Hospital-sector recession looming?

The two primary industry clusters in Spokane are regional health care delivery and government.  Nationally, the health care sector is seeing signs of an industry recession and layoffs.

The Harvard Business Review thinks the growth in health care jobs is about to halt because the health care industry has been adding jobs faster than it is adding patient volumes – leading to long term, year over year declines in productivity.  A long term year-over-year productivity decline is not sustainable.

This change has apparently already started and could have impacts on Spokane with its over-sized health care sector:

Hospitals, a reliable source of employment growth in the recession and its aftermath, are starting to cut thousands of jobs amid falling insurance payments and in-patient visits.

via Layoffs reflect hospital recession | The Clarion-Ledger | clarionledger.com.

Potential reductions are not a certainty but are a possibility.

The following chart illustrates the dramatic impact the health care sector has had on Spokane County employment. Watch the blue line near the top. If the recent decline were to accelerate, per the above linked news report, this would be of concern to the Spokane area.

image002

 

The next chart is from the Washington Employment Security Department. Their horizontal chart has been flipped and rotated into a vertical format as it makes the sector size comparison easier for us humans. As you can see, the health care sector is the largest single employment sector in Spokane County.

2013MaySectorEmplRotated

 

Washington State July unemployment rate increases slightly

The statewide unemployment rate increased slightly to 6.9%.

So far, Washington has recovered about eighty-three percent of the jobs lost during the recession.

via July unemployment rate inclines slightly, while jobs continue to climb.

While the State recovered 83% of jobs lost, Spokane County has recovered just 36% of jobs lost.

Data from WA ESD June employment table:

  • Lowest June employment during downturn was 206,100, highest June reading reached previously was 221,400.
  • A total of 15,300 jobs were lost between the highest June and the lowest June employment levels.
  • As of June 2013, there are 211,600 jobs for a gain of 5,500 since the lowest point. This represents a recovery of 36% (5,500 / 15,300) of the jobs lost.

Spokane County job growth is just under half that of Washington state.  No explanation has been offered as to why that is happening.

“Encouraging signs emerging from Great Recession”

From airplane parts to medical devices, cookware, pharmaceuticals and mining equipment, factories across the region are collecting contracts that square with the national trend of burgeoning productivity.

Even though manufacturers rely more and more upon automation and greater productivity from every worker, hiring is on the rise. In Spokane, for example, there were 15,325 people employed by manufacturing firms in December, the most since late 2009.

via “Encouraging Signs Emerging from Great Recession”, Spokesman-Review.

It’s a rainy morning and unfortunately I have not yet forgotten how to make a chart. So let’s chart some actual data!

Historical Manufacturing Employment in Spokane County

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“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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Low demand for highly educated, high skilled workers in Spokane

As shown in the post, below, pay for high skilled private sector workers in Spokane County (law, business, science and technology) is surprisingly low.

What It Means

  • The demand for high skilled workers in Spokane County is low.
  • There are about twice as many people with a 4-year degree as there are job openings needing a 4-year degree qualified worker*.
  • There are about three times as many people with graduate degrees as there are job openings needing a graduate degree qualified worker*.
  • The low demand for highly educated workers in Spokane is a likely reason wages for the highly skilled are so low.
  • About 2/3ds of the job openings require a high school diploma or less.

Chart comes from the Community Indicators of Spokane.

Besides the “Recommendations” posted in the right most column of this web site, what else might be done to create an ecosystem demanding higher skilled workers in Spokane?

Update: Local PR news article refers to Spokane as a “blue collar city”, which helps to explain the low wage issue. This article is part of a lobbying effort to continue receiving a 30% taxpayer funded subsidy to movie makers in Washington. For amusement, see how the local TV news hacked this story down to a few meaningless sentences. Funny.

* About 25% of adults here have a 4-year degree but the demand is about 12% to 15% of job openings. About 10% have a graduate degree but the demand is about 2% to 4% of job openings. Spikes in 4-year degree job openings in 2007-2009 have to do with the recession when lower skilled workers were typically the first to get fired and higher skilled workers were the first to be hired.

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

Inflation Adjusted Average Wages in Spokane County

Good news – inflation adjusted average wages in Spokane County have gone up from 1990 to 2010.

Bad news – wage growth from 2001 to 2000 was 13.7% but wage growth from 2001 to 2009 was 5.5%.

  • The second period was selected to start from the lowest post 2000 wage (the bottom in 2001) to the end of the series in 2010.
  • The first period was selected to start in 1991 and run to 2000 (local peak) so that the same number of years would be in both groups.

What it means:  Wage growth in Spokane was much lower after the peak in 2000 and is now growing less than half as fast as prior years.

Oddity: Why did average wages shoot up in 2008 and 2009 in the midst of the worst recession since The Great Depression? Lower wage earners were laid off their jobs. Eliminating lower wage workers causes the average to rise.

Bottom line: Since 2000, average pay in Spokane has risen at a slower rate than prior to 2000. That’s unfortunate.

Reminder: The “average” is not the same as the “median”.

STA Votes To Approve Electric Trolley

STA Votes To Approve Electric Trolley – News Story – KXLY Spokane.

The initiative next moves at hyper speed to the Spokane City Council on Monday night (it is probably the last item on the agenda as RES 11-55), presumably so opponents will have a hard time mustering opposition speakers.

The STA is in process of cutting bus service by about 20% for the rest of us, but would seek a sales tax for all of the urban areas of Spokane County to pay for much of the 3 mile long, $36 million electric trolley.

Does Spokane need a 3 mile long electric trolley paid for by taxpayers to benefit downtown property owners?

Some facts about Spokane:

Naturally, what this town needs is a “cool factor” electric bus in the downtown core that serves key power brokers and eventually Kendall Yards, where residents pay no property taxes for 12 years. The head of the STA said the “cool factor” is why we need this.
The actual purpose of the trolley is to take money from the taxpayers to benefit downtown power brokers.

What we need instead are initiatives with a positive, long term return on investment. Not concrete pouring initiatives as a short term jobs program that are intended to benefit local power brokers.

I wrote the following in April, but did not previously publish it:

Transit expert praises STA’s, city’s planning – Spokesman.com – April 4, 2011.

So begins the pitch to enrich the downtown core while the rest of city and county remain economic disaster zones. The downtown trolley is a done deal.

There is little evidence that downtown trolleys spawn economic growth but during the past year they are the rage amongst top down, centralized urban planning groups. Name a mid-sized city – Boise, Yakima, Tacoma, Cincinnati, Huntington, VA, Tucson and dozens and dozens more – all of them have built or are proposing downtown trolleys. Why? Because the Federal government will pay for up to 80% for “fixed guideway” transportation. That rules out buses but permits rail, monorail, buses on rubber wheels but with fixed overhead wires (“electric trolley”), and rail lines. This becomes an inflexible permanent transportation solution  a la pouring concrete.

The Spokane downtown trolley does not bring shoppers into downtown. The primary goal is to keep the luxury housing residents of Kendall Yards, the future high density South University District housing residents, and thousands of college students from leaving the downtown core. The goal is to discourage travel to Northtown or Valley Malls and other non-downtown vendors. National and local taxpayers will fund this to create benefits to key downtown stakeholders. This will not create economic growth – it just moves spending from one place to another.

Like the $570 million sunk in the north side freeway, the $110 million waste of energy plant that makes our disposal costs twice that of a landfill (“it may turn trash into air pollution but at least it costs twice as much”),  and other programs, this is another investment with a bad return to the many.

Like so many taxpayer funded investments here, the trolley does not show a good return on investment – and will divert money from projects that might actually improve our local economic situation.

————————

I filed this story under “Crime”.

Spokane, King County and Washington inflation adjusted household median income charts

A reader who also needs to be anonymous, has provided an additional chart comparing Spokane County, King County and the state of Washington household median incomes, adjusted for inflation. The results are similar to those posted last week, but these show Washington and King County falling backwards in income over the period 1992-2009.

The lines to compare in this chart are purple to green to red:

The above charts are for the period 1992-2009, while the chart I provided last week is for the period 1989-2010.

For the period 1992 to 2009, all areas show declines in median income.

Differences between this chart and my Spokane County median income chart may be due to differing reporting periods, different data sources (see “After the break”, below) and CPI adjustments. Between 1989 to 1992, Spokane County after inflation adjusted median income rose by 1.4%. From 2009 to 2010, Spokane County median incomes fell an additional 2.75%, which is not reflected in the above chart ending in 2009.

The main takeaway is that after inflation adjusted median incomes have not done well over two decades. The median income is the value at which half of incomes are less and half are greater. This is not the same as average income.

Data and more commentary for the above chart are after the break.

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Spokane County income charts

Spokane County per capita income versus that of Washington and the U.S. As indicated by the red line diverging further from the green and blue lines, Spokane County has been gradually falling further and further behind the income growth of the state and the country.

The divergence between Spokane County per capita income and the State has been getting wider over the past 30 years and is now twice as much as 30 years ago.

Spokane area per capita income growth in the 2000-2009 decade has been awful except for a brief spike around 2006. My belief is that Spokane never recovered from the 2001 recession based on this chart, the diverging income chart and that unlike past recessions, when the transfer payments spiked up in 2000/2001, they did not fall back down as they had done during previous recessions.

A Tale of Two Cities – Spokane versus King County Wages

The following charts are produced using data provided by the State of Washington on average wages by county, and by category. The original data comes from here:  https://fortress.wa.gov/esd/lmea/IndustryDashboard/ and reading the data for each category, by county.

King County has higher wages than the state average.  A comparison to the State of Washington averages (instead of King County) is only slightly more favorable to Spokane. What these charts show is explained below the charts.  These are the top most categories within the State’s database. It is possible to get sub categories, elsewhere on the State’s web site, to compare, say, architects, rather than “Professional and Technical Services” and find that some specific job groups within each category pay better than indicated by the broad average.

Chart 1 – Spokane weekly average wages, by category, are shown in blue and King County in red.

Chart 2- Spokane weekly average wage, by category, as a percent of the average in King County.

Some one is bound to post a comment saying, “But how can this be true if Spokane wages are 80% of the state average? This looks much worse.”

For those of you on drugs, read carefully:

  • The above charts compare Spokane and King County, not the state average.
  • The above charts do not reflect that the fields with the greatest discrepancies do not account for  many jobs in Spokane. Here’s a chart from ESD that shows who works in what category. Health care, retail trade, accommodation and food services (and government, which is missing for King County) account for most of the jobs in Spokane.

Observations

The Education Services category is private education services. Public schools and universities are bundled under Government. However, the Workforceexplorer.com web site said it was missing the data on the Government category for King County so I was not able to compare Spokane and King County government employment.  Government accounts for 20% or $1 out of every $5 earned in Spokane County.

The State also splits out salaries by different categories or sub categories accessible at different locations in their web site. The sub categories produce different results than those shown above.

The above columns are not weighted by the number of people who work in these sectors. For example, the Information sector in Spokane, as a percent of the workforce, is well below the state average. The salary difference is huge but it effects a small number of workers.

The wage differences between Spokane and King County are staggering, particularly as we move to the right of the chart into the “high skilled” job categories. This is further evidence that Spokane County has few good paying jobs available for high skilled workers.

Another way to look at this is to say that high skilled workers choose Spokane for other reasons but at a cost of forgoing 35% to 60% of their earnings potential to live in Spokane. Or, that Spokane has a lower quality skilled work force and these are the market wages for their respective level of skill. No matter how you slice it, this is a tragedy.

To attract a “world class” work force will require substantially greater salaries to be paid in Spokane.  But relative salaries in Spokane have been dropping for over 30 years and no plan has worked to increase the Spokane wage level during that time.

And there is no plan that will work because chronic low wages are a feature! Spokane has long promoted itself as a business destination because of its low wage structure.

Not shown in the categories but pulled out of a different section of the WorkForceExplorer web site, Life Science salaries are 78% of those in King County. The Information sector, which includes “software publishers” but also includes online services and newspapers, pays just 39% of King County wages and just 45% of Washington State average salaries in that sector.

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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?

Why?

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.

Spokane County High School Seniors Taking the SAT

Community Indicators Initiative of Spokane – Average SAT Scores and Percent of Seniors Taking the Test: Spokane County.

This topic was previously covered here but this new chart shows the trend since 1999. The trend shows that while the percentage of students in the State taking the SAT has been fairly constant (53% in 2009), the trend in Spokane has been slightly downwards over this period (38% in 2009).

Please click on the link above for the interactive chart provided by Community Indicators of Spokane – a wonderful service of EWU that translates numbers into useful information. The horizontal green line is the percent of seniors, statewide, taking the SAT; the declining horizontal red line is the percent of seniors in Spokane County taking the SAT exam.

  • What caused this drop?
  • What can we do to reverse this trend?
  • What is being done now to reverse this trend? Is that working?
Update August 2011: The percent taking the exam has fallen again, to 36%:

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:

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.

Related:

Legislators propose to eliminate counties that cannot support themselves

Spokane in Spokane County

Image via Wikipedia

This will not pass – but if it did, it would abolish Spokane County:

If a county cannot economically support itself, then it should be dissolved and absorbed by surrounding counties. They put this proposal in House Joint Resolution 4214, which would amend the state constitution.

via Opinion | One county does not rule all in Washington state | Seattle Times Newspaper.

A Spokane area legislator is the author of the opinion column, above, and points out the ways Seattle benefits from rural economies. He recognizes that this bill would abolish most of the northeastern rural counties in Washington, likely merging all of them into a large county including Spokane.

Related:

In the last item, EWU researchers wrote:

The balance between transfer payments received and tax payments made for years 1991 and 1998 reveals that Spokane and Kootenai Counties both received more in Federal individual transfer payments than paid in personal income tax and social security contributions.

Consequently, the proposed legislation would likely abolish Spokane County and combine several counties together. No kidding.

Spokane County average wages

I have covered this topic repeatedly:

# Spokane’s median hourly pay ($17.32) was below the state average of $20.11 and ranked 17th among all state counties.

# In 2008, Spokane County’s resident personal income topped $15.7 billion, including $11.8 billion earned at work, $2.8 billion from investments, and $3 billion in transfer payments like Social Security and Medicare.

# Per capita income reached $34,011, 16th in the state – 15.3 percent below the U.S. average and 20.4 percent below the state average.

….

  • In 2008, Spokane County median household income increased to $48,395, but it was still well below both the state ($58,078) and the nation ($52,029).
  • Median family income in 2008 was $60,618, which was below both the state and nation.

via Workforce Explorer, Home.

Regarding the last item, the wage gap has been steadily increasing as Spokane area wages fall further behind over a period of decades.

This issue is addressed in thirty years worth of economic studies but the problem gets worse most every year.

Idea – of interest, 37% of personal income here comes from investments or transfer payments and 63% comes from wages. It would be interesting to compare this to other communities and to see how this ratio has changed over time. Since wages relative to elsewhere have come down, and transfer payments have climbed steadily for decades, it is likely that personal incomes has been continuously shifting from wages to investment and transfer payments.

How many workers are in which jobs and occupations in Spokane?

How many retail sales workers are there in Spokane?

How many metal workers are in Spokane?

How many nurses?

Here for your viewing pleasure is the complete list of the number of workers in every occupation in Spokane County. This data is from 2008.

Because of the length of this list, the list is displayed by clicking on the “Read more” link …

Read more of this post

Police shootings in Spokane, by the numbers

The Spokane County Courthose in Spokane, Washi...

Image via Wikipedia

Since August 25th, 2010: 7 police shootings. 5 killed, 2 wounded. And that is just in the past six months!

How does this compare to elsewhere?

In all of 2010 in New York City, 8 people were killed and 16 wounded by police shootings. (This is down from 12 and 20 in 2009 and way down from the early 70’s when, with a smaller population in NYC, nearly 100 people were shot and killed by police and over 200 were wounded – per year. I spotted this reference in the comments to an SR article on the most recent shooting.)

The population of Spokane County is around 463,000. The population of NYC is estimated at about 8.4 million in 2009.

Therefore, the number of people shot by police in Spokane in the past six months is about one-third the annual shootings in a city that is 18 times larger.

  • The shootings per capita in Spokane for six months are about 0.000015.
  • The shootings per capita in NYC for twelve months are about 0.000003.
  • Therefore, police involved shootings per resident in Spokane in the past 6 months are five times greater than in New York City in all of 2010.

I previously published a comparison of Spokane officer involved shootings to Seattle here. Spokane County police shootings are about 2.4 x greater than in the city of Seattle.

No official explanation has been offered as to why Spokane’s rate of officer involved shootings is so much higher than elsewhere. As explained here, there are perhaps a few possibilities:

  • It is a statistical cluster. Given another year or two, things will revert to the mean or normal level.
  • It is  due to issues with the people who live here
  • It is due to issues with the police that work here, or their training and experience.
  • Or perhaps a combination of all of these.
  • Update July 2011: So far this year, the shootings have gone way down. Statistical cluster then?

Spokane’s economy in two charts

How might I represent the local economic situation in just one or two charts?

The chart I made previously comparing Spokane per capita income as a percent of the State and the U.S. per capita income, over time is perhaps the definitive chart. The long term trend in income is a huge indicator.


Source

Another chart I previously made dug deeper in to the decline in the ratio and looked at the income growth rate compared to the state. This chart highlights that the income growth rate is approximately twice as fast as in Spokane County. (The spike in 2009 is due to lower paid workers being laid off their jobs, raising the average wage. Also, the government was caught by Bloomberg News using inflated national wage data for 2009.)

Source

The long term decline in income is a symptom, not the cause. A host of related issues are associated with the long term decline including poverty rates, health, education, worker productivity, crime and the desirability of the area as a place to live and work.

To me, these two charts are the definitive charts – and the two scariest charts on this web site (I guess this is my Halloween post – its scary!)