Spokane unemployment rises to 9.0%

As I predicted in August, Spokane MSA unemployment has gone up to 9.0%.

Total Non-Farm Jobs

(Be sure to compare to the US BLS data chart, below, which shows continuing job losses, not the flat line of the State’s adjusted data.)

Spokane Remains in Deep Recession

While the Spokane area remains in a deep recession, the State of Washington as a whole, bottomed in 2010 and has seen healthy growth since. No one has explained why Spokane remains in a jobs recession years after the state began to recover.

The Spokane area economy has not generated new jobs in almost five years (back to 2008). In the context of lagging the state by 3 years (2010, 2011 and most of 2012), Spokane has a failed economic engine.

Chart of Washington State Job Growth

Spokane Area Data Adjustments

As shown two weeks ago, Washington state labor economists adjust the original US Bureau of Labor Statistics provided data, making the Spokane area employment situation look better. Here is the actual US BLS data through July (August is not yet available):

Data for this chart from the US Bureau of Labor Statistics

Oddly, there is a disturbing correlation between the estimated size of the labor force and the estimated number of people holding non-farm jobs. For unexplained reasons, whenever jobs are lost, the labor force simultaneously and magically shrinks as well, helping to keep the Spokane area official unemployment number at a lower level. In fact, the number of jobs in July revised downwards (as of the newest data), but the July unemployment estimate was cut from 8.8% to 8.7%.

As noted earlier in the month, I no longer have confidence in the Washington State ESD numbers and prefer to use the raw BLS data. However, the raw BLS data does not seem to be made available to the public, through their web site, until at least a month or two later.

Transfer Payments Continue to  Climb Skyward

Transfer payments are payments received without a corresponding contemporary delivery of a service or product. These payments come almost entirely from government and include unemployment, disability benefits, government worker pensions, and other payments.  Almost $1 out of every $4 of personal income in  Spokane comes from transfer payments. This either means Spokane has a lot of government retirees (few private sector employers have pension programs, compared to the government), or that unemployment and other factors remain very high in Spokane. From the chart, we can see that transfer payments are rising faster (over time) in Spokane than in the State or the country as a whole. This is not a sustainable economy.

While transfer payments have started to turn down slightly nationally and in the State, transfer payments remain flat-lined in Spokane. Additionally, transfer payments as a percent of personal income have a long term trend of continuously rising as politicians continue to promise free money to buy votes. This is not a sustainable trend nor a sustainable economy.


Wage income is a remarkably small component of Spokane area personal income. Spokane has become a retirement community of old people as shown by the high level of transfer payments and dividend and interest income. More here including comparisons to other regions.


To learn more about the peculiar income distribution (and how low it is) search this web site.

Wages Distribution

Health care and government workers now account for38.5% all wage income in the Spokane area. 4 of the top 5 employers in Spokane County are the government. The government and health care are the majority of the top 10 employers in Spokane County.

The highest paying jobs are in the financial sector.

The industry clusters in Spokane are:

  • Government, 17% of all workers *
  • Plus, the separate but related government category – Military – single largest employer in Spokane County.
  • Health care, 17% (about to overtake government) of all workers *
  • Retail trade, 12.8%
  • Hotels and restaurants, 8.1%
  • Manufacturing, 7.3%

* Footnote: Percent of total wage income is greater than percent of workers because government and health care workers earn more than everyone else (except for finance and insurance, which is a small group). In fact, government and health care workers tend to earn similar (or even higher) wages than in King County while everyone else tends to earn much, much less in Spokane – with pay scales -25% to -40% lower than King County.

Beyond that, the sectors quickly fall to 4% and lower levels.

The above are the five actual (versus fantasized) industry clusters in Spokane.

Do any of these clusters provide a Spokane product differentiation and demonstrate a Spokane-area competitive advantage to other geographic regions?

Comments are closed.