Affordability Gap Spokane Most Expensive City Of Its Size In Nation, Survey Says
For a bargain basement town, Spokane has become an expensive place to live.
Driven by inflationary real estate and health care costs, Spokane is now the highest-priced city of its size in the nation, according to national cost-of-living data.
Put another way, people pay more to live in Spokane than in Colorado Springs, Colo.; Des Moines, Iowa, and Peoria, Ill., according to a quarterly cost-of-living survey by the American Chamber of Commerce Research Association in Louisville, Ky.
They also pay more on average than residents of several major metropolitan areas - Atlanta, Phoenix, Las Vegas, Dallas, Cincinnati and Miami.
Living in Spokane, the chamber’s survey of 320 participating cities indicates, is as costly as living in Denver, a city with four professional sports teams, or Portland, the Northwest’s second-largest city.
That’s a radical change from 1990, when a yet-undiscovered Spokane was cheaper than Cedar Rapids, Iowa, and Walla Walla.
The change would be less troubling if wages had gone up at the same time. But they haven’t.
While the amount of money it takes to live in Spokane County climbed, wage rates lagged behind those of Washington state, the nation and cities of similar size to Spokane, U.S. Department of Labor figures show. That has put many in a squeeze, struggling to pay steeper bills with less money.
“What’s scary is that the American dream to own your own home is no longer affordable,” says Ellen Ambrose, a former bank manager who recently returned to Spokane to look for a job after five years in Manchester, N.H.
“We’re all told this is a great place to raise your kids and own your own home,” says Ambrose, who has taken a temporary clerical job to pay rent for herself and her 14-year-old son. “But there’s a problem: The low-paying jobs don’t go along with cost-of-living increases.”
Spokane, in fact, has one of the worst combinations of wage rates and living costs for U.S. cities of its size. Among 11 similarly sized metropolitan statistical areas that the chamber association surveyed nationwide, Spokane was the most expensive place to live, and had the third-lowest average annual wage.
Business leaders say the chamber’s study reflects a spike in the economy that will subside. As for the wage trend, they say that’s begun to improve as high-paying jobs catch up with the abundance of overqualified people who insist on staying in Spokane.
“How long can we rely on the quality of life to keep people here?” says William Sweigert, personnel services director at Associated Industries of the Inland Northwest, a group of companies that represents 20,000 workers. “This town is starting to become a competitive market for employees and wages. It’s starting to catch up.”
In fairness, some cities, including Seattle, don’t participate in the chamber’s cost-of-living survey because they’ve gotten too expensive to want publicity. But most, including sky-high New York, Los Angeles and Anchorage, do participate. Cities of similar size to Spokane that were not surveyed included Modesto, Calif., Corpus Christi, Texas, and Madison, Wis.
Of the 320 cities in the survey, Spokane ranked 47th most expensive in the first quarter of 1995, the most recent period available. That compared with 198th out of 291 communities surveyed during the first quarter of 1990.
The survey compares the cost of 59 things, including mortgage payments, utility bills, groceries, a doctor’s visit, pizza, a haircut and tennis balls. Some of Spokane’s best deals, such as golfing greens fees, are not included. But other bargains, such as gasoline, are.
Housing accounts for more than a quarter of the cost-of-living comparisons. That means cities such as Spokane, where real estate has boomed for several years, show the most dramatic inflation.
But among similar-sized cities, the chamber survey indicates, Spokane also leads the way in the price of health care and miscellaneous goods and services such as movie tickets and beer.
“I found out you can’t (afford to) have a telephone unless you make more than $5 an hour,” said Manpower Temporary Service owner Ruth Droz, who recently tried to live for a month on minimum wage.
“I had to cut back giving to the church and supporting the library. I couldn’t go out for fast food. I had to stay home and cook a potato.”
Sadly, Droz’s experiment is reality for many in Spokane, where the government says that the urban core receives more public assistance than any other legislative district in the state. While the county’s unemployment rate is a low 4.9 percent, the statistics don’t reflect thousands who feel they are underemployed, or working below their skill or expected wage.
Spokane County’s average annual wage last year was $22,813, government figures show.
Wages have risen in recent years, but still remain far below the estimated $26,577 earned nationally and $26,344 in Washington state. Wage figures are for workers covered by unemployment insurance, or about 85 percent of all jobs.
“I went from $14 to $8 an hour,” says Leonard Silon, who left a $30,000-per-year data processing position in Louisville to relocate near his girlfriend in Spokane. “There’s one-third the computer opportunities in Spokane and fewer jobs at the pay I was making.”
Silon was surprised to find that Spokane, a city half the size of Louisville, had a higher cost of living. He took an interim job through Humanix Temporary Services, figuring he could absorb a pay cut because it was less expensive to live in Spokane.
But things haven’t worked out that way. The 32-year-old has begun seeking work at the handful of Spokane high-technology firms and broke up with his girlfriend. But he vows to stay.
That tendency to plant roots in Spokane is one reason the city grapples with underemployment. People are willing to forsake higher paying jobs in Seattle or elsewhere for the chance to raise a family in a quieter community, thus saturating the market with qualified workers.
Some cities that boast cheaper costs and higher wages are less desirable spots to live than Spokane. For instance, the air over Beaumont, Texas, which has an attractive average annual wage of $26,384, often is choked by emissions from petrochemical plants and hair-wilting humidity. The tallest peak in Iowa, where Des Moines offers an alluring $25,948 a year average wage, wouldn’t reach the top of the Seafirst Financial Center in downtown Spokane.
Kurt Conklin has seen the attraction of Spokane firsthand. As vice president of human resources for Egghead Software, he’s received a stack of 4,000 applications from people seeking work at the company’s new Liberty Lake headquarters in the Valley.
“We were overwhelmed,” Conklin says. “We did not anticipate that kind of turnout.”
Conklin says Egghead jobs in Spokane pay 10 percent less on average than the same positions in Issaquah, Wash., a Seattle suburb that once housed its headquarters.
The difference in pay may shrink, however, as Egghead and other companies expanding or moving to Spokane bid up wages for the best workers.
“We’ve already created an increase in wages,” says Conklin, who has to hire 550 people to work in Spokane. “As we’ve made offers, other companies have countered them.”
Associated Industries also has seen signs that wages are going up. In a survey of its 500 members late last year, it found that 54 percent raised wages of entry level jobs, up from 40 percent in 1993, while 63 percent gave pay raises to workers. That was up from 59 percent the previous year.
“Spokane employers are responding to something other than the cost of living, they’re responding to a competitive market for employees,” the association’s Sweigert says.
Economic development agencies are trying to close the chasm between the cost of living and wages. Momentum ‘95, an organization of 550 Spokane businesses, and the state employment security department, recently spent $60,000 to hire the Pace Group of Tupelo, Miss., to make recommendations on how to create higher paying jobs in Spokane. The group’s findings will be released later this month.
“Hopefully, it’ll stir the imagination of people,” says Bob Cooper, president of the Spokane Area Economic Development Council, which spearheads business recruitment efforts.
Cooper warns that EDC recruiters only account for 20 percent of the community’s employment growth and there are some things the agency cannot control. Most obvious is Spokane’s geographic isolation from Seattle and other cities where employers pay more.
As happened in the 1950s and 1970s, however, Spokane’s cost of living will cool when the number of newcomers pouring into the community slows, Cooper says.
“We’re in a time warp,” he says, “and when we come out of it we’ll be strong.”
But it also means the days of selling Spokane as a cheap place to live are over, says Gordon Budke, president of Momentum and managing partner of Coopers & Lybrand public accounting firm. The community will need to focus on attracting selected companies that pay better.
“We built a low-cost community and they came,” Budke says. “Now we need a greater and somewhat different mass of employers.”
, DataTimes ILLUSTRATION: Color photo 2 Graphics: 1. Falling behind 2. Housing prices make Spokane expensive