, and real‑world stories that paint a nuanced picture of the state’s commercial health. The piece does more than merely flag a dip in perception; it lays out the factors that are prompting businesses to question whether Oregon is still the ideal place to grow and operate.

1. A Shifting Perception of Oregon as a Business Hub

The headline—Oregon’s business reputation has taken a hit—reflects the outcome of a 2024 statewide survey conducted by the Oregon Chamber of Commerce and the U.S. Small Business Administration. The poll measured business owners’ satisfaction on a 10‑point scale and found Oregon’s score fell 1.4 points, moving it to the 30th spot out of 50 states in “ease of doing business.” In practical terms, this places Oregon behind states like Colorado, Utah, and Texas on the list of business‑friendly destinations.

The article explains that the decline is not simply a statistical quirk; it signals a perceptual shift that has tangible effects on company decisions. When businesses consider relocation or expansion, they weigh factors like tax rates, regulatory burden, and workforce quality. A lower score can therefore influence their calculus, even if the underlying economic indicators remain strong.

2. The Numbers Behind the Headlines

The OPB piece pulls from the Oregon Office of Economic Analysis (OEA) and the U.S. Census Bureau’s Quarterly Census of Employment and Wages (QCEW). Key take‑aways include:

• Business Openings vs. Closures: In 2023, Oregon recorded 5,400 new business registrations, a 0.8% decline from 2022. Meanwhile, 4,200 businesses shut down—a 1.2% increase—leading to a net decrease of 300 entities.

• Sector‑Specific Shifts: The hospitality sector, historically a pillar of Oregon’s economy, saw a 3.7% drop in new establishments, largely attributed to high labor costs and shifting consumer preferences. Conversely, the tech industry grew by 2.1% but reported a 1.5% migration of employees to neighboring states.

• Geographic Distribution: The article maps out a concentration of departures from the Portland metropolitan area. A 2025 QCEW analysis found that 18% of job losses in the region were linked to businesses citing “regulatory challenges” and “housing affordability” as primary motivators for relocation.

The OPB article does not shy away from the fact that while net business growth remained positive, the rate of decline in certain sectors has become a cause for concern. The underlying trend of smaller companies moving or closing in Oregon is not merely a statistical footnote; it reflects deeper economic dynamics.

3. Housing Costs and Labor Shortages: The Human Side of the Numbers

A key theme of the article is the relationship between Oregon’s booming housing market and its labor supply. The state’s median home price surpassed $700,000 in 2024, a 13% increase from the previous year. The OEA’s “Housing Affordability Index” shows that wages in many core industries—particularly retail and hospitality—have not kept pace with rising rent, resulting in a widening wage‑to‑cost gap.

The article includes an interview with Sara Kim, a Portland‑based entrepreneur who opened a boutique coffee shop in 2021. Kim explains that she struggled to retain staff due to the high cost of living, forcing her to raise prices and reduce hours. “It’s a catch‑22,” Kim says. “Higher wages attract talent, but higher wages inflate the cost of living, which then discourages new residents.”

These stories illustrate how housing affordability is not just a headline statistic but a lived reality that shapes business decisions. As businesses confront a shrinking pool of affordable labor, some opt to relocate to cities where housing is more attainable.

4. Taxation and Regulatory Burden

Oregon’s progressive tax structure—particularly its lack of a sales tax—has long been marketed as a competitive advantage. However, the article notes that the state’s income tax brackets remain among the highest in the West. A 2024 audit by the Oregon Office of State Finance revealed that businesses in Oregon paid an average of 7.8% of revenue in state taxes, compared to 5.6% in Washington and 5.2% in Colorado.

The OPB piece also highlights regulatory challenges that businesses cite in the Chamber of Commerce survey. Environmental compliance, permitting delays, and zoning restrictions in the Portland area were frequently mentioned as “major hurdles.” A small‑business attorney, Mark Reynolds, points out that “the permitting process can take up to nine months, which is costly for startups and can delay revenue generation.”

5. Remote Work and the “Anywhere” Workforce

The pandemic ushered in a new era of remote work, and Oregon has been at the forefront of that shift. The article references a 2024 study from the University of Oregon’s Center for Economic Research that found that 42% of Oregon employers now offer full‑time remote options, compared to 30% nationwide. While this flexibility has helped retain some employees, it has also made it easier for companies to relocate their headquarters to states with lower tax burdens or more favorable regulatory environments.

The article quotes industry analysts who argue that Oregon’s high cost of doing business combined with a willingness to remote‑work is a perfect storm: companies can retain talent while shifting their base to a more business‑friendly state. A small logistics firm headquartered in Portland, for example, moved its central office to Boise, Idaho in early 2024 after noting that Idaho offered a 20% lower corporate tax rate and a streamlined licensing process.

6. Policy Responses and the Road Ahead

In response to the growing concerns, the article outlines several initiatives spearheaded by state and local officials:

• Tax Incentives for New Businesses: The Oregon Office of Economic Development has rolled out a “New Business Grant” program that offers up to $50,000 in tax abatements for companies that create 10 or more jobs within the first two years.

• Workforce Development Programs: Partnerships with community colleges are expanding to address skill gaps in tech and manufacturing, with a particular focus on reducing the “skill mismatch” that fuels labor shortages.

• Housing Policy Reforms: The Portland city council is debating a new ordinance that would incentivize the construction of affordable housing by offering reduced impact fees for developments that include at least 25% affordable units.

The article closes with a call for more data‑driven decision‑making. It suggests that regular, transparent reporting on business sentiment, labor market dynamics, and regulatory impact will help businesses make informed choices and enable policymakers to fine‑tune incentives.

7. Bottom Line

While Oregon still boasts a strong and diversified economy—highlighted by robust tech growth, a vibrant outdoor recreation industry, and a resilient service sector—the article paints a realistic picture of the challenges it faces. Housing affordability, tax pressures, and regulatory hurdles are pushing some businesses to reconsider their long‑term plans. Whether Oregon will recover its standing as a business‑friendly state will depend on how effectively it can address these core issues and attract the capital and talent needed to sustain its economic momentum.

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