The latest indicators issued by state and federal agencies confirm what Wallowa County business leaders have suspected for some time - the economy is in rough shape.

For the fourth month in a row, Wallowa County posted the highest unemployment rate in the state, registering at 11.9 percent in May, according to the June edition of Labor Trends, issued by the Oregon Employment Department.

"As has been the case since February, Wallowa County again claimed Oregon's highest local area unemployment rate," said Regional Economist Jason Yohannan, author of the Labor Trends report. That is down from 15.1 percent in April but higher than expected in Wallowa County's seasonal economy.

Yohannan said the poor employment numbers may be due, in part, to an exceptionally rainy spring in Northeastern Oregon during the month of May.

"Then again, maybe it's just one more reflection of a generally weak economy," he said.

Yohannan suggested that if the lackluster employment picture was weather-related, then he would expect June employment figures to make up for the earlier losses.

"But if June's numbers are similarly sub-par, then we still have a problem," he added.

The Employment Department estimated that 2,950 people were employed during the month of May while 397 people were unemployed. That compares to 2,954 employed a year ago and 323 without jobs.

In addition to losing jobs, Wallowa County is losing people, according to figures recently released by the U.S. Census Bureau, which reported that from 2000 to 2002 the population of Wallowa County declined by 2.9 percent to 7,025 from 7,226. Over the same three-year period the population declined in all four incorporated cities in the county. Enterprise fell to 1,827 from 1,895, Joseph to 1,017 from 1,055, Wallowa to 837 from 869, and Lostine to 252 from 263.

Meanwhile, the average salary in Wallowa County remained much below the state and national average. The Employment Department estimates that the annual salary in Wallowa County is $22,860 a year, compared to the state average of $33,202 and the national average of $36,214. In five neighboring counties the average annual pay is $23,983.

Deposits at Wallowa County banks over the past year have been flat, according to Bruce Penoske, president and chief executive officer of Community Bank. Penoske reported that the three banking companies operating in the county had total deposits of $130.9 million in 2003, up from $128.6 million in 2002, an increase of 1.2 percent.

"That's a good sign that people are not taking their dollars and going elsewhere," said Penoske, "but (the increase) is not necessarily new money; it's probably mostly just interest retained."

"We basically have zero projects going on in the county," he said, "and the logging industry continues to struggle for the seventh or eighth year in a row."

The bank CEO characterized the local economy as a "barbell" with a substantial number of people at or below the poverty level and a substantial number of people with above average wealth ... and not many people in between.

"We have lost that middle part of the economy - loggers, teachers, Forest Service people," said Penoske, adding, "Some of those people have been replaced by people coming in and building a place to retire. To me, that's the good part of the economy - new dollars in the form of retirement pensions."

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