Finding work in ‘restructured’ post-recession economy difficult
Jobs lost from housing bubble burst unlikely to return
More than 15,000 jobs were lost in Spokane and Kootenai counties when the housing bubble burst in 2008, and most of those haven’t come back.
Labor market economists say jobs are being created, albeit slowly. But in both counties, economists say the jobs being created are mostly the right kind.
“I really do say, ‘Not all jobs are created equal,’ ” said Doug Tweedy, the Washington state labor economist for Spokane, who tracks local job patterns.
Many of the jobs created since 2010 are higher-wage positions in advanced manufacturing, health care, financial services and a category called professional-scientific-technical, which covers software engineers, electronics technicians, researchers, architectural draftsmen and similar jobs.
Steve Griffitts, president of Jobs Plus, Inc., the nonprofit economic development corporation that helps companies relocate to or expand in North Idaho, likewise said the overall picture may look grim, but it doesn’t show the promising side of the job market.
While some employment sectors have declined, bright spots in North Idaho include manufacturing, health care, software design and development, aerospace and other technology, Griffitts said.
“There’s a lot of positive things that are going on with respect to overall job growth in our area,” he said.
Here’s a look at the jobs picture in both counties:
Tweedy started his work as Spokane’s labor market economist in 2008, at the tail end of a once-a-generation job boom that lasted from late 2006 to mid-2008. He predicts that he won’t see a jobs washout like the one that hit in 2008 again – at least in the next few decades.
The jobs expansion was fueled by easy credit and a housing boom, so it’s no surprise that when the bubble burst, it took many real estate-related jobs with it.
The recession cost Spokane County more than 4,100 construction jobs, according to the state Employment Security Department.
But it also stripped Spokane County of 1,500 jobs in leisure and hospitality and 1,700 retail trade jobs, which generally are lower-paying positions. Since mid-2008, Spokane County also has lost about 3,300 manufacturing jobs.
Spokane’s jobless rate in July was still high, at 8.8 percent. One year earlier it was 9.2 percent.
The impact would be worse, if Spokane weren’t also seeing a gain in better-wage jobs that have been on the rise since late 2010, Tweedy said.
Health care since 2008 has added about 900 jobs, the financial sector has added 400 and the professional-scientific category has added 800, according to employment surveys conducted once a month.
And while manufacturing generally has been in a slump, Tweedy noted advanced manufacturing has grown by 700 jobs since 2008. Those are jobs with companies involved in pharmaceutical products, chemicals, composites, rubber and metal alloys.
Nearly all the jobs in those growing sectors pay well above average. And they typically have a multiplier effect, leading to the creation of service and support jobs in the economy, although Tweedy notes there’s no evidence that has happened yet.
Employers are slow to hire because of the long, painful duration of the down cycle, Tweedy said. They have good memories and don’t want to start hiring until they have no other choice.
Economists use the term “structural change” to describe what happens when jobs disappear and won’t return again because the economy has retooled or resized. Tweedy said structural change is taking place at the lower end of the job spectrum.
A large number of service jobs are being replaced as technology automates jobs from scanning food items in checkouts to automated phone systems, he said.
Eventually, however, the multiplier effect should kick in, and the community should see retail, wholesale and service-sector jobs rebound, Tweedy predicted.
The faster rebound in some job sectors here reflects the pattern of economic growth occurring nationally, he added.
Health care jobs continue to increase as the population ages; that also explains the growth in health insurance jobs locally, according to state employment data.
Even the expansion of Washington State University’s new Biomedical and Health Sciences Building at Riverpoint is driving job gains, Tweedy said.
“That investment is helping create jobs as a number of area biotechnology companies have started up” in the last 12 months, he said.
After nearly four years of stagnation, Kootenai County remains on “a slow crawl” to recovery in its job market, according to regional economist Alivia Metts of the Idaho Department of Labor.
The agency had forecast job growth this year to remain flat in the county, but the first quarter was down over the same period in 2011, and construction activity headed into the summer was slower than expected, Metts said.
Kootenai County would need to add 3,500 jobs in the second through fourth quarters this year to be on par with 2011. “That might be tough,” she conceded.
As in Spokane, the housing crisis was a driving force in Kootenai County’s weak jobs performance during the recession.
The county lost a net of 4,800 jobs from 2007 through 2010, more than half of those in the construction trades, as homebuilding nearly ground to a halt. Construction jobs declined nearly 46 percent in that period.
The slowdown in construction also contributed to a loss of 500 jobs in manufacturing, mostly in wood products, for a decline of 10 percent during those four years.
As growth slowed and tourism slumped in North Idaho, businesses that rely on visitor spending also took a blow. Leisure and hospitality shaved 740 jobs while 630 retail jobs were lost from 2007 through 2010.
The worst year was 2009, when Kootenai County saw net jobs plummet by 4,000. Another 700 jobs vanished in 2010.
Last year brought a tepid recovery – a net gain of just 85 jobs – but 2012 has not brought the turnaround many had hoped for.
“It’s been a slow first six months, slower than usual,” Metts said.
The unemployment rate in Kootenai County remains above 9 percent, higher than the state and national rates and three times the record-low average rate in 2007.
The years prior to the recession saw rapid population growth and a building boom in the county – trends that proved unsustainable.
“To go back to those pre-recession levels could take probably another decade, if not more,” Metts said. “You always hear the terminology ‘the new norm,’ and I think that’s what we’re going to start seeing.”
Thirty years ago Kootenai County’s economy was built on lumber mills, retail trade and government work. Today the jobs are in health care, hospitality and tourism, call centers, education and an array of niche manufacturing.
The health care sector added 700 jobs, an increase of 11 percent, from 2007 through 2010. And because one in five health care workers here is 55 or older, a new crop of workers will be needed soon to replace those who retire.
Hiring is up at Kootenai Health, and so is interest in the jobs it posts. Daniel Klocko, vice president of human resources, said the HR department is receiving 1,200 to 1,500 applications a month, although many are from candidates who aren’t qualified for the positions.
Manufacturing also has begun to recover, in part because an aging workforce is providing new job opportunities, Metts said. It was one of the top three industries hiring locally in 2010.