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Spokane Area Economic Update Charts

(Update: By request I have turned comments back on for some recent posts. They were turned off, mostly, a year ago, since I spend little time on the blog now, and comments require monitoring. Hope that helps and thank you for your suggestions, ideas and corrections.)

The State’s “adjusted” employment data for Spokane County (thru November 2012) shows an upward spike:

2012NovEmployment

The US government’s Bureau of Labor Statistics “raw” data for Spokane County  (through November) shows a subdued seasonal rise in jobs. (Data is from the US BLS “One Screen” database). In a traditional post recession recovery, we should be seeing a job growth rate similar to how it was before the recession took hold (pre-2008).

2012NovBLS

Hospital, Manufacturing, Education, Convention Center Attendance and More, after the break …

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“6 Things That Can Kill Your City’s Startup Community”

6 Things That Can Kill Your Citys Startup Community.

The co-founder of TechStars explains why communities fail to have an entrepreneurship community. He lists six broad categories that hinder startup and economic growth – and incredibly, Spokane ranks high on all six categories (most of which have been previously written about on this blog – See the History of Spokane Economic Plans and Recommendations, in links to right of this page).

This seems a reasonable summary that matches up with Spokane and may give hints as to how to overcome the problems …

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Resources

Independent online resources where you can monitor the long term trends yourself. They have the data used in the charts on this web site, and often have the same charts too.  This blog has brought up nothing new – everyone else knows what is going on!

Due to a recent Court ruling in Oregon, I may take this entire web site offline in the future. If the government provides more First Amendment protections to “journalists” than to citizens and the government decides who is a journalist, then what happens to the First Amendment  freedom of the press concept?  Basically, the First Amendment is thrown away as the government selectively choose who is a journalist and who is not.

“Spokane is a great place….Things are good in Spokane.”

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 …

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Comparison of average wages between Spokane and King Counties

A sample of job categories was selected from the Workforce Explorer web site for Industry Trends. A few were dropped out because the job category did not exist in both counties.

  • Most Spokane County workers are paid less and professional high skilled private sector workers are paid a lot less.
  • While we have come to expect lower pay in Spokane, some of the differences are shocking.
Table of average wages in $s in Spokane versus King County. The difference is shown in the right most column. Bright green is higher. Dark green is “close”. Bright red is -24% or worse difference.
Occupation Spokane King County Spokane Pay
Public Schools/Education
Teacher 33207 36051 -8%
Elementary Teacher 58227 55921 4%
Education administrator 100703 102037 -1%
Government workers
Firefighter 61987 72591 -15%
Police and Sheriff 64560 72205 -11%
Zoologists and wildlife biologists 57261 62254 -8%
Health Care
Pharmacist 107792 95782 13%
Registered Nurse 65735 77800 -16%
Physician assistant 88684 100508 -12%
Dentist 147660 159630 -7%
Nursing aides 24342 30917 -21%
Private Sector Jobs
Science and Technology
Industrial engineer 69391 83122 -17%
Mechanical engineer 62946 82890 -24%
Software engineer, apps 70504 94071 -25%
Software engineer, systems 74135 99318 -25%
Computer programmer 54288 95782 -43%
Chemist 50917 73321 -31%
Chemical technician 38653 35160 10%
Law & Business
Lawyer 90215 118674 -24%
Paralegal 35344 53588 -34%
Marketing manager 108781 125807 -14%
Sales manager 82235 119374 -31%
Advertising/promotions manager 48198 101550 -53%
Architect 83145 72237 15%
Editors 58218 61492 -5%
Reporters and correspondents 40346 54105 -25%
Labor
Roofer 35953 46263 -22%
Truck Driver 39584 43626 -9%
Sheet metal worker 35946 57792 -38%
Cooks, all other 23731 29322 -19%
Retail sales 21486 24151 -11%
Bus and truck mechanic 42489 51252 -17%
Hairdresser, stylist, cosmetologist 33459 32702 2%
Mobile heavy equip. mechanic 41968 59303 -29%

Wage data from the State’s Workforce Explorer Industry Trends section.

What It Means
  • Education sector pays about the same.
  • Government and health care pay some what less.
  • Private sector highly educated workers are paid remarkably less.
  • Those considering moving to Spokane need to consider the income ramifications of their career sector.
  • At present pay levels, there will not be a science or technology cluster in Spokane. With extraordinarily low pay, Spokane will have difficulty attracting high quality scientists and engineers needed to create a regionally or nationally competitive science and technology cluster.
  • At present pay levels, the same issue impacts creation of national classes businesses.
  • “Editors” average is about the same in both counties. This may account for why there is little news coverage of the chronic low wage problem in Spokane – low wages do not affect them!  But reporters’ pay – ick!
Would be interesting to compare pay scales to Benton-Franklin counties, and to Clark County (Vancouver, Wa) area.

Related articles

Spokane’s economic plan du jour

Picture of the Duncan Garden at Manito Park an...

Image via Wikipedia

Spokane’s future industry clusters:

  1. Retirees and transfer payments
  2. Health care services and health care academics
  3. Government, including education
  4. Manufacturing
  5. Low skill, low wage categories including retail, restaurants, hotels, recreation, trucking, warehousing.
  6. Various small categories including low skilled and high skilled workers.

Categories 1, 2 and 3 will account for 60+% of the local economy. Here’s the number of workers, per category, flipped from horizontal to vertical to present the relative size differences.  Retirees and transfer payments are not shown in the chart but would be in the top 3.

Here is the impact of transfer payments. As you can see, transfer payments are a large component of the local economy. For more information on transfer payments please see “Trend of Transfer Payments into Spokane County“.

Data Data from washington.reaproject.org

Retirees

Previously, many people retired from Southern California and took their large real estate capital gains to low cost Spokane. That source of retirees is diminished due to the housing collapse and its return in the future is not predictable. This is an important driver for health care, housing and service sectors.  Inbound migration may be at reduced levels for a long time.

Clusters

The State adopted an industrial clustering policy where the state selects the industry clusters to be supported in each region. The primary clusters for Spokane are health care, education, and trucking and warehouse operations. Manufacturing has been in a slow national decline for 30 years.

Health care is on a growth streak due to retirees, a doubling in individual use of medical services over the past 30 years, and more recently by expectations of “ObamaCare” leading to an expectation of increased demand for services primarily paid for by someone else.

Risks

The loss of retirees from Southern California produces risks to the area’s current strategy and may be why the 2011’s local economy continues to remain stuck well below 2007 levels. On the plus side, the nation’s overall large “baby boom” approaches retirement years. However, where they choose to settle in their retirement years will have a big impact – and some think relocating as part of retirement may be thing of the past, not of the future.

There is a risk that the health care act might not play out as expected. It is possible that court challenges may limit the growth in the health business sector.

There is a risk that shifting more money into health care services without addressing the exorbitant prices charged and excess consumer demand for health services paid for by other people means less money for the production side of the economy. This is not a sustainable path.

Spokane’s future is based on retirees and health care – but that future has risks. And a big risk is there is no plan B.

Low Wages Are By Design

Greater Spokane says our region’s primary competitive advantage is low wages and low land and housing costs (or stated another way, poverty). Per Greater Spokane, our region’s competitive advantage is low prices. And no one in power wants that to change.

Spokane will be the state’s low wage, low cost housing and low cost land destination. This appears to be by design.

Outside of the key clusters, wages and opportunities will be limited.

The substantial quantity of data collected on this web site, and reviews of all the economic plans going back to the 1980s show that the chronic low wages and limited opportunities are endemic to Spokane. Every one of the plans mentions these problems. These problems remain because not many people want to embrace change – low wages are a feature and are by design.  The area is settling into a future as a comfortable government-funded enclave of government and health care workers, and retirees collecting benefits.

Everything on this website has been mentioned before, often many times, in prior economic studies about Spokane. What I present on this website is not my opinion but is backed by data and numerous studies. This view is shared by business leaders of the past, by various politicians, current and former academic administrators and many more. The data tell this story, not me.

Why?

See the recommendations links at the right of this page. Lots of bad decisions were made in the past.

Hiatus

It’s been an interesting experience to go from wondering why so many businesses disappeared to finding out what really happened. The answer was not at all what was expected.

Unfortunately, no one cares. It’s always been this way in Spokane. As a friend said to us in the 90s, “It’s just a big small town, only bigger.” So true. (Well, at least one other person gets it…)

And nothing will change.

This web site will now be updated primarily for major events or changes.