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January 8, 2012 in Business
Quintrall: BBB, Forbes don’t see eye to eye about Spokane
The lists compiled by Forbes magazine often seem to cast Spokane in a bad light. We were previously painted as a scam capital, and now we rank at the bottom for job growth. Swell. But the BBB perspective is a bit different.
Scam capital?
Serving three states with distinctly different regulatory climates gives the BBB a unique view. Yes, the Inland Northwest has its share of big, ugly scams. The recent Little Loan Shoppe issue, the Randocks diploma mill and the Railway Crossings salvage scam all garnered national attention. And yes, we have been known to jump on the pyramid scheme bandwagon in a big way. But are we really worse off than other cities? I’m not so sure.
I know there are some random and widespread scams in Montana, many involving non-legitimate companies simply pretending to be there. And it’s an easy place to hide. In addition, we have seen shady business people flee Washington state for Idaho or Montana because the consumer protection focus in the other two states in substantially less.
Another consideration is whether Spokane scams are affecting Spokanites. Frankly, the offices of elected officials have an innate incentive to prioritize prosecuting the bad actors who victimize their voters. So if con artists are operating in Washington but their victims are from other states, they may get away with the scam for longer than if they were ripping off their neighbors. Trust me, scammers know that.
What else makes us attractive to con artists? All three states served by this BBB share a mystique that makes us unique: We are in the West where people are seen to be naturally trusting (or gullible). The perception is that we come from “honest pioneer stock” — after all, there are people in the East who think we all still ride horses and cook over wood.
Plus, many of us have a live-and-let-live mentality that can come back and bite us, especially when it comes to scammers. Turning a blind eye to a neighbor or competitor whom you know is involved in illegal or unethical activities is easier, but makes it easier for scammers, too.
A final issue that could skew the statistics is that out here, our ponds are small. A diploma mill or bad payday lender in Los Angeles, New York or Houston is not going to attract the attention they do in Spokane or Missoula.
Lack of job growth?
Nope, Boeing is not going to open a huge manufacturing plant in Spokane. General Motors will not be sketching out a new assembly facility in Post Falls anytime soon. And the headlines we see and the reports we hear center on big layoffs at Itron or Telect. But that is such a small part of what makes up the job pool in our area. You can count the large (over 200-person) employers on several sets of hands, but the small businesses? They are everywhere, and that is what makes up Spokane’s job growth.
How many headlines have you seen about a small company increasing its workforce by 20 percent when they add two employees to their existing staff of eight? Zero. Did the media rush to interview the BBB as we tripled our workforce over the last 10 years? Nope. And now that businesses are adding back staff one or three at a time, do they call a news conference or make a big public announcement? Of course not.
Measuring the growth of 12,000 small businesses is difficult. When we lay off two or three people we do not need to let anyone know, and when we hire them back it does not make news. But if you look around at the new retail stores, used car lots, restaurants and start-up businesses, you will see that the news is not as bad as it is painted. Can we attract large employers to this area? You bet. But they will be far fewer in number than the people hired by small businesses in the Inland Northwest.
Ah, list-makers. It isn’t only when I see lists of best places to retire, live or relocate, and Spokane isn’t on them, that I wonder what the list-makers were thinking. But if everyone sought the same lifestyle, climate and surroundings, we’d all live in a very crowded place.
Northwest wheat 
zelda on January 08 at 2:27 p.m.
This column is disappointing, full of diversions and misdirection. What matters in assessing Forbes magazine’s labeling of Spokane as the “scam capital” is the number of sleazy enterprises, swindles and grifters in proportion to the population. Comparing Spokane’s scams to NYC or LA is disingenuous. And no mention was made of Avista’s shenanigans in the 1999-2001 period or the downfall of Metropolitan Mortgage. The prominence of those two companies can’t be overstated. And then there’s the Mars Hotel, Spokane Stock Exchange and all the shady connections Spokane has to pink sheet mining stocks traded on the Vancouver Exchange. And last but not least, there’s the Ridpath Hotel fiasco.
As for jobs and job growth, no distinction is made between the quality of jobs and the quantity of jobs. Spokane has lost thousands of high-quality jobs with good benefits and high salaries. Job growth today is confined to low-barrier-to-entry companies and those that pay minimum wage with scarce benefits. Lastly, it bears mentioning that the largest legitimate employment sector in Spokane is government, not private industry. What few businesses that open in the area and are celebrated as entrepreneurial are cupcake stores, restaurants, massage therapy offices, hair and nail salons, “event centers,” and espresso stands. The true thriving and prosperous industries in E. Washington are B.C. Bud trafficking, call centers and gambling — activities that civic leaders aren’t likely to promote with great enthusiasm.
Chambers of commerce venerate small businesses but the love isn’t deserved. To quote economist James Surowiecki, “Small businesses are, on the whole, less productive than big businesses, and though they do create most jobs, they also destroy most jobs, since, while starting a business is easy, keeping it going is hard.” Small businesses, like grifters, come and go here with increasing regularity; the arrivals are lauded and the departures are seldom mentioned.
I’d say Forbes is right on the money in describing Spokane.
DickAdams on January 08 at 3:03 p.m.
Excellent post, zelda.
David Bray on January 08 at 9:30 p.m.
When one compares apples to oranges Spokane usually can rationalize it’s self-importance. It’s a delusional exercise to extract a feel-good from the readers about their home town.
The truth is we may be “near nature”…but we’re a long way from “near perfect”.