As the Spokane area continues to recover after the great recession, one indicator of economic improvement is lagging behind here: job creation.
Spokane County lost a total of about 13,500 jobs in 2009 and 2010, but as of last year had recovered only about 5,900 of them, according to data the Eastern Washington University Institute for Public Policy and Economic Analysis compiled for its Community Indicators Initiative of Spokane website.
“If this trend continues, my best guess is the numbers of employed will not be at the level they were in 2008 until 2016, and that could be optimistic,” says Patrick Jones, the Institute’s executive director. “That’s eight years of just trying to get back to even. I don’t think a lot of people realize how severe the recession was and the slowness of recovery from that recession in the Spokane area.”
In addition to jobs here not being back up to 2008 levels, Spokane County’s job growth rate isn’t matching the rest of the state.
In 2013, Spokane County created 1.5 percent more jobs than it did in 2012. For the same year, the state’s created 2.2 percent more jobs than in 2012.
Grant Forsyth, regional labor economist for Spokane-based Avista Corp., says big gains in key industries in the Puget Sound area has boosted statewide job growth.
“If you disaggregate the state a bit, the reason why we haven’t been following the state closely is because of what’s happening on the West Side,” Forsyth says. “The Puget Sound area started growing (after the recession) before we did, and in key industries, like aerospace and software … There’s still a lot of demand for those even in this post-recession economy.”
Although Spokane’s job creation numbers have remained positive for the last few years, many people here might not realize the region hasn’t yet reached pre-recession employment levels, he says.
“I think it’s because we were so bad for so long, the fact that we’re growing now makes everything look a lot better,” Forsyth says. “We didn’t really start to see employment growth until the second half of 2012 … there was a really weak period from 2008 through most of 2012. That’s a long period of a lot of economic weakness, so compared to that, things feel pretty good right now, even though we’re not back to the level we had in 2007-2008.”
Jones says multiple factors could be contributing to Spokane’s slow job recovery, including a lack of labor jobs.
“The industries that are traditionally labor intensive, construction and retail, to the best of my knowledge, those industries have not recovered (here) as well as the western side of the state,” Jones says. “So that’s my initial thought, the construction and retail industries.”
In addition to the low level of jobs in those sectors, Jones says many companies learned to operate with fewer employees during the recession, which also could be contributing to low job creation.
“One of the takeaways here is that businesses are doing the same amount of business, or more business, with fewer people,” he says. “That’s probably one of the outcomes of the great recession—better productivity.”
Forsyth says that changes made by the federal government, namely the Affordable Care Act, caused some uncertainty among employers here.
“It restricted some industries, like the health care sector, which is big here,” he says “They were holding back until they had some clarity. Now that people have some clarity and realize it’s the law of the land, they’re moving forward.”
The government also is a key sector of employment here, Forsyth says, and stalls in hiring and layoffs in that sector hampered job growth in Spokane County as well.
“Government em-ployment here is more important, as a share of employment, than other parts of the state, and we had a period where government either wasn’t adding workers or was shedding workers,” he says. “That also helped keep employment growth here lackluster.”
Looking ahead, both Jones and Forsyth say there isn’t one solid solution to the region’s job creation difficulties; rather, a combination of factors is needed to increase employment opportunities.
“I don’t think there’s a silver bullet to boost job creation,” Jones says. “I think that’s a relatively slow-moving train. Obviously a major employer expanding in a significant way would help … And if we had more firm creation, more businesses that were actually born here, that might help, but our firm creation has been relatively weak, to my knowledge. And, if we had existing firms that were able to sell a lot more outside Spokane County, nationally, and overseas, that would help.”
Forsyth says he sees the problem partly as an issue of wage and income growth, which aren’t growing quickly here either.
“One thing I think is a problem for our region is, wage and income growth is pretty weak, which constrains lending activity and constrains businesses and job growth,” Forsyth says. “That’s hard to overcome.”
To help boost job growth, Forsyth says the region needs to not hold back on infrastructure improvements and to look for large companies here to take the place of corporations that have moved or folded.
“There’s a lot of emphasis on business recruitment, but I’m a big believer in looking at what businesses are here now and what they need to grow,” Forsyth says.
He adds, “It’s important because we’re going through some structural changes and losing some corporate headquarters. We lost Coeur d’Alene Mines, we lost Coldwater Creek. The question is, what are (companies in the region) that could possibly replace those companies?”
Subscribe today to our free E-Newsletters!SUBSCRIBE