Analysts: Salem at risk for double-dip recession |

SALEM, Ore. – From housing prices to employment, nothing is going Salem’s way, according to economists at Moody’s, but what could tip the city into a double-dip recession are potential layoffs or furloughs of state employees.

According to the economists, Salem is one of 22 U.S. cities at risk for a double-dip recession.

There are 76,000 state employees in Oregon and 21,500 of them work in Salem. That’s almost a third of the entire state government workforce in the capital city.

“You’ve got such a high concentration of state government employees in the Salem area, the city’s definitely going to feel the effects of that,” said an assistant economist for Moody’s, Daniel Buehrens, by phone from West Chester, Pa.

With another state budget shortfall expected to lead to another round of state worker layoffs, many people are worried about Salem’s local economy.

At Saigon Restaurant, which caters to state employees, business started getting bad about a year ago. The owners say business has dropped off by 70 percent. In fact, they say they are no longer able to pay their bills.

“Very, very worried right now,” said owner Hien Tran.

There were few patrons at the restaurant during the noon lunch hour Tuesday.

Things are so bad for the owners of Saigon they have lost their home and have been forced to live with their son.

They don’t have to go far to realize they are not alone. The Quiznos next door shut down six months ago.

State employee John Turner, who was eating lunch at Saigon’s on Tuesday, said he’s aware it’s people like him who help keep local businesses afloat.

“I’m sad for them all, and I’m concerned it’s a sign for all of us,” he said.

Salem is the only city in the Willamette Valley that’s listed in Moody’s “at-risk” category. Portland, Corvallis and Eugene are listed as “in recovery.”