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Intel report spells out firm’s economic impact in Oregon

Lest Oregonians begin to doubt Intel’s place in the state’s economic food chain or suspect it isn’t carrying its weight for schools and government services, the chip giant has a passel of new statistics to set them straight.

TED SICKINGER OregonLive.com

The Santa Clara, Calif., company released an economic impact study Wednesday commissioned from the regional economic consulting firm ECONorthwest. The study updates one completed in 1998 and comes to a conclusion that may not be wholly surprising to locals:

When it comes to the economies of Washington County, Portland and Oregon, Intel is still the big enchilada.

The study said that in 2001, Intel’s operations in Washington County produced $6.18 billion in output and employed 15,319 people, who received $1.51 billion in wages, salaries, bonuses and stock option gains. In the same year, the company donated $13 million in cash and equipment to charities in Oregon and paid $84.97 million in taxes and fees to local governments.

From 1998 to 2001, the study said, Intel added 3,300 employees and was responsible for an additional 36,300 jobs in the state. Directly or indirectly, it was responsible for 16 percent of the statewide employment increase during that period. And the jobs were well paid: in 2001, the average Intel employee earned $98,500, more than double the average Washington County wage.

The study’s output, employment and wage figures likely overstate the case today, as the company has cut almost 1,000 jobs since 2001 and limited pay raises and bonuses because of the ongoing downturn in the semiconductor industry. Additionally, the stock market’s decline has cut into stock option gains realized by employees and trimmed the income taxes paid by the company and its employees.

But Intel has continued to make huge investments in new plants and equipment in Oregon, which averaged $1.76 billion annually from 1998 to 2001. And on a percentage basis, it has cut far less of its work force than most other Silicon Forest employers.

To get a sense of Intel’s total economic weight, the study tallied the annual impact of Intel’s operations — including its own production, employment and wages, plus goods and services purchased from suppliers, and goods and services purchased by its employees — and added its capital spending, contributions and taxes in Oregon. The figure totaled $8.9 billion in 2001, more than double 1997, according to the study.

While the study made no attempt to calculate the total public cost of Intel’s presence in Oregon, Intel spokesman Bill MacKenzie noted that in 2001, the company and its employees paid far more in taxes for local government and schools than it costs those entities to provide services.

"I know there are people out there who feel we’re not paying our fair share," he said. "We are in no way a cost center for schools or government. The fact is, we’re subsidizing other people."

Of Intel’s 15,319 employees at the end of 2001, nearly 10,000 lived in Beaverton and Hillsboro. An additional 2,700 called Portland home. The company’s employees in the state have an estimated 7,000 children.

According to ECONorthwest, Intel and its employees paid into the school system $51.9 million more than the cost of educating employees’ children.

MacKenzie said Intel orders the study to better understand its role in the local economy and in turn inform local and state government officials. The company is meeting with Hillsboro and Washington County officials and members of the governor’s staff this week to outline the study’s findings.

"It helps our voice be heard when we have opinions on public policy," MacKenzie said. "We’re a data-driven company; we can’t just go out there and say we’re a big deal."

Intel intends to post the study Monday on its Web site at http://www.intel.com/go/tooregon

http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1046350757262401.xml

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