October 4, 2014 2 Comments
A review of some “big picture” economic indicators for the Spokane area.
Spokane Airport passenger usage remains weak – now less than in 1995.
We call this “growth”, of course. (See the Comments to this post to see how a rise in passenger use was called a positive economic indicator by local promoters in 2001, 2005 and 2006 but when passenger levels declined they now pretend passenger usage no longer matters. Right.)
Felts Field air operations fell off a cliff:
Total air operations in the area have collapsed (but local political leaders refer to this as “continued growth of aviation!” – may be if we turn the chart upside down!)
Non-stop year-round destination cities have declined from 18 to 11 (including the subsidized daily flight to Los Angeles).
The rate of growth in jobs (for the entire County) has slowed. The area is no longer producing jobs at the same rate as natural population growth (from births and inbound migration, over time). That means the population is getting larger but the number of jobs is not keeping up. Here’s a chart highlighting the slow down in job growth:
Spokane County non-farm jobs trend – mostly flat since 1998.
City of Spokane jobs have been going down for about two decades – there is no increase in net jobs since the mid 1990s.
Can you spot the increase in jobs created by the Convention Center expansions? The total number of jobs in the City of Spokane has continued to fall, even after passing their expansion initiatives. (Chart from US BLS, updated to early 2014.) The City of Spokane has flat lined.
Unfortunately, Spokane was ranked as the worst metro area out of 100 for job growth in a 2012 poll.
While the United States has recovered nearly all jobs lost since the 2008 downturn, and Washington State has recovered more than all the jobs lost since the downturn, Spokane County has recovered about half the jobs lost. Here are the charts for the U.S. as a whole, the State of Washington, and then Spokane County.
(At the end of 2014, there are some indications that the US economy may be headed into a slowdown. If this happens, the effects on Spokane would be bad, very bad, as Spokane has not yet fully recovered from the 2008 downturn.)
- US jobs regained – about 100%
- WA jobs regained – more than 100%
- Spokane County jobs regained: 52% using seasonally adjusted totals, or 44% using non seasonally adjusted data
(From US BLS)
Median Family Income Compared to Other Washington Cities
Spokane’s economic situation is not good: Spokane ranks 53d out of 59 Washington cities for median family income
Spokane’s Housing Stock is Old – Highlighting the Limited Economic Growth in the Area
Growing cities, with growing economies, show newer housing – Spokane has a stock of old housing, indicating low growth. The boom years are obvious in this chart – 20% of homes here were built in 1900-1919 (mining boom), and 31% in 1940-1959 (aluminum processing boom, post World War II growth of families):
Here is a typical growing city housing age pattern (in this example, Olympia, WA) – in a modern, growing city, you can see that more homes are built to meet the demand of contemporary growth.
Spokane has essentially no growth and hence, very little new home construction compared to thriving cities. More example cities are here.
Chart of the number of home sales from 2000 to 2014 (only through spring as this chart is slightly out of date):
The original chart for the above (from Trulia.com) used a logarithmic scale for the Y-Axis which ends up making the peaks and valleys nearly flat. A software tool was used to convert the log scale chart into a linearly scaled Y-Axis to show the trend in a format that most readers understand.
The next chart shows that median sales prices are basically flat since 2006.
Income and spending lag:
This chart shows how taxable spending per household has trended downwards in the past decade. The data for this chart is based on retail sales taxes collected.
The blue line shows real median household income while the red line is an indicator of spending per household.
Per Capita Income Trend Is Downwards
This chart has not been updated since 2008 but per WSU’s CORE research report, current per capita income is at 2007 levels. Per capita income is continuing to sink over the long term, relative to elsewhere. The lines in this chart indicate Spokane per capita income as a percent of the average per capita income in the state of Washington (red) and the U.S. as a whole (blue). Over time, the per capita income in Spokane, relative to everywhere else, goes down. Note that GSI will be happy to show you a chart of rising per capita income in the area – their chart is true too. But the problem is that Spokane incomes rise much slower than elsewhere such that over time, Spokane residents fall further and further behind the rest of the state and the country.
The Spokane County GDP per capita is unchanged from 2001 through 2011 (see bottom line in chart) – in other worlds, flat lined, like Convention Center attendance (well, not quite the same – the PFD’s facility usage actually went down over this period):
A chart of pay in Spokane County versus King County
Attracting high skilled talent for high paying job categories is tough due to the large difference in pay between Spokane and the other big city in Washington:
The next chart has not been updated but the trend remains the same today. Incomes in the rest of the state climb twice as fast as those in Spokane. The blue line represents the rate of increase in Washington State; the red line is the rate of increase in Spokane County. Over 30 years, Spokane pay is falling further and further behind the rest of the state.
Transfer payments are now about 23% of area personal income.
Transfer payments are primarily Federal payments made without a contemporary service or product delivered in return. Examples include disability payments, unemployment compensation, Medicare/Medicaid payments, government pensions and other government benefit programs. In other words, almost $1 out of every $4 here is government payouts, not earnings from contemporary work. The problem is not that there are transfer payments – the problem is that the steady growth in transfer payments is not sustainable.
Spokane’s Heavily Subsidized Economy
The primary purpose of the Spokane Public Facilities District, like nearly all municipal convention centers, is to provide a tax subsidy to the local hotel and restaurant industry. This use of publicly funded convention centers as a hidden subsidy of local hotels is widely documented in the convention center industry literature. In Spokane, it is codified – one member of the five member Board of the Spokane PFD is required to be someone working in the hotel industry. There is no requirement that, say, the PFD Board include a member of the general public to represent the interests of Spokane residents and taxpayers (the peons do not rank in this community).
The long vacant Ridpath Hotel may get re-opened and turned into downtown condos some day. But only with substantial tax subsides. About 1/4th of the cost is proposed to be funded by tax credits issued after declaring the not very old hotel as a historic building. The city is also proposing to give Federal Housing and Urban Development grants to the developer. More taxpayer subsidies for downtown.
The proposed Spokane Field House in downtown is an extension of the PFD’s subsidy program to local hotels. Taxpayers will fund a downtown sports complex with the goal of bringing in some outside visitors to fill downtown hotels and restaurants. This is an indirect subsidy to Walt Worthy’s “convention center” hotel across the street.
Indeed, the PFD’s own economic study shows who actually benefits – and its hotels and restaurants:
The sad thing about all these subsidies to the hotel industry is that they do not actually work.
Here is a chart of hospitality industry jobs in Spokane County. After THREE expansions of the Convention Center, we have fewer jobs in the hotel industry than we did in 1999 when we first began expanding the Convention Center!
Hospitality industry employment chart from the US BLS from 1993 to 2014:
The downtown meme of ever expanding public facilities and more subsidies turns out not to have met the original claims for increasing jobs. Today we have fewer hotel jobs and fewer overall jobs in the City of Spokane than before the expansion. Expanding the Convention Center has resulted in FEWER JOBS.
Nothing happens in Spokane unless what are basically the local oligarchs are subsidized by the taxpayers. This is a form of transfer payments from poor people to developers.
Now we hang our hat on future medical school with an exaggerated economic benefit calculation (local promoters nationwide engage in absurd and inflated exaggerations of all economic studies – most of these studies are not worth the digital ink they’ve spilled – same for Spokane). And of course, salvation will come with a heated pedestrian bike bridge!
Spokane needs real industry, designing and building products. From insect traps to pharmaceutical manufacturing to perhaps restoration of the lost high tech manufacturing sector, these are the sectors that generate real growth and jobs. But we just keep subsidizing downtown businesses that fail to deliver on their promises. Always have, and always will. Consequently, Spokane is going no where – the trends all remain negative (see charts above).
The Primary Economic Cluster in Spokane is Land Development
The primary economic cluster of Spokane is manipulating government so land speculators can profit. Here is a quote from Bob Herold of the Inlander:
“Well, I’ve learned that in Spokane, economic development most often begins and ends with making a profit off land speculation. It’s a cultural thing, and government’s job here is to help make the speculation pay off.”
And this business model works well for those who have influence. The largest media operator is one of the largest landowners in the region and has a long history of using their media influence to push government programs that benefit the owners (see The Fancher Report, the non-fiction novel Breaking Blue, or this blog for examples).
Contemporary examples include: repeated Convention Center expansions (and their inability to meet any objectives) the “grand iconic unique in the world (except its not) heated pedestrian/bike bridge, a proposed downtown “trolley” to benefit downtown, the “growing University District” (whose numbers show no growth) and the past and future for a light rail line that passes by the oligarchs’ properties runs from the underused airport to downtown and then to Liberty Lake (remember the two votes on that last decade?)
We cannot draw an accurate long term crime trend chart because of changes made in the reporting system last decade that resulted in a drop in crime reports. We’ll leave this topic with this chart – in 2011 and 2010, the auto theft rate in Spokane was the 4th highest in the nation but dropped in 2012 to 9th place:
A related crime problem is the culture and general corruption of the police in Spokane. A week hardly goes by without yet another police scandal – from having sex on duty to running steroids and drugs to shooting people in the back of the head to killing Otto Zehm. This is likely a symptom of the difficulty in attracting high quality, high performing individuals to Spokane. And that is not just a police problem but one that impacts a wide swath of organizations both public and private.
We end up with local organizations having the same leadership for a quarter century, a sure sign of stagnation. From head dog catcher to GSI to the PFD to the STA -while some organizations are effective, some are not – yet their leadership is held on forever. There is no accountability for the PFD’s failure (by the core metrics of attendees and local jobs) or GSI’s long term ineffectiveness (as seen in the overall local economy numbers).
Bad leaders come to Spokane to retire on the job. And no one cares. In fact, one Washington State labor economist concluded that Spokane attracts unemployed people :)
Youth suicide rate is 4 to 6 times greater than the State of Washington and Washington’s suicide rate is higher than the national rate.
How Bad is the Suicide Rate?
- If Spokane County were a country, it would rank among the top 10 in the world for youth suicide rates in the 15-19 year category.
- In the 15-29 age group, Spokane County ranks 2.5 times greater than the US national average for that age group.
(There are counties, especially with high populations of native American populations living in poverty, such as in Alaska, where the suicide rates are much higher.)
For each successful suicide, there are 7 hospitalizations for attempted suicides, and 15 ER visits for suicide. There are even more cases of depression that result in 9-1-1 calls to the police (but which do not end up in an ER), and even more cases than that of people who never seek help. (Also see these youth suicide statistics). Multiplying that times the rates in the chart above yields a staggering number of severely depressed people in the area. Throw in the reports of bodies turning up in parks and rivers and you get the picture.
Nearby Kootenai County, Idaho has the 2nd highest rate of suicide in Idaho.
The Spokane Regional Health District says health is an indicator of the economy. This is an indicator of despair and hopelessness. And its off the radar as recommendations for reporters discourage reporting of suicides.
Related to the above, the annual days of sunshine in Spokane is on par with Seattle. But don’t tell that to the Spokane Visitors Bureau which believes Spokane has 260 days of clear skies per year!
Telling Outright Lies is the Local Pastime
A selection of prominent lies and the liars who tell them is listed here.
The basic culture of Spokane seems to be based on lies and deceit, causing the area to repeatedly earn a designation as the Scam and Fraud Capitol of America.
The Problem is Ignorance
The long term trend in the Spokane area economy is poor – its been treading water for 15 years.
In spite of much media PR puffery, people have a sense that things are bad. And the data confirm it is a bad situation.
Much of the local media act as cheerleaders, engage in “errors of omission” (a method of telling a lie which fits right into the local culture), and hide poor performance of elected and non-elected leaders. Failed leaders are not held accountable – instead, long term declining attendance at Spokane Public Facilities District is defended and actively covered up by the local newspaper. A decline in airport usage is called “continued growth” – and not one person in Spokane’s media even bats an eye at the egregious lie. Visit Spokane claims it is nearly always clear and sunny in Spokane. A local promoter misquotes a tech industry publication to falsely claim Spokane is a high tech hot spot (when the publication actually said Spokane is NOT a high tech hot spot).
The outright lies and exaggerations are non-stop – hence, Spokane remains the scam and fraud capitol of America – but the zero credibility local media itself is complicit in re-telling and defending the lies (follow the links on this blog to see specific examples of the local media’s participation).
When land speculation is one of the top 3 industry clusters and the media is conflicted with land ownership and development, reporting is warped.
The public has been intentionally kept in the dark as to the true state of Spokane – but many have seen these issues for a long time. Out of town visitors arrive and often the first thing they say is “Spokane looks like a run down dump” (check out the weeds growing out of the streets and sidewalks in August and you can see why).
This blog shed a light on the truth that has been hidden from the public – by showing the actual data, in simple to read charts, that directly contradict the local memes and the local liars. Data is the enemy of the propagandists in the local media.
The X Report
This site will remain on line as “The X Report“, just as “The Fancher Report” (summary here) lives on today, or how local corruption is documented in “Breaking Blue” or at Camus Magazine and other web sites. It is no longer safe to publish skeptical inquiry on the Internet.
Before I moved to Spokane, an old friend who grew up here said, “X, Spokane is just a small town. Only bigger.”
Was not sure what he meant back then – but now I know: And he was right.
Nothing has changed in decades. Three decades of economic studies reached identical conclusions and were filed on dusty shelves never to be looked at again. Spokane remains behind the times, never reaching up to its potential as the 2nd largest city in Washington – but always hoping for an external savior (the current meme is the medical school brouhaha) to drop in and save the day. Before that it was regional health care. Before that Spokane was going to be an information technology center on par with Austin, Texas or may be even Silicon Valley. Before that it was going to be a manufacturing mecca. So we come up with an entirely incoherent cluster strategy for economic growth.
But nothing has fundamentally changed. At this point, its down to more land speculation and more transfers to the oligarchs who will bleed the cash cow dry as long as they can keep it bleeding. And not one god damned local politician gives a hoot at the obvious decay and decline – they just continue to play along to earn bennies for themselves.
And because of that, this might be the very last post on this blog. The web site will stay online and be known as “The X Report”.
This blog is taking a break. No idea if it will return. Hard to imagine but 1/4th of all the posts made on this web site were never published! There are nearly 200 posts sitting in draft form :) They were not published for many reasons including timeliness (the information was useful for a limited time), insufficient time to complete the post, insufficient data, or for a few I feared I would be run out of town if I let them fly. Ouch!