“Spokane is a great place….Things are good in Spokane.”
November 20, 2011 Leave a comment
We wish it were true!
But back in the reality-based world and this last post on this blog … by the numbers, Spokane is not getting better, it continues its long downward slide.
Spokane’s Economy In Easy to Read Charts
For decades, wages in Spokane have grown at half the rate of the rest of the state, falling further behind every year. Spokane wages average about 20% behind the rest of the state. Government and health care workers make close to King County wages – but everyone else here earns much less than the -20% wage differential implies.
Every year, Spokane residents fall further and further behind their counterparts in the rest of Washington and in the nation. This chart shows that Spokane per capita income was at 90% of the State’s level in the 1970s, but has declined to less than 80% of the State’s level by 2008 (the orange line). In 2010, average wages rose 2.7% nationwide, but rose only 2.3% in Spokane County. Stated another way, average wages rose 17% faster everywhere else while and Spokane residents’ income fell relative to everyone else.
The next chart highlights the wage differential for those working in higher skilled jobs in Spokane. Education and health care, which are shown, are similar to King County. (Government wage data was not available for this specific comparison). As we move to the right into higher skilled jobs like manufacturing, finance and engineering, the wage differentials are enormous. Spokane will never attract a national or world class high skilled workforce when wages in Spokane are up to 50% less than across the state. Which is why the State and local power brokers have identified Spokane as the low wage, low skilled industry cluster for the state.
Tons more data after the break …
Transfer income comes mostly from the government, in the form of unemployment, welfare, medicaid, disability and pensions (original posts here, with updates through 2010 in chart below). This not a sign of a booming economy but of a tanking economy.
Regarding Spokane and Kootenai Counties: “Individuals in both counties received more in federal individual transfer payments than paid in personal income tax and social security contributions” – EWU Study. This is not sustainable and things that cannot go on forever, won’t (Stein’s law).
Wage income is concentrated in three areas – health care and government/education shown in the chart, plus almost $1 out out of every $4 of personal income is from government transfer payments. Come to Spokane only if you are retired or working for the government or health care.
Nearly all the jobs created over the last decade have been lost. About 10% of non-farm jobs have been lost which makes the current 8.6% current unemployment rate laughable – the unemployment rate hit 5- 6% at the peak in 2007 – now add 10% jobs lost to get a realistic portrait of Spokane’s unemployment at 15-16%.
The “unemployment rate” is mostly irrelevant – the count of jobs is what matters as people working make the nation productive. We need all of our people resources at work to enable peak output from our economy. Today we have just over 200,000 jobs – but 5 years ago, they thought this chart would be showing 225,000 to 230,000 non-farm jobs today!
And this chart declines after the completion of mega-projects like the convention center expansion, airport improvements, fairground and expo center upgrades, and a big concrete freeway from nowhere to who knows where. Promoters of these taxpayer funded concrete pours promised the creation of thousands of new jobs – but from the chart, it is clear that they lied to us. Now they want a downtown electric trolley funded by taxpayers to enhance downtown real estate interests – and of course, this will create lots of new jobs! Liars.
Just 36% of Spokane high school seniors take the SAT exam compared to 57% statewide. With this lack of ambition and educational attainment, Spokane’s work force is weak. And one-third of surveyed high school students say they get drunk frequently. Not surprisingly, the State and Greater Spokane, Inc have identified Spokane as the place for low skill, low wage call center, warehousing, trucking, insurance claims processing and regional retail and postal sorting center jobs.
Spokane is becoming cut off from the world of commerce by a large decline in non-stop air travel destinations.
Airport as a Regional Economic Proxy
The airport acts as a proxy for the regional economy. As we can see, there are fewer passengers at Spokane “International” Airport than there were in 1996. Portland, Seattle and Vancouver, B.C. have had healthy growth in passengers, unlike Spokane. Don’t blame the national economy.
Felts Field Airport is another proxy indicator for how Spokane is doing and flight operations have crashed:
Spokane Valley office/retail vacancy rate now at 24%
Feb 2012 Update: 1 in 4 buildings are empty. See last line of this news article (bad news is always buried in the last sentence in Spokane media – and be sure to watch the embedded TV news video which spins so hard you’ll need motion sickness medication):
- Downtown Spokane: 17 percent or 25 percent (watch the linked TV news report – both numbers are given)
- South Hill: 12 percent
- North Spokane: 21 percent
- Spokane Valley: 24 percent
Some of those numbers depend on who is counting or who gerrymanders the lines about neighborhoods. Downtown Spokane has entire blocks of empty or nearly empty buildings that are not included in the official “downtown” vacancy list.
In the above linked TV news report, Rich Hadley, CEO of Greater Spokane Inc says that everything is fine. Unbelievable and perhaps a clue as to the root cause problem in Spokane.>
Home sales are less than they were in the year 2000! (The Y-Axis is a logarithmic scale that distorts the drop in homes, making the drop look less bad.)
The chart on the left shows the percent of Spokane area homes built in each 20 year period. The chart on the right is the same, but for Vancouver, WA. Which economy has been growing and moving ahead? Hint: Not Spokane – modern home building is way behind nearly every metro region in the State.
- Spokane has the worst commercial real estate vacancy rates of all cities rated by OfficeSpace.com as of Nov 5, 2011.
Sadly, Spokane suffers from a high suicide rate from despondent people who feel trapped by helplessness. This is the saddest data point for Spokane.
- 1 out of 4 child care centers have closed since 2008 and those that remain have shrunk in size. With one or both parents out of work, third party child care is no longer need.
- Spokane’s Hillyard neighborhood has one of the highest rates of poverty of any zip code in Washington, and is worse than 91.2% of U.S. neighborhoods.
The Root of the Problem
The root of the problem is the culture – a culture resistant to the change needed to stay on the front edge in the 21st century. Spokane leadership remains stuck in 1911 and preserving the status quo of the power structure. The community itself is mostly concerned with surviving and is not excited about the change needed to embrace opportunities.
Few care about the economic decay around town. We just pretend the problems do not exist. The former CEO of a Spokane promotion group wrote a Letter to the Editor (November 3, 2011), in opposition to a local group that has odd ideas to turn Spokane into Berkeley, CA. His comments are in that context but are revealing:
Which is quite a contrast from what the data show.
I started this web site to log what I learned. All those in positions to do something about the problems already know or should know. Numerous official data sources document the problems. Every economic strategy plan produced during the previous 20 to 30 years came to the same conclusions as this blog.
The local lifers need to get out of town a bit. Spokane is in its own world of hurt because of bad decisions and a denial that anything is wrong here – but things are good, of course! Travel around the state – other cities are not filled with vacant buildings like those that line our streets.
The second problem is poor leadership. Spokane does not attract top people and the smart one’s leave. There are too many local examples to list.
The third problem is that the community is some what oblivious to the decay, thanks in part to a happy talk local news media incapable of presenting an accurate and contextual picture of Spokane. This likely relates to the culture – those who ask questions will be not be tolerated in Spokane.
The fourth problem, noted elsewhere on this blog, is that Spokane is controlled by a small group of legacy multi-generation wealthy families who look out for their own rational self interests at every opportunity. This results in pouring concrete as the way to solve any problem, when it mostly just enriches the legacy wealth.
The people of the Spokane area deserve a lot better from their political, business and community leaders who have been failing for decades.
Spokane Is a Zombie Town
This web site began out of a curiosity as to why many local companies moved out of Spokane.
And the answer is: Spokane is inhabited by Zombies who chase anyone with brains, out of town. Have a nice day and watch out for the Zombies!
After the break, more charts, links to data, quotes from others that see the same things I see, and general leftovers, all poorly edited. We are outta here. Spokane has become a Zombie town, not yet Detroit but top people are working to catch up with Detroit. If you’d rather read something funny, read how Spokane will develop a creativity based economy!
Through much of this web site’s existence, many people landed here after searching for information about 4G cellular or Trader Joe’s. As of Fall 2011, most people now land here when searching the net for information about the Spokane economy, unemployment, suicides, police shootings, high school dropout rates, SCC’s unaccredited nursing program, Spokane business closings, Spokane’s loss of tech companies, Spokane incomes and so on. In other words, a lot of people now know about Spokane’s economy and wonder “Why?”
This is now a dead, Zombie web site. Not any point to more updates. We’ve given up on Spokane. Bye!
Comments will be disabled.
This section repeats some of the above, with links to the original sources, and various junk saved from the cutting room floor. But who cares?
Proxy Measures of Spokane Economy
What they originally forecast for Spokane Airport (red line) versus actual (blue line) – wishful thinking did not help:
Housing Proxy Measure
- Vacant buildings, offices and retail strip malls everywhere except not so much on South Hill, which is in its own little world. See Closed for Business in Spokane.
- Who lives in Spokane, as determined by Zillow.com – “Ramen Metros”, “Stretched Budgets”, and “Wise Old Urbanites in old houses”. Mostly poor people.
- High poverty rate relative to the State. A different chart here.
- “The (problem of not being ready for school) is a significant reflection of poverty in this area. And candidly, our community is getting poorer, not wealthier.” – former Community Colleges of Spokane Chancellor, Dr. Gary Livingston.
- Beck Taylor, Ph.D., President of Whitworth University notes that some of the poorest communities in the State are in Spokane.
- 1/3 to 1/2 of Spokane-area school students qualify for free or reduced price school meals – a standard proxy for poverty. And this group has dramatically increased in size over the past ten years – its not due to the current national economy. It is a sign we “are getting poorer“.
- Percent of Spokane County residents receiving Basic Food Support: 108,413 people / 465,000 (2010 DSHS data) or 23% of the population or 1 out of every 4 people. Food support includes school meals or discount meals, food stamps, and other aid including low cost phone service and WIC aid.
- Half of births paid for by Medicaid – and growing … a sign of increasing poverty (communityindicators.org)
- Could write about crime here – but local crime data is a mess and we cannot draw useful trends about overall crime other than it is worse in Spokane than the rest of the State.
- In 2010, Spokane had the 4th highest rate of auto theft in the nation.
- The Spokane Police Department is a mess. This is not a blog that covers police so you will have to look that up on your own. Spokane Police incompetence, abuse and corruption are well documented. Until 2008, people who complained about police behavior were sued for defamation by the City of Spokane.
- Spokane was ground zero for pedophile Catholic priests abusing children, and is most famous for Kevin Coe and Robert Yates.
- Forbes Magazine, three times, calls Spokane the Scam and Fraud Capital of America. Corruption and incompetence are everywhere.
- 10% of jobs lost over the past decade. 13+% below where we thought we’d be today. This chart is from the U.S. Bureau of Labor Statistics and shows the total number of non-farm jobs (does not include active duty military and self employed). A decades worth of job growth has been lost:
- Major high tech employers close up or move out, leaving a tech Zombie town behind. From 150 claimed “high tech” companies – down to 15.
- Greater Spokane, Inc, promotes the area for its low cost – as a third-world low cost provider. A company named “Rural America Onshore Outsourcing” actively recruits in Spokane offering “Competitive Rural Market Rates Paid” a.k.a. low wages – no college degree required!
- “It is safe to assume that we’d have better-paying jobs and quality high-tech jobs if the national job market thought we merited them. But when our industrial recruiters present our case, we are often found wanting. Rather than blame the recruiters, we need to look seriously at improving the case they have to present.” and “We should establish a publicly funded, joint city-county Office of Economic Statistics to develop an impartial, reliable, ongoing metrics for planning rather than public-relations purposes” – Shaun O.L. Higgins, former Director of Marketing for the Spokesman-Review. (Emphasis added.)
Workers and Wages
Comparison of average weekly wages versus those in King County. Spokane area education and health care workers are on par with King County. High tech workers make less than half what they make in King County. Spokane will never attract national or world class workers needed to have a tech sector in Spokane when the pay averages half that of across the state.
As to finance and banks – you get what you pay for – most of the local banks wiped out their shareholders, were shut down by the government, went chapter 11, are operating under government consent decrees or sold out to someone else.
- Chart above shows Comparison of wages between Spokane and King County. Government and education workers earn about the same as those in King County. Health care workers about 10% less. Private sector workers make about 25% to 50% less than those in King County.
- Comparison of inflation adjusted wages in Washington. Spokane is the Red line. After inflation, Spokane median wages are back to 1980s levels. More here.
- Transfer payments, government/education salaries, plus the government’s share of health care, is around half of all personal income in Spokane. The growing dependency on the government cannot go on forever. Things that cannot go on forever, won’t (Stein’s Law).
Where the jobs are in Spokane
- Health care, government/education, retail and restaurants plus call centers, warehouses and trucking. And why the future looks glum for residents not working in government or health care jobs.
- 80% to 92% of local community college students need to take remedial math at entry – compared to 60% nationally.
- Up to a third of Spokane high school students drink heavily.
- 36% of Spokane County high school seniors take the SAT compared to a statewide average of 57%. There will never be a competitive local economy with this poor level of educational attainment and lack of ambition. This is not a competitive work force – except for third world wages and low skilled jobs.
The State’s 57% level would be about here –> ———————– <– if shown on the chart. This is really bad.
WSU-Spokane is the only branch campus to see a decline in enrollment. More here. You can learn more about that topic here. Update: As of the Fall 2011 data, WSU-Spokane has a total enrollment of 1,254 students or about 40 more than the Fall of 2010, but still below the peak a few years ago. At WSU-Spokane, 75.6% of the students are women compared to 51.6% in the entire WSU system.
- The tech sector went from a claimed 150 companies down to 15.
- Local patent production fell a remarkable -75%.
- Where thriving economies are moving up the value chain, Spokane is moving down the value chain. Other than health care, our future is in call centers, warehousing, distribution, trucking, retail, restaurants and hotels. Third world, low value, bottom of the barrel stuff. This is be design – it is codified in to the State’s industrial cluster plan for Spokane.
- Dishonesty and hyperbole, telling outright lies, and fantasy press releases.
- Greater Spokane Inc’s idea of engaging with social media is to censor comments posted on their Facebook page that do not promote local myths. Innovative!
- Spokane is a City on the Move! Too bad about the direction!
- Another look at Spokane Employment / Unemployment data (inlandnw.wordpress.com)
- Where does Spokane area personal income come from? (inlandnw.wordpress.com)
- Spokane Real Estate Sales Trends (inlandnw.wordpress.com)
- Spokane North Corridor Half Billion $ Boondoggle (inlandnw.wordpress.com)
- Spokane’s economic plan du jour (inlandnw.wordpress.com)