For Larry Browning, health insurance is the most consistent and most frustrating cost of his business.
In the last 12 years, the president of Discover Sunriver Vacation Rentals said he's had to pay 15 percent more per year for employee health insurance premiums.
He now pays $75,000 per year on benefits for his 25 full-time employees.
"I'm livid," Browning said of the cost. "In the business I'm in, we are extremely competitive and are continually trying to increase our level of service. Yet, because of that competition, we have not been able to increase our pricing (for services) for several years."
Without regular price increases to offset the cost of health care, Browning is forced to make up the difference elsewhere - in some cases increasing work loads for employees.
"It's a vicious circle," he said.
High insurance costs aren't only hurting employers, according to a study released last month.
A report from a Silverton-based research institute found that Oregon health insurance costs are increasing faster than incomes.
In Central Oregon, the median income is increasing, but not keeping up with the region's high cost of living and rising health insurance costs, according to the Oregon Center for Public Policy report on income, poverty and health insurance.
That means more Central Oregonians are struggling to afford increasing health care costs, while wages crawl up at nearly the same rate as inflation, the study said.
But things can't be all bad in Oregon - after all, people wouldn't move here if no well-paying job opportunities existed, said Noah Clarke, economist for the Goldwater Institute think tank in Phoenix, Ariz.
Income vs. inflation
Between 2000 and 2005, the annual median income declined in Oregon and the United States when adjusted for inflation, according to the OCPP, a public policy think tank, which released the report.
The Oregon median household income was $42,944 in 2005, down 7.6 percent from 2000 when adjusted for inflation, according to data from the U.S. Census Bureau, American Community Survey and Oregon Employment Department.
The U.S. median household income was $46,242 in 2005, down 6 percent from 2000 after adjusting for inflation.
Part of the problem is the state is not creating enough high-paying jobs, said Mike Leachman, policy analyst with the OCPP.
"Nearly two-thirds of the jobs we've created since the last economic peak in the '90s have paid less than $30,000 per year," Leachman said. "And now that employers are less likely to offer health insurance than a few years ago, it's really stretching people's incomes."
The High Desert, however, bucked state and national trends: the 2005 median household income was $49,163 in 2005, up from $47,520 in 2000, adjusted for inflation.
Why the rise in Central Oregon? The region didn't lose as many high-tech jobs as the rest of the state in the 2000 recession, according to local economists.
"While Oregon, as a whole, fared worse, out here we didn't lose those (high-tech) jobs and at the same time gained more households," said Steve Williams, regional economist for the Oregon Employment Department in Bend. "Part of the assumption is that some of those gains are on the higher-income side, but we don't know that for a fact."
Income gains at the top aren't good for the overall population, Leachman said.
"The (Oregon) economy is doing great, but many people in Oregon's economy aren't," Leachman said. "Income and earnings growth is going to high-income folks, not reaching the middle- and low-income households."
For example, Leachman said, the typical Oregon CEO has seen a 20 percent pay raise since 2002, whereas, the typical worker hasn't.
Raises aren't nearly that hefty for other workers in Deschutes County. The median income in the county is only up 3.5 percent since 2000, barely keeping up with inflation, economist Williams said.
"Inflation is 3 percent a year or so," Williams said. "You at least want your income to stay with inflation so your dollar is worth the same at the grocery store every year."
When other costs like health care increase faster than incomes, consumers feel the burden, the OCPP says.
In Oregon, 16.4 percent of residents went without health insurance in 2005, according to the OCPP. That's up from 13.4 percent in 2000.
In Central Oregon, 32,000 people - 18.4 percent of the tri-county population - are uninsured, according to Don Myron, of the state of Oregon Insurance Pool Governing Board. Myron does not have uninsured numbers for Central Oregonians in 2000.
The region's high health care costs compound problems with labor, energy prices and material goods, Leachman said. Unemployment rates have dipped low enough to signal an almost fully employed population in the tri-county area.
In Deschutes County, the July unemployment rate slipped to 4 percent, at least 1 percentage point lower than the state and national rates.
Additionally, the cost-of-living index for Bend is 107 - 100 is considered average - the second-most expensive place to live behind Portland, according to a Virginia research firm that conducted a study of five Oregon markets.
Bend's health care index was 116.5, behind Portland's 126, according to the report released last week.
For businesses that can afford to offer health insurance, benefits have declined and premiums have escalated in recent years, according to Ron Gallinat, principal of Central Oregon Employee Benefits LLC.
"One of my employer clients had a premium in 2002 of just over $130 for a single person," Gallinat said. "The premium today is just over $210, an increase of roughly 60 percent."
He's seen similar cases with other employers, not to mention the premiums workers must pay.
Comparing premiums for a family today and in 2001, Gallinat found that five years ago, one family's premium was $475 per month. Today, the same plan's premium is more than $870 - an 83 percent increase.
"Incomes for families certainly have not increased this much," Gallinat said.
The other side
The OCPP data may not tell the whole story, said Clarke, of the Goldwater Institute.
"Obviously, Oregon is not a bad place to be, otherwise people wouldn't be going there," Clarke said. "Oregon is growing at an incredible rate, has cut unemployment in half (in recent years) and has gained something like 1 million people in the last five years."
Clarke said it is illogical to claim that despite the state's booming economy, residents are losing money.
"The statistics don't reflect changes in goods you are buying," he said. "For example, if someone starts making better cars, they may cost more but (inflation) doesn't take into account it's an improved good - they just see an increase in price."
Besides the different interpretations of inflation, income analyses don't take into account that most workers see pay increases every year.
"Over time, these are not the same people you are measuring because they move out from the lower-paying jobs quickly to higher-paying jobs," Clarke said. "That's why they come to Oregon."
Clarke said the state's growing Hispanic population accounts for many of the lower-income workers who come to the state for jobs and opportunities for financial advancement. That could explain how many new workers make lower wages.
Leachman, supporting the OCPP data, said the information should be used as an education resource for state policymakers. He advocates a more progressive tax structure, which would tax upper-income levels more than mid- and lower-income levels, thus more evenly distributing wealth.
"Public policies in place are not supporting opportunity or ensuring that the benefits of growth are widely enjoyed," Leachman said.
Conversely, Clarke says the state taxes Oregonians too much, decreasing their personal incomes.
"The larger percentage of personal income the government takes, the less for you," Clarke said.
Anna Sowa can be reached at 383-0304 or at asowa@bend bulletin.com.