A balding French philosopher once said demography is destiny, and just looking at the labor market, Auguste Comte might have been onto something. The Baby Boom generation is actively aging into retirement and that dynamic is driving the labor force participation rate downward, while also increasing demand in specific parts of the economy such as healthcare.

At the same time these workers are retiring from jobs, total hiring across the economy has also slowed--this has seized up the natural churn of workers within a robust labor market, which makes it more difficult for those who are looking for work to find work. This is all playing out under the backdrop of inflation which has run above target for more than half a decade. So, what does this look like in the local labor market? Let’s take a look:

The current labor force

According to the Washington Employment Security Department in September 2026, total employment had increased state-wide by 9,200 jobs year-over-year while the Spokane-Spokane Valley Metropolitan Statistical Area saw total employment decline by 1,400 jobs. In the Spokane area, goods-producing sectors like manufacturing and construction have increased by 1,100 jobs, while service-providing sectors have decreased by 2,500 jobs. Outside of private education and health services, most service-providing sectors are showing year-over-year job declines in Spokane.

The civilian labor force in Spokane County has declined by 3,151 workers over the last year and the long-term labor force trajectory since the pandemic has been mostly flat. Since 2020, Spokane County’s population grew at a higher rate (3.5%) than the US (3.1%), and slightly less than Washington State overall (3.8%), but Baby Boom labor force exits have outpaced new labor market entrants and will continue to do so for years ahead. This demographic reality has been known and will continue to tighten the labor market and the available skilled labor for businesses to draw from.

A low-hire, low-fire economy

Even though the labor force faces further tightening due to retirements, online job postings have steadily declined since the pandemic, in part due to persistently high inflation and slowing economic activity across many sectors. Unemployment rates for those actively looking for work are very low, with an estimated 3.2% unemployment rate in Spokane County in September 2026.

This dynamic has been labeled as the “Low-Hire, Low-Fire” economy, where workers aren’t losing or changing jobs as frequently, but those without a job are finding themselves in a more difficult situation with lower hiring demand. In September 2025, there were 37,400 people in Washington state who were long-term unemployed, or without work for 27 weeks or longer. In September 2026, this figure grew to 58,200 workers. Many of these long-term unemployed workers who have higher levels of education and lost good-paying jobs are less likely to want to return to work in an entry-level role with a significant pay cut.

In addition, long-term unemployed workers face increasing barriers to becoming re-employed as job skills can atrophy and confidence can erode from repeatedly striking out on the hiring process.

A further complication to the current labor force dynamics may come from the major Medicaid eligibility changes of H.R.1 — the “One Big Beautiful Bill Act,” which will go into effect in January 2027. These changes will require most SNAP and Medicaid recipients to work, go to school, or volunteer to maintain their benefits. An estimated 7,000 to 8,000 people will be affected by the changes in Spokane County. With the steep decline in online job postings and overall job demand, there will likely be difficulty in matching the potential workers with jobs, and in building the necessary skills for obtaining and retaining employment. The local workforce development system has been leading community planning sessions to strategize how best to help build job ready skills with this population.

 The silver tsunami

The main reason for the slowing labor force growth is retirement. The long-anticipated "Silver Tsunami" of baby boomer retirements are actively hitting the economy and will continue to do so for another half decade. Hiring Lab by Indeed projects the peak levels of retirements to occur in 2029. Retirements are not hitting industries equally, with the strongest effects felt in the education and health, manufacturing, government, financial, and wholesale, transportation, and utilities sectors. Over the past two years, the healthcare and social assistance industry has significantly outpaced all other sectors in terms of job growth, however now faced with an elevated level of worker retirements, the reduction in labor force supply will compound the effects of heightened labor force demand.

Keeping older workers engaged

When a skilled worker retires, not only is a business losing a competent employee handling the day-to-day work, but they can also lose the opportunity to pass on skills and institutional knowledge to the next generation of workers. Repeatedly, I’ve heard the same story told by businesses across numerous industries--many older workers do not want to engage in mentorship until they have announced their retirement out of fear of losing their own job earlier than desired.

This workplace dynamic misses out on effectively passing the torch to younger workers and assuring continuity. Business leaders who develop an environment and culture that encourages and rewards mentorship between older and younger workers should see a dramatic payoff as the demographic realities of the Baby Boom generation leaving work continues to affect every business.

Mike McBride is the Regional Labor Economist here for the Washington state Employment Security Department.