Higher incomes are vital statistics indeed
Back in the day when the closing of The Davenport Hotel was the big economic news, and it went down from there, Spokane leaders fretted about the flight of their children, and personal incomes falling further behind the national average. Not to mention Seattle’s.
Less so today. Except, of course, for Seattle.
The 2006 personal income numbers released Tuesday by the U.S. Bureau of Economic Analysis show Spokane’s rate of increase for total personal and per capita income edged ahead of the national rate. Barely, but ahead. By 6.9 percent for Spokane compared with 6.3 percent for the nation in the case of personal income, and 5.4 percent compared with 5.3 percent in per capita income.
Per capita gains lag those for personal income because population growth has outstripped growth in income, which is reported as one number for an entire metropolitan area.
For the record, Spokane per capita income climbed to $30,733, the first time it has exceeded $30,000. The national per capita is $36,307.
Seattle is on another planet, showing gains of 8.1 percent for total personal income, and 6.3 percent per capita – to $44,228. The richest of all 363 metropolitan areas, southwestern Connecticut, boasts a per capita of $71,901. The tradeoff is you have to live in southwestern Connecticut.
If Spokane seems to be closing the gaps at a pace that will pull the city triumphantly even with the nation sometime in the 22nd century, consider the positives. For one thing, as Greater Spokane Incorporated President Rich Hadley says, “We are going in the right direction.”
The economic development group has moved away from an approach that used to stress cheap labor, he says, and the sectors that helped the community add 10,000 jobs last year – health care, manufacturing and construction – offer attractive compensation. Also, recruitment has shifted to areas where companies pay well; second and third-ranked San Francisco Bay Area and Silicon Valley, for example, and Seattle, which despite its income gains has fallen from a 10 ranking in 2004 to 17th in 2006.
“If we improve personal income, we’re going to be more attractive to people as a community,” Hadley says.
State Regional Labor Economist Jeff Zahir says rental income, one of the elements of personal income, distorts Seattle-Spokane comparisons.
“A lot of their income is funny money,” he says. “It’s not really a good measure of what people are actually experiencing on the ground.”
On the ground, where income means wages, Spokane’s gain was “gargantuan.” More importantly, it establishes a better foundation for future increases than more volatile rent and investment income, he says, noting the income gains were relatively well distributed among the lower, middle and upper classes.
Zahir, who says a downturn in the economic cycle is inevitable, also cautions that sustainable income growth depends on how much a community saves: “How much of the real wealth have you retained from good times to bad?”
Good as the news from the BEA was for Spokane, it was even better for Coeur d’Alene, which was among three Idaho cities – Boise and Idaho Falls were the others – to report personal income gains of almost 9 percent. At $28,765 per capita, Coeur d’Alene growth was 6.7 percent.
Regional Labor Economist Kathryn Tacke says higher wages and higher rental income were factors, as was a good mix of jobs.
She predicts a slowdown this year because new jobs are offering wages at the low end of the scale. With commodity prices up, however, farm incomes will rise.
“It’s going to be a real boost for Benewah and Boundary counties,” Tacke says.
Greater Spokane Incorporated has embraced “vitals” – income, education, and commuting times among them – to benchmark itself against other communities. Last year set the bar for income growth high. Despite his pessimism, Zahir says he can find nothing negative among the indicators he watches.
Anecdotally, the city even seems to be retaining its young talent, he says.
The vital of all vitals.