Spokane’s Rogers High School Cybersecurity Team places 4th in the Nation

Arrrrrh! Go Pirates! Rogers cyberteam fourth at nationals – Spokesman.com – April 21, 2011.

The percent of Americans working at jobs plummets

Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.

via More Americans leaving workforce – USATODAY.com.


Our previous coverage on this topic for the Spokane County MSA.

    Charts from that item for Spokane:

    Spokane job losses

    To provide context, I have created a chart illustrating the losses versus the gains in Spokane County.

    There’s more information on this chart, and some footnotes about the data, added to the original post on local large companies that closed in Spokane.

    The blue columns is where we were “a while back” and the red line is where are now with these firms. This chart does not capture all jobs lost nor does it capture all jobs created. Go to the link above for more information.

    The next chart illustrates total job losses versus gains.  Today, we need to create about 35,000 new jobs to put us back on the track we were on up through 2007.

    Local job fair canceled due to lack of employers

    The Review Building in Spokane, Washington

    Image via Wikipedia

    Spokane Community College is canceling its annual spring job fair because their simply wasn’t enough interest from employers.”It’s a little disappointing,” said Robert Foley, one of the fair’s organizers.

    via Employers Not Interested In SCC Job Fair – News Story – KXLY Spokane.

    A copy of the cancellation letter can be seen online at KXLY.

    And homes sales up, but prices down versus a year ago.

    For some reason, this building photo reminds me of this (public domain photo from Lord of the Rings Wiki).

    This image is practically identical 🙂

    GSI goes to DC, SIRTI could be chopped, and we’ll pour more concrete

    Further updates are going to be like these – Twitter-sized and infrequent.

    • (Correction May 2011: The source that provided the information for this item was not correct. As always, if you spot errors on this blog, please leave a comment. Thank you. According to the above, ISR employs about 40 people and is not out of business.) Original incorrect comment: Isothermal Systems Research (aka SprayCool) of Liberty Lake is out of business. At their peak, they employed up to 250 people.
    • GreaterSpokane, Inc (GSI) sent 40+ lobbyists to Washington, DC. Their agenda is to get Federal money for health care, med school, military and pouring concrete. 
    • Med school, Health, med school, ag and energy science, and med school are on the agenda but mentions tech only in terms of seeking a $500,000 Federal grant to keep SIRTI alive…
    • SIRTI is on the state’s chopping block. The Legislature may merge SIRTI with Seattle’s Washington Technology Center.
    • GreaterSpokane posted a blog item where they thought they linked to a web site about the Spokane Waste to Energy web site but instead link to a spoof website. Embarrassing. Again.
    • A proposed electric trolley route for downtown Spokane has apparently been selected:

    • The path serves local power brokers – Cowles, Avista, GU, government, and the health care block. Paid for by everyone except the Kendall Yard’s folks who pay no taxes for 12 years.
    • Pouring concrete to benefit a few smells like a cargo cult. If we pour enough concrete, things are bound to get better! The trolley is effectively a done deal – we are going through the motions of pretending to have public input. Same as the new pedestrian bridge over the railroad. Also a done deal to benefit the downtown core.
    • What is the new South University district? Last year we called this the International District but take a look at the map.
    • Overall Spokane economy sputtering but shows some signs of life. Different parts will have hit bottom at different times.

    Recommendations 2: Part 3 – Wages and pouring concrete

    The Spokane Club at 1002 Riverside, in Spokane...

    Image via Wikipedia

    Local promoters and others present a chart showing that wages in Spokane have risen consistently over time.

    That would be fine except it misses the full story. Unfortunately, Spokane wage growth lags the rest of the State.  By a lot.

    As you can see in the following chart, while Spokane (red line) wages have increased, average wages in the state (blue line) have increased faster. Over several decades, wages in the State have increased at twice the rate of wages in Spokane. Stated another way, the longer we stay in Spokane the further behind we fall.

    Average wages are about 80% of the rest of the State, yet our costs of living are closer to 100%. We have to spend close to the national average to live here (somethings, like health care, are priced higher than the national average).

    From: Spokane’s Economy in Two charts

    The above is still not the full picture. The distribution of wage income in Spokane County is odd as you can see in this chart:

    Source: Relative Wage Distribution in Spokane County

    Most of the wage income is produced by government and health care jobs. This is not a diversified economy, although plenty of reports and promoters claim it is.

    Finally, we see that Spokane has a high poverty rate and it is getting worse – its about 50% higher than the rest of the state:

    Source: Spokane Poverty Rates

    A side effect is that increasing numbers of residents are dependent on the government (other taxpayers) to provide for them such that nearly $1 out of every $5 of income in this county is a check from the government (this does not include government worker wages). This trend is also occurring outside the Spokane area.

    Source: Trend of Transfer Payments in to Spokane County.

    This is not a short term problem.  Low wages and an elevated poverty rate are a chronic, long term problem, described in every economic study, report, and proposal going back at least 30 years.   Dr. Gary Livingston, former Chancellor of the Community Colleges of Spokane, and Whitworth University President Dr. Gary Beck both described this problem in the past year.

    A side effect of low incomes and poverty is that less tax revenue is collected by local government.  Bringing up local wages would result in increased budgets for local government to fund the projects that citizens would like to have.

    How do we solve this? I do not know but I do have an idea of a possible root cause that I explain below.

    Since all of the past plans made the same findings and the same recommendations, should we do more plans? I doubt it.

    Did anyone read the old plans and try to implement ideas from those plans? I doubt it, but if they did, then why have comparative wages continued to slide?


    I do not know and can only make a stupid guess: Do we focus too much on real estate related projects?

    This is just a guess – an idea to think about.

    $3.7 billion has poured into downtown Spokane during the past decade (both public and private $s). Downtown is much nicer than it was. And we are not done yet – there’s big plans for even more spending in downtown.

    • Did this focus on downtown neglect other important improvements?
    • Has this distorted government spending and zoning changes to benefit a few landowners at the expense of many?
    • Buyers of luxury homes in Kendall Yards will not pay property taxes for 12 years. A nice little subsidy from the less well to do in Spokane who still have to pay taxes.  And a nice way to increase downtown land values.
    • Light rail, which was rejected by voters a few years ago, is back in the news again. Light rail projects would tremendously benefit landowners near proposed light rail stations.
    • We’ve built a $570 million dollar freeway to no where – called the North side freeway way up in north Spokane where it goes between who knows what and where ever. It won’t connect to I-90 for at least another 20 years; in the meantime its a great big piece of concrete that is not adding value comparable to its $570 million investment.  That is a big asset that will mostly be idle for 20 more years. When the full freeway does open, Division may turn into empty store fronts just like Sprague Ave did when I-90 was built. For now, this is a very expensive largely unused asset.
    • $191 million has gone in to recent airport improvements where usage has been roughly flat for 15 years.
    • We bought a $95 million remodel of the Convention Center in 2005 and now propose spending another $65 million. Convention center visitors help help create more (low wage) restaurant and hotel jobs  – and increase the value of downtown land.  After the last $95 million expansion, airport usage went down and a big local hotel went out of business.  Read what they are thinking about convention centers over in Tacoma… (I have no idea if this was a good project or not – I am just observing that the benefits might not be as envisioned.)
    • There’s a proposed $8 million bicycle bridge over the railway from WSU-Spokane to the “International district” on east Sprague.
    • And then there’s the proposal to build a new electric trolley car in downtown Spokane. Because downtown Spokane needs more investment funded by a general sales tax increase and possibly a property tax increase for those who actually benefit. Perhaps because so many buildings are empty or in foreclosure?

    After all that spending, wages have fallen further behind. The poverty level has gone up.

    May be this focus on mega real estate projects isn’t working out so well?

    We pour lots of concrete partially because the Federal government hands out a lot of grants for pouring concrete. And we really like to spend money on downtown Spokane, delivering large benefits to a few.  When we spend money on X it means we are not spending money on Y – and around here, Y is everything else.

    (Update: After this blog post went live, a reader passed along some information about “The Fancher Report”. My hypothesis turns out to be very old and was a fundamental finding in the Fancher thesis, written for a Harvard Masters degree in 1977. You can find a summary here and can download and read the whole thesis at the bottom of the page. He found that local interests, notably connected to the Cowles family, had successfully obtained taxpayer funding for programs that benefited a core group of downtown landholders by taxing everyone.  My idea was that our “no go” economy came from malinvestment. The Fancher report explains how that came to be.)

    What if a little bit of this money had been spent on a medical school in Spokane? (I know, we can get grants for pouring concrete but not building medical schools.)

    Or creating the comprehensive research university that local leaders have talked about over and over and over again for 20+ years?

    Or setting up our own fund for local entrepreneurs?  VC money for Spokane area start ups is harder to come by than for start ups over on the coast. Because we don’t have the ecosystem here.

    Perhaps we need to invest in people and ideas, not concrete.

    The 21st century is about creative people building innovative solutions. But Spokane is pouring concrete to recreate a central down town core of a bygone era.

    Pouring concrete creates (temporary) jobs often funded by some one else (taxpayers) and tends to provide big benefits to a small number of well connected locals – and I do not mean just the one landowner that everyone thinks of first around here – there’s more than a few that benefit. Apparently others have noticed this too – darn – I am late again. It is not a conspiracy as some suggest – it is just a well connected group that understandably does a good job of looking out for their own rational self interests.

    Spokane will pour concrete to eternity rather than invest in people and ideas. Think about it.

    Or I could be completely wrong and this idea is nothing more than a stupid guess. But at least it is a different idea than that presented in 30 years of local economic plans (more on this in Part 4.) Spokane is not the only town with these symptoms. A lot of small and mid-sized cities are dealing with this.

    Part 4 – Plans – Aiming High – Seeking Excellence

    • Where “good enough” is no longer good enough.

    All ideas are welcome, provided it does not involve writing yet another economics strategy study that no one reads, and does not involve pouring more concrete.

    Dealing with the State’s budget shortage

    The budget issues and solutions to that generally fall in to either of:

    1. Cut spending
    2. Raise taxes (and fees)

    Or, both.

    The other solution is to get our economy moving again, increasing the number of employed workers, decreasing the number of unemployed, and decreasing the number of underemployed.  Workers earning wages and providing solutions to real problems lead to greater tax collections. We want and need to have all of our human resources put to productive uses and preferably their most productive use.

    How to do that? Perhaps not much can be done in the short term but we will want to ensure that decisions related to (1) and (2) above do not cause harm to long term economic growth in the state.

    Unfortunately, the discussion on what to do about the tax revenue short fall is focused on (1) and (2) without much consideration given to the ultimate solution: getting our economy growing again.

    What do you think? What should we do?

    Update: There is one other possibility: better efficiency. I won’t say much but once upon a time I worked for a bit for a government agency. It was the least efficient and least effective organization I had ever seen and there was zero interest in improving anything to better serve stakeholders. Have we really wrung all appropriate inefficiencies out of our organizations?

    Washington State Estimated Budget Shortfall Released

    The State’s revenue forecast (taxes and fees collected) for 2011-2013 has fallen by $698 M + $80 M. The Seattle Times suggests the two-year budget short fall could exceed $5 Billion. (Corrected: I previously omitted the +$80M).

    You can read the report – its available here.

    A reason for the revenue downturn is perhaps captured in these two charts from the report:

    Washington’s Software technology sector has slowed considerably with annual employment growth rates forecast to reach 5% in 2012,  down from 10% in recent years and 20% at the peak of the dot com boom and bust:

    There are a great many interesting charts in the linked document highlighting many growth areas such as exports.

    Last year’s unemployment rate revised upwards

    The Bureau of Labor Statistics, which revises its data annually, now says Washington’s jobless rate hit 10 percent in December 2009 and stayed there for the first two months of 2010, topping the U.S. unemployment rate.

    Previously, the state jobless rate reported was between 9.2 and 9.5 percent, below the national rate.

    via Business & Technology | State’s jobless picture in 2010 was worse than thought | Seattle Times Newspaper.

    The BLS made an unusually large revision to last year’s unemployment estimates for the State of Washington, now indicating that the unemployment one year ago was worse than then thought. I was unable to readily locate information specific to Spokane regarding the revisions.

    Following chart created by InlandNW blog. Data is from the U.S. BLS except for Jan 2011 from WorkForceExplorer.com which I understand comes directly from the BLS. February 2011 data will be made available next week. In 2005-2006, 2008-2010, the February unemployment estimate has been greater than January. In 2007, the February estimate was less than January’s estimate. Hopefully 2011 will be a year where February is less.

    All of the original raw data appears after the break … if you want to see it.

    Read more of this post

    Latest State Wide Employment Data

    Below is the table of data from the Washington Employment Security Department current through February 2011. WESD will release local area reports, including Spokane MSA, on March 24th. If I had time, I would try to convert this in to some sort of visual representation but alas, I do not have the time this week.

    A summary of the statewide report is here.

    In the table that follows, original report formatting is lost and this may lead to reader confusion. For example, “Manufacturing” is a summary of the next several sub sectors in manufacturing, shown below the row containing “Manufacturing”. Also, this chart shows all sectors tallied for the state. When we get to Spokane, there are significantly fewer sectors than those shown here.

    So that this web site is easier to read, the data table appears after the break  – click on the Read more link to continue.

    Read more of this post

    Update: Major tech/manufacturing firms leave Spokane

    I previously documented what happened to a large number of high tech and manufacturing firms that left Spokane during the past decade, as well as during just the past two to three years in “Major manufacturing and high tech employers close, leave Spokane” which provides a long list of firms that closed or downsized.

    The Spokesman-Review today looks at what happened to some of the workers who used to be with Itronix (closed) and Agilent (closed) with anecdotal stories.  See Two years later, Spokane’s laid-off tech workers regroup – Spokesman.com – March 13, 2011.

    Be sure to read the comments that readers have added to that story. Readers are saying the same things reflected in the data collected on this web site.

    Some engineers have retired. Some have moved outside the area. Some found telecommuting work elsewhere. Some switched to other fields, with lower incomes. Some are involved in start ups here.  Some have returned to school.  Many suggest they would have moved elsewhere but were stuck due to family obligations or because of difficulties selling their home.

    From a local economy standpoint, the start ups that may have been spun out of these losses are the best opportunity to translate the tech down slide into a longer term upside. I thought this was a positive story but then I read their “related” story … ugh.


    The SR has a companion article “Area companies gained tech skills” that can only be described as Orwellian BS.  This revisionist article, based on anecdotes, implies we’ve only lost around 500 tech jobs. Which is misleading by setting the start of the downsizing to just a year or two ago – and goes against other SR reports that peg total losses at about 20,000 during the decade. But from that false premise they can then lead to a positive outcome.

    They quote a local economist saying he’s “seen data” (secret data?) that shows tech companies “adding plenty of jobs in the past 12 months”. Doesn’t show up in the WorkForceExplorerc.com data which has been updated through January 2011 by the Washington State Employment Security Department. Tech jobs are likely to show up in the big category of Information (software is a tiny subset) and Professional and Business Services (again, a subset) or in Manufacturing. Let’s take a look at the charts through January 2011:

    The news story is one of the most misleading pieces of reporting I have  seen in the Spokesman-Review in quite a while. Which  is why I try to always link to the original data. I do not make up the data. Anecdotal stories can be helpful to understand the narrative but they usually need to agree with the data.

    A commenter claims that the Washington State data is simply all wrong. But in addition to the above industry sector charts, total jobs remain way down since 2007. I am sorry that the data is ugly.

    A future post will discuss the common practice of “hide the decline” with examples and naming the organizations that do it. But part 1 will highlight some organizations that are honest and go out of the way to make their data accessible and presentable for the public. They are to be commended.

    Boeing plans single “supersite” for future jet construction

    Spokane leadership should investigate how this area could become a key supplier to Boeing’s future projects. Boeing wants to consolidate suppliers within a smaller area versus its current and trouble prone global supply chain. We hope that Boeing chooses Washington State for this proposed “supersite”:

    Crucially, the new plane’s supply chain will be radically different from the Dreamliner’s — most likely a cluster of major supplier plants near Boeing’s final-assembly site.

    Such a supersite would transform the manufacturing landscape of this state — or another one, if Boeing chooses to go elsewhere.

    via Business & Technology | Boeing considers ‘supersite’ of plants for new jet | Seattle Times Newspaper.

    The “best” location could hinge on whether future aircraft are primarily composite construction or aluminum alloy construction.

    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
    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.


    • 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?


    The drop in the labor force participation rate

    I noticed something interesting in this chart from CalculatedRiskBlog.com that I posted a few days ago. (This is not specific to Spokane.)

    Look at the vertical ovals I have added to the chart. For all post 1970 recessions, the labor force participation rate kept increasing. But look at what happened right around 2001- the labor force participation rate fell and has continued falling. This is a major and significant change in direction.

    With fewer people participating in the work force, are we less productive as a nation? Has automation replaced so many workers that we can achieve the same productivity with fewer workers?  Wouldn’t we be even more productive, as a nation, if we could put these displaced workers back into productive activity?

    CalculatedRisk suggests the drop is due to demographic changes. The leading edge of the “baby boom” has already begun retiring.

    Amazon.com has 1,900 job openings – in Seattle

    Consider Amazon’s online jobs board: It lists about 1,900 openings in Seattle, at least twice as many as a year ago. More than 900 call for techies.

    via Business & Technology | Amazon.com on a hiring spree | Seattle Times Newspaper.

    Unemployment data update (U.S.)

    Yesterday, the BLS announced a slight drop in unemployment. As always, it helps to look at the data, not just the headline number.

    Unemployment dropped, in part, however, because the workforce itself is smaller – that is, the “labor force participation rate”.  We want to see the black line, below, rising. This is a recession lagging indicator and generally rises after the downward trend of the recession has ended. At this time, the employment-population ratio is at a level seen back in 1978. The participation rate itself is indicated with the bright blue line – that too is still falling.

    The unemployment rate can go down, in this situation, because in part, the participation rate is falling. In English, that means fewer people are looking for work, perhaps because they have given up for now. A lower participation rate also means that our economy is not functioning at its potential maximum capacity – literally, we have resources sitting around not being used.

    On the other hand, we need to look at the detailed breakdown of what jobs are increasing and which are decreasing. I have not had time to do that. I have heard that factory and construction jobs have increased, which would be good.

    Washington’s Workforceexplorer web site will have updates twice in the next few weeks with local data.



    Average work hours, per week, remain low. This means more people have part time jobs or reduced work hours – More information on historical average work weeks is here.

    Seasonally adjusted hours series from the Current Population Survey.

    Spokane County’s Working Population Decreasing

    Data Source: US Census, Washington State’s WorkForceExplorer.com. The lines are poorly labeled: “Pop” refers to the total population of Spokane County and “Annual” refers to the number of non-farm employed or roughly the total number of people working. While the population has gone up, the total number working has gone down.

    The next chart converts the above into a percentage. At the present time, the total employed has fallen to less than 44% of the Spokane County total population. This drop means either there has been a sudden influx of very young people (children) or a sudden increase in the retired community – or a lot of people have given up trying to find work. Considering that the drop occurs simultaneous to an economic depression, it seems likely this is due to the actual loss of jobs.

    The data come from the State’s WorkforceExplorer.com web site and is based on the number of non-farm employed. (Farm labor in Spokane is negligible.) The totals do not include the self employed, sole proprietors and active duty military.

    The chart that follows shows the percentage that is now employed dropping sharply from 2007. The X-Axis is missing but runs from 2000 to 2010.

    This item may relate to the item, below, that finds 20% to 23% of the Spokane County population will be age 60 or over by 2020.


    Spokane County Population Distribution as of 2000

    CensusScope — Population Pyramid and Age Distribution Statistics.

    Note the “double bump”. The bump between 35-54 is the post World War II “Baby Boom” effect, and the second bump is the “Baby Boom Echo” effect as those in the first group had their own families.

    About 2.5% of the population in the year 2000 is age 80 or greater. This impacts the prior item on this blog, which estimated that 20% of the population will be in the age group 60 to 79 by 2020.

    Spokane becoming major retirement community

    By 2020, 20 percent of Spokane County residents will be age 60 to 79, up from 14 percent today.

    via Home prices still falling from bubble.

    The above estimate of 20 percent is for those aged 60 to 79. As of 2000, about 2.5% of the population was over the age of 80 and that too will likely grow. Let’s assume 3%, meaning that by 2020, 23% of the population will be age 60 or older.

    Guessing: Transfer payments probably climb to about 23% to 25% of Spokane County income by 2020.  For more on that, see “Trend of transfer payments into Spokane County.”

    As this shift occurs, there will be a smaller percent of residents available for working in industry, including manufacturing, research and development and service industries. This implies a further shift towards a Spokane County based primarily on health care and government (including education) and low wage recreation, leisure and food service industries – and less so on manufacturing, industry services, R&D and an innovation economy.

    What percent of this shift in population is due to old people moving in versus younger people moving out?