Vancouver, Washington - Economy

Economy

The Vancouver economy is characterized by border economics with neighboring Portland, Oregon. The state of Washington levies no individual or corporate income taxes and levies a property tax below the national average and a sales tax above the national median. The State of Oregon has no sales tax but one of the highest state income taxes. As a result, many Vancouver residents prefer to shop in neighboring Portland where they do not pay sales taxes then live and work in Vancouver where they do not pay state income tax. For the same reasons, the city is popular with retirees. Conversely, the city is less favored by students and young adults. In 2003, 70% of workers in Vancouver worked in Clark County. There is a risk in sales tax avoidance because Washington has a use tax due on all purchases made in Oregon that are then returned to Washington. Vancouver residents "shop at their own risk" when attempting to avoid the sales tax in Washington, although the rule is rarely, if ever, enforced (except for purchases requiring registration, such as motor vehicles).

The skewed taxation and demographics depresses the retail and entertainment sector of Vancouver's economy. Oregon has stricter development laws to protect the timber industry; therefore, Vancouver tends to attract a higher proportion of the region's sprawling development. Outer areas are dominated by strip malls and franchise stores. Downtown revitalization efforts have repeatedly underperformed. The skewed voting base also lead to rejection of extension of Portland's light-rail system into the city for several years. In 2015, Washington will transition away from being a control state, but Oregon will continue to maintain a monopoly on alcohol sales.

The economic history of Vancouver reflects the region. Moving from a salmon- and trade-based indigenous economy by the Chinook people, the Hudson's Bay Company pioneered extractive industries such as the fur trade and timber. Subsistence agricultural gave way to market and export crops such as apples, strawberries and prunes. Largely bypassed by the railroad in the 1880s, when the Oregon Steam Navigation company would ferry trains across the river downstream from St. Helens, Oregon to Kalama, Washington, early downtown development was focused around Washington Street (where ferries arrived), lumber and Vancouver Barracks activities such as a large spruce mill for manufacturing airplanes. A 1908 railroad swing bridge across the Columbia allowed greater industrial developments such as the Standifer Shipyard during the first world war. With the Interstate Bridge and Bonneville Dam Vancouver saw an industrial boom in the 1940s, including the Kaiser shipyard and Alcoa, as well as a Boise Cascade paper mill, just west of the Interstate Bridge.

As the old-growth forests were depleted and heavy industry left the United States, Vancouver's economy has largely changed to high tech and service industry jobs, with many residents commuting to Portland. Vancouver contains the corporate headquarters for Nautilus, Inc. and The Holland (parent company of the Burgerville, USA restaurant chain).

The Port of Vancouver USA operates a port on the Columbia River, which separates Oregon to the south and Washington to the north. It handles over 400 ocean-going vessels annually, as well as a number of barges which ply the river and its tributaries as far as Lewiston, Idaho.