The story of the Spokane economy is a good news-bad news scenario. But it’s no joke.
The recovery has arrived with a vengeance for some people. Everyone else is still treading water in a still pool, and it takes no guesswork to figure out who’s who, because it’s a rule of thumb: We overvalue big shots and undervalue underlings.
The over-under. It explains a lot.
Here’s some of the news – good, bad and otherwise.
The supposedly good news: Executives at publicly traded companies in the Inland Northwest took home an average increase of 11 percent in salaries and bonuses in 2010, according to an analysis of SEC filings by Linn Parish of the Journal of Business.
The presumably bad news: Median family income has been stagnant in Spokane County for several years. And, while 2010 figures are not yet available, the midpoint for family income was projected to decline yet again from 2009, according to the state Office of Financial Management.
The definitely bad news: The proportion of Spokane County children living in poverty increased by about the same percentage that the top dogs’ salaries increased – rising by 12 percent between 2008 and 2009. According to Census Bureau estimates, more than 17 percent of kids here live below the federal poverty line.
Addendum to the supposedly good news: Regional execs took home an even bigger raise – 18 percent – if you include stock and stock options.
Addendum to the definitely bad news: The percentage of companies in our region that offer any stock options whatsoever to employees plummeted by 36 percent between 2004 and 2010, according to state statistics compiled by Eastern Washington University’s Community Indicators Initiative of Spokane.
Addendum to the supposedly good news, Part 2: Local execs are paupers compared to the nation’s biggest corporations. According to the Journal of Business, the region’s highest-paid CEO is Malcolm Unsworth at Itron, who got a 95 percent raise last year for a total compensation package of $5.1 million. That’s about half the mean salary of CEOs of the largest 200 corporations in 2010, according to the New York Times.
Addendum to the supposedly good news, Part 3: The top-paid CEO in the Times analysis was Viacom’s Phillipe Dauman, who earned $84.5 million.
Side note: That’s roughly the amount the feds recently devoted to a two-year, nationwide program to battle chronic unemployment among migrant farm workers.
Addendum to side note: There are a lot of people who think it’s the federal program that’s obscene.
The potentially mitigating portion of the supposedly good news regarding executive pay in the Inland Northwest: Plenty of top executives actually suffered salary losses in 2010. Like everyone else. It wasn’t such a boon year for the big shots at mining and paper companies, for example. Some of them dropped down into the merely high six figures.
The potentially aggravating portion of that supposedly good news: Some CEOs got raises that seem simply grotesque, especially at this particular moment – including raises of 438 percent and 392 percent and 192 percent among top execs at Itron.
On the other hand: The year before, executive pay in the Journal survey increased a mere 1.9 percent.
On the other other hand: Overall, Spokane County’s per-capita income in that period actually declined by 0.6 percent.
The long view: The top 0.1 percent of earners in the country, who take home $1.7 million a year or more, saw their income increase by 385 percent between 1970 and 2008, according to the Washington Post.
Addendum to the long view: Sixty percent of that exclusive club are executives and managers.
Addendum to the long view, Part 2: The “bottom” 90 percent of earners in this country saw earnings decline by 1 percent in that time.
My point being: Executives are paid for work, just as janitors are. Work is being bought and sold on a market. One kind of work has gotten very, very, very “valuable” – and it just so happens to be the kind of work that is done by the people who decide how valuable work is – while just about every other kind of work has not. Funny.
Addendum to the lesser conditional good news, Spokane edition: Paychecks here are falling behind everyone else’s falling-behind paychecks. Between 1970 and 2008, the gap in per-capita income between Spokane County and the state as a whole rose from 12 percent to 24 percent, according to the Community Indicators Initiative. The gap between us and the national average grew from 9.6 percent to 15 percent.
In other words: Most people are making less than they used to. Most people in Spokane are making even more less than they used to.
The bottom line: Unemployment is 9 percent, not counting those who have given up. It’s been 29 months since it was below 8 percent. It’s been three years since it was below 5 percent. Forty-five percent of Spokane County schoolchildren qualify for free or reduced-price lunch. Home values are down, new construction is down, retail sales are down. Unemployment insurance, welfare payments and food stamps are up.
Oh, yeah – and executive salaries.