Spokane unemployment climbs from 9.1 percent to 10.5 percent

Source (Washington Employment Security Department – This report is up through January – they will provide a February update in about a week.)

The total number employed is about the same as peak of the year 2000.

Non seasonally adjusted unemployment rate chart for Spokane MSA went from 9.1% to 10.5% while the state as a whole went down from 9.3% to 9.1%.

This late January KXLY news story was off in space: Spokane Economy not good but getting better. On March 4th, KXLY reported that the unemployment rate is falling, based on anecdotal stories. Let’s hope!

The total number of jobs has fallen by 10% over the past decade. In the year 2000, the unemployment rate was about 6.5%; by 2002 it had risen to just under 10%. One would think the actual unemployment rate in Spokane might be closer to 17% today. Who knows?

Washington State, as a whole, is seeing good improvement in the job market. But for some reason we are not seeing this here in Spokane.

Changes in Spokane area jobs

Nonagricultural Wage and Salary Employment in
the Spokane Metropolitan Statistical Area (Spokane County)
Not Seasonally Adjusted/*Updated with ***QCEW Data: March 2010
Change
Prelim Revised Revised Revised Dec-10 Jan-10 Dec-09
**NAICS Industry Title (numbers in thousands) Jan-11 Dec-10 Jan-10 Dec-09 Jan-11 Jan-11 Jan-10
Total Nonfarm 1/ 200.9 205.7 200.1 206.5 -4.8 0.8 -6.4
Total Private 164.9 169.4 164.1 169.9 -4.5 0.8 -5.8
Goods Producing 23.1 23.7 23.2 24.4 -0.6 -0.1 -1.2
Mining, Logging, and Construction 8.9 9.5 9.1 10.0 -0.6 -0.2 -0.9
Manufacturing 14.2 14.2 14.1 14.4 0.0 0.1 -0.3
Service Providing 177.8 182.0 176.9 182.1 -4.2 0.9 -5.2
Trade, Transportation, and Utilities 39.8 41.2 39.9 41.5 -1.4 -0.1 -1.6
Wholesale Trade 9.4 9.5 9.4 9.6 -0.1 0.0 -0.2
Retail Trade 24.6 25.7 24.6 25.8 -1.1 0.0 -1.2
Food and Beverage Stores 4.2 4.4 4.4 4.4 -0.2 -0.2 0.0
General Merchandise Stores 5.7 6.1 5.6 6.2 -0.4 0.1 -0.6
Transportation, Warehousing, and Utilities 5.8 6.0 5.9 6.1 -0.2 -0.1 -0.2
Information 2.7 2.8 2.7 2.8 -0.1 0.0 -0.1
Financial Activities 11.9 11.9 12.2 12.3 0.0 -0.3 -0.1
Finance and Insurance 9.0 9.1 9.4 9.5 -0.1 -0.4 -0.1
Professional and Business Services 20.7 21.2 20.0 20.5 -0.5 0.7 -0.5
Education and Health Services 39.6 40.5 39.5 40.8 -0.9 0.1 -1.3
Health and Social Assistance 33.9 34.1 34.0 34.6 -0.2 -0.1 -0.6
Ambulatory Health Care Services 13.7 13.7 13.6 13.6 0.0 0.1 0.0
Hospitals 8.3 8.4 8.4 8.5 -0.1 -0.1 -0.1
Leisure and Hospitality 18.4 19.2 17.7 18.5 -0.8 0.7 -0.8
Food Services and Drinking Places 13.3 13.7 13.4 13.7 -0.4 -0.1 -0.3
Other Services 8.7 8.9 8.9 9.1 -0.2 -0.2 -0.2
Government 36.0 36.3 36.0 36.6 -0.3 0.0 -0.6
Federal Government 4.6 4.6 4.5 4.7 0.0 0.1 -0.2
Total State Government 11.2 11.2 11.3 11.5 0.0 -0.1 -0.2
State Government Educational Services 6.1 6.2 6.0 6.2 -0.1 0.1 -0.2
Total Local Government 20.2 20.5 20.2 20.4 -0.3 0.0 -0.2
Local Government Educational Services 11.7 11.9 11.5 11.7 -0.2 0.2 -0.2
Workers in Labor/Management Disputes 0.0 0.0 0.0 0.0 0.0 0.0 0.0
1/ Excludes proprietors, self-employed, members of the armed services, workers in private households, and agriculture.
Includes all full- and part-time wage and salary workers receiving pay during the pay period including the 12th of the month.
*Prepared by the Labor Market and Economic Analysis branch using a Quarterly Benchmark process. This process uses
the most recent quarter from the Unemployment Insurance Tax Reports (currently first quarter 2010) and estimates
employment from that point to present.
**North American Industry Classification System. ***QCEW = Quarterly Census of Employment and Wages

Relative wage distribution in Spokane County

Notice anything unusual about the wage distribution in Spokane County?

What this chart shows

This chart is an attempt to capture the relative impact of industry wages, by sector. The normal way of looking at sectors is as a count of total employees in each sector, or sometimes as average wages by sector. This chart is a little different.

The data comes from the WorkForceExplorer. The average wage for each sector, from that data source, is multiplied by the percent of the workforce of each sector.  This weights each sector according to income (or if you prefer, weights income according to sector).

Government and health care combined are just over 40% of all wages in Spokane County. (WorkforceExplorer produces a similar chart as the above but sorts the columns and draws them as a horizontal bar chart. Our brain judges relative sizes in the vertical direction better than in the horizontal direction. When the columns are left unsorted, and drawn as vertical columns, the distribution of wage income is apparent.) The government category, as provided by WorkforceExplorer includes public schools and colleges.

Retail trade accounts for two-thirds the number of jobs found in health care and government but wages are very low. When the impact of retail trade is weighted by the low wages the importance of retail wages falls to a low level considering how many people work in retail.

If you squint at the chart for a bit, you can see that Spokane has two large clusters: government and health care. Plus three small clusters: manufacturing, retail trade and finance and insurance. The latter two are not really competitive advantage clusters – every comparable city has similar sized retail and finance industries.

What does it mean?

It means that the next time some one tells you that Spokane has a greatly diversified economy that its okay for you to ask them how much they have been drinking. There are several groups in town that incorrectly claim the local economy is highly diversified. Perhaps they drink too much 🙂

In seriousness, the chart shows that Spokane does not have a diversified economy. Related:  the incoherent cluster strategy that I have described elsewhere on this web site does not include government as a cluster even though it is the largest employer and produces the largest portion of wages.

Another component not shown is that transfer payments, primarily from government, for unemployment, disability, retirement and other benefits programs are not included. These total almost 20% of all local income. There is not an easy way to include this data in the above chart (we do not know how many recipients there are nor how to split out the portion of benefits that would end up being counted in health care).

If we could include the transfer payments, the top three clusters would be government, health care, and transfer payments. This is no way to run an economy.

What it does not mean – this chart does not directly reflect wages in each category. For example, Management shows up as a small column but the average wage in this category is very high – but has relatively few people working in that category.  Health care and government wages, on average, are slightly higher than the overall average (about 10%), but the relative size of the columns in the chart is due to how many people are employed in those categories.

Update: If the medical school is ever built in Spokane, the economy will become even less diverse as the proportion of income due to health care will rise much higher.

Questions

  • Should we have a diversified economy?
  • Do we want to have a diversified economy?
  • How do we develop a diversified economy?
  • What steps need to be undertaken to diversify the economy?
  • Are government policies enhancing diversity or limiting diversity?
  • What new policies are needed to improve diversity of income sources?
  • Is data, such as the above chart useful for decision making?

Related: