Sheltered from the storm
Recession or not, Coeur d’Alene should survive the economic slowdown without too many bruises, according to a study based on how well communities have weathered past downturns.
And the city will do it without any of the three elements – universities, state government or regional health-care centers – that typically prop up local economies when the nation as a whole is struggling.
Business consultant Mark Hovind identified 27 “recession-proof” places from U.S. Bureau of Labor Statistics data on job expansion and work force growth. All the cities added jobs faster than potential new employees joined the work force during the 1990, 2001 and 2007 recessions, if those years indeed were recessions.
Coeur d’Alene was the only such community in Idaho, Billings the only in Montana, and Bend the only in Oregon.
In Washington, Olympia, Bellingham and the Tri-Cities met Lovind’s criteria.
Jonathan Coe, president of the Coeur d’Alene Chamber of Commerce, attributed the city’s health during hard times to the diversity of businesses, its attraction as a tourist destination, and its status as a refuge for the wealthy, who are less vulnerable to recessions.
But characterizing Coeur d’Alene as invulnerable to business cycles might be going a little too far, Coe said.
“Recession-proof is an awfully ambitious term,” he said. “It makes me a little uneasy.”
Each of Hovind’s 27 communities has an economy built around some industry, or mix of industries, that “don’t follow the business cycle pattern,” said Matt Martin, an economist with the Federal Reserve Bank’s Charlotte office.
In Olympia, the cash cow is state government.
At the southernmost tip of Puget Sound, the population of this smallish city of 44,000 swells during the legislative session, when lawmakers, lobbyists and special interest groups swarm downtown coffee shops and eateries. Olympia is home not only to the Capitol and the bustle of politics that surrounds it, but also to two regional hospitals, Evergreen State College and a lively arts community.
In addition to numerous galleries, downtown Olympia hosts the Washington Center, home to the Olympia Symphony Orchestra, Harlequin Productions at the historic State Theater, as well as the Capital Playhouse. The 125-seat, black-box theater runs 11 musicals a year, and the three-week shows were so popular, they added another weekend to each musical starting last September.
“None of those things individually is a significant driver by themselves, but what they do do is drive the economies of other businesses,” said Jeff Kingsbury, who founded the playhouse. “It’s such a diverse mix of businesses and the thriving arts, it really helps stabilize the economy all the time.”
Located close to both the mountains and the coast, Olympia also earns points for air quality, low crime and other quality-of-life measures. But it’s that constant of state government that is “the great equalizer for us,” said Michael Cade, executive director of the Thurston County Economic Development Council.
“State capitals are good, especially if … state government’s large relative to the size of the town,” said Martin, the Fed economist.
Of course, even these “well-insulated” places – Martin’s term – would feel the effects of a recession.
Hovind said his use of the term “recession-proof” shouldn’t be misconstrued as meaning a place is untouched by economic malaise.
“It’s not absolute. You can’t look at it in those terms. This is a continuous scale of gray,” he says.