May 22, 2011 in Business

Caldwell: Good news, good jobs work well together

By The Spokesman-Review
 

April was a good month for Washington’s unemployed: 5,800 of them went back to work.

The gain raised the 12-month improvement to 41,500, a good-news story even if those still not drawing a paycheck number more than 300,000. Almost 100,000 of that group are no longer eligible for unemployment benefits.

The April unemployment rate hardly budged, retreating just 0.1 percent from March, to 9.1 percent. The state has a long way to go before we return to the heady and not-all-that-long-ago months when the rate was half that high.

But the better part of the story is the sectors where the hiring occurred. The biggest increases were in construction, up 2,400; professional and business services, 1,700; and manufacturing, 1,200.

Going back one year, the story gets better.

Of that 41,500 total increase, 25,500 of it was in professional and business services. Education and health sciences was next, adding 6,300, and manufacturing, 5,900.

These are high-paying jobs, not the burger-flipping, minimum-wage positions with which cynics impugn the admittedly anemic recovery.

In fact, the laggards in April were two low-pay sectors: other services, such as repairs, hair-styling and laundry, 800; and leisure and hospitality, 500.

Governments at every level also handed out pink slips – 2,500 of them – raising the cuts since April 2010 to 7,900. Those cuts will continue, if not accelerate, and though most welcome smaller government, the fact is those cuts will be a drag on the recovery for a while.

In Spokane County, government and health care rank first and second in number employed and earnings. By wide margins.

Manufacturing ranks third in earnings.

The average manufacturing job pays 25 percent more than the average Spokane County job — $47,954 compared with $38,112. And the multiplier that ripples through the rest of the economy is also significant.

Manufacturing was among the Spokane County business sectors hardest hit by the recession. Since 2008, almost 4,000 workers have lost their jobs, notes Doug Tweedy, labor economist for the Employment Security Department.

But if the flesh has weakened, the skeleton remains strong.

The total number of firms making stuff has fallen by just five in three years, to 520, Tweedy notes.

They survived by improving the efficiency of their operations, which involved layoffs, and by investing in new equipment. The response to hard times has been much the same in the past, he said.

“Our manufacturers are resilient. They’ve actually been through tougher times than this recession,” Tweedy says.

They are much smarter. Of the 18 job categories encompassed by manufacturing, eight are considered “advanced.” Fortunately, the area is well-represented by companies in categories like aerospace, metals fabrication and plastics molding.

Keeping them smart requires the constant upgrading of skills – training needs Spokane Community Colleges have nimbly served.

A rebound in manufacturing has been among the better business stories of the last year. The Boston Consulting Group recently predicted that wage inflation in China will soon enable manufacturers in some low-wage states to match the cost of making goods if transportation and inventory costs are factored in.

Spokane economists predict a local recovery best described as a slog. A stable manufacturing sector should help with the footing.

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