Spokane County has mostly recovered from job losses from the pandemic, but future job growth will depend on a continued influx of new residents, according to a local economist.
Non-farm employment in the metropolitan statistical area of ââSpokane – which includes Pend Oreille and Stevens counties – was 252,800 in September, up from 259,400 in February 2020, about a month before the area first felt the economic impact of the pandemic.
While off-farm employment in the Spokane region is nearly 3% below pre-pandemic levels, the number of jobs generated by Amazon have yet to be factored into the total, which will be counted. revealed later this month by Washington State Department of Job Security Grant Forsyth. Avista Corp’s chief economist said on Tuesday. participants in the Greater Spokane Incorporated Annual Economic Forecast.
âAdd in those estimated numbers from those reports and it looks like Spokane has actually returned to where we were in February 2020,â Forsyth said. âSo the message is really, regionally, we’re back. We have fully recovered. This is what the evidence suggests.
The forecasts took place virtually and in person at the Spokane Convention Center in partnership with the Spokane Journal of Business.
Forsyth pointed out that Kootenai County has recovered jobs faster than the Spokane area. Non-farm employment in Kootenai County was 68,000 in February 2020, up from 71,500 in September.
In Kootenai County, employment recovery has been stronger than in Washington in the leisure and hospitality sector, largely due to pandemic-related policy differences between the two states, a said Forsyth.
Manufacturing jobs are down 8% in the Spokane region and it is expected that those jobs will not be fully recovered based on historical economic models, Forsyth said.
âWhen we have seen a recession, manufacturing hardly ever returns to its previous employment level,â Forsyth said. âManufacturers, because of competitive pressures and so on, tend to do a lot of restructuring following a recession. And this restructuring means less manpower in the future. I think we’ll revisit this.
The expansion of the Spokane region’s workforce is strongly linked to population growth and immigration to the region, Forsyth said.
“Our labor force is going to grow at roughly the same rate as the population and so if we are to understand some of the long term challenges facing the region, we really need to look at what is driving population growth,” he said. . “And I can’t stress this enough – how important immigration has become to the region in terms of population growth.”
Reverse square root recovery
The United States appears to be in a reverse square foot economic recovery from the pandemic, said Steve Scranton, chief investment officer and economist at the Washington Trust Bank.
â(The) first half, we increased. Now we get to the lower leg and then eventually we’re going to stabilize in the future, especially by the end of 2022, âScranton said. âThe question is, at what level do we level ourselves? “
Scranton said unequal vaccine distribution is a headwind in national and international economies.
âDeveloped countries got the vaccines first. They are further along in this process, âsaid Scranton. âDeveloping countries – which are usually the suppliers of our raw materials – are just starting to increase their vaccine supply and launch the vaccination program at full speed. “
A labor shortage in the United States could cause companies to reduce their hours of operation or switch to automating their operations, Scranton said.
A shortage of truck and chassis drivers – who are used to transport shipping containers from dockside terminals – will likely contribute to continued supply chain issues in the months to come, Scranton said.
“I’m just going to say that the supply chain problem will get better eventually,” he said. âBut we’re not just going to flip a switch and say, ‘In three months, it’s all right. âSo you have to plan for it.
One bright spot is an increase in warehouse and distribution center construction as companies seek more space for inventory storage amid supply chain issues, Scranton added.
Are the salary increases sustainable?
A growing number of companies are offering hiring bonuses and increasing starting wages in an attempt to attract workers, some of whom have left the workforce to care for their families or are changing careers.
âPeople who are reorienting their careers say, ‘I’ve been in this job for 20 years and my salary increases are minimal. Now I have more skills than 20 years ago, âsaid Vange Ocasio Hochheimer, associate professor of economics at Whitworth University. âThey really engage in different ways with the workforce by going somewhere else where the pay is higher.
âSo, is it sustainable? I do not know. It depends on the number of workers moving from one job to another. But I think it’s something employers need to think about.
A free market leads to an increase in wages, which are expected to remain constant even under changing economic conditions, said Scranton of the Washington Trust Bank.
âI think a lot of that is correcting itself and the wages are sticky. It’s pretty hard to tell someone that I gave you a 5% pay raise because the inflation is 5% and next year that inflation was actually down 2% so I will reduce your salary by 2%, âhe said. “It’s not going to happen.”
Forsyth said a growing number of workers are reassessing their careers during the pandemic. Some of those workers who were made redundant during the outbreak received extended federal unemployment benefits which replaced their income, he added.
âThis first cycle of prolonged unemployment was sometimes 150% of their actual working wages and for a lot of people they ended up having enough money to have a little bit of savings to fully pay their bills,â Forsyth said. âIt really, I think, changed people’s perspective on, ‘What am I doing in my current profession? Is there anything better elsewhere where I can somehow try to replicate this pay rise that I got from extended unemployment benefits? “Amy Edelen can be reached at (509) 459-5581 or [email protected]