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Spokane’s big job-maker still government

On this Labor Day, it might be a good time to reflect on the main source of the jobs in our community: government.

Government has been either the No. 1 or No. 2 employer in Spokane – and in most communities around the country – for decades.

Like most things in economics, the rankings depend on how one counts jobs, and the way jobs are counted has changed over time. Government is a broad category that includes federal, state and local agencies. The jobs in public K-12 schools are counted as part of local government. The jobs at public universities and community colleges are part of state government. Tribal employment is part of the government category, so the 1,200 or so jobs at the Northern Quest Resort & Casino are classified as government, also.

“There’s just so many parts to government,” said Douglas Tweedy, regional labor economist for the Washington Employment Security Department.

The department puts the average number of government jobs in Spokane County so far this year at about 36,300, which makes the government sector second in total jobs to the “health and social assistance” category, which claimed the top spot from government in 2008.

But the state doesn’t include military jobs in the government category – it’s just the way things are counted – so if one adds in another 4,000 or so government paychecks being cut out at Fairchild Air Force Base, government would be No. 1.

Government and health care are leaders in Spokane County because it’s a “regional hub,” Tweedy said. People from around the region come here for medical treatment, and they relocate here, at least temporarily, for education.

State and local government jobs shrink a bit in the summer, he said, when schools are out and colleges operate on reduced staff. Some government jobs are countercyclical, meaning they increase when the economy is down because certain assistance programs are in higher demand; others shrink when the economy reduces tax revenues, which reduce government budgets.

Things aren’t much different in Kootenai County. Alivia Metts, regional economist for the Idaho Department of Labor, said government has been at or near the top of the employment sectors at least since the 1980s. That’s partly because jobs at Kootenai Health, a public hospital system, and the Coeur d’Alene tribal casino are included in that sector. Taking the Kootenai Health jobs out of government and putting them with other health care would move government down to No. 3, below health care and retail.

“Government has always played a large role in our economy,” Metts said, although that’s changed as the recession forced budget-tightening at different levels of government and the North Idaho economy has diversified.

But health care jobs are, to a large extent, also dependent on government, because so many patients are on Medicare or other government reimbursement programs, said Shaun O’L. Higgins, the former sales and marketing director of The Spokesman-Review who has tracked the region’s economic performance for more than 30 years.

“Spokane wouldn’t be the town it is today, and wouldn’t sustain itself, without government spending,” Higgins said.

So when did the economy become so dependent on government jobs? Again, it depends on how you classify jobs and define government.

Washington and most Western states other than California and Texas started out as government property – setting aside the existing Native American rights, which is a separate discussion – and much of what was done in the West in the early years was directly tied to the government or indirectly related to it, like the federal government giving land to companies that built the railroads. No one kept track of jobs until early in the 20th century when the federal income tax came along, Higgins said, and at that time, government employment on all levels was relatively small.

That changed in the 1930s during the Great Depression as New Deal programs found ways to get people back to work, particularly in the West, where the federal government created everything from Civilian Conservation Corps projects to federal dam and irrigation projects. In the 1940s, government employment jumped again in the region with military bases and war materiel manufacturing for products like aluminum. In the 1950s, some of the military bases had closed and the aluminum works had been sold to private companies, and Spokane probably reached a high point for high-paying private manufacturing and production jobs. But even some private companies like Kaiser Aluminum relied on government contracts.

Later in the 1950s, the baby boom also meant communities needed more schools, which meant more construction jobs to start and more teacher and administration jobs ongoing for local government. As that boom matured, it meant college expansion – more jobs in the state government category. Government services also expanded in the succeeding decades.

“It’s a long-term trend,” said Paul Turek, Washington’s chief labor economist. “What sort of things do we want to have government do?”

Things like defense, which is a major responsibility of government, become intertwined with the state and local economy. Increased spending on defense in recent years means more civilian jobs in services for military facilities as well as more troops. A recent study by the U.S. Army on the prospect of withdrawing 16,000 soldiers and civilian workers from Joint Base Lewis-McChord near Tacoma – which has seen significant increases in the past two decades – is prompting a debate between the Pentagon and the state of Washington as to how big of an impact that reduction would create. The Pentagon estimates the state would lose $17.4 million in tax revenue through 2020; the state says it would lose $87.3 million.

When people in the Northwest say they want to get government out of their lives, it might be fair to ask what part of government do they want to keep and what do they want to give up?

“It’s great to ‘get the government out of everything’ after it has built all of your infrastructure,” Higgins said. “We all want it to be cut in a way that doesn’t affect us.”