Stagnant Labor Pool Keeps Jobless Rate Low Despite Weak Job Growth

Job growth was ho-hum in Spokane last year, and the outlook is for more of the same this year.

True, the unemployment rate has been running at record low levels.

But that’s not because Spokane’s economy is red hot and churning out great numbers of jobs.

The chief reason the jobless rate has fallen so low is that Spokane’s labor pool isn’t being flooded by refugees from California like it was a few years ago.

So there aren’t a lot of people out there without work.

But there aren’t a lot more people working out there either.

This is what stands out, reading between the lines in the Washington State Employment Security Department’s just-released labor market summary for 1997.

Non-farm wage and salary employment in the Spokane labor market grew 2.4 percent last year. That’s slower than the annual average of the past five years, which was 2.8 percent, and it’s just half the period’s peak growth rate in 1994.

“The ebb and flow of in-migration will continue to be the determining factor in Spokane’s economic and employment future,” says the state’s regional labor economist for Spokane, Fred Walsh.

He was impressed by the manufacturing sector. As a group, manufacturing employers increased their work force by 3 percent last year, lifting manufacturing’s five-year growth rate to 16 percent.

That’s better than the rest of Spokane’s employment sectors as a whole. Non-manufacturing employment grew only 2.3 percent last year and expanded 14 percent over the past five years.

Construction employment grew just 2 percent last year, contrasted to the torrid pace of 4.7 percent on an annual-average basis the past five years.

Employment in the transportation and communications sector fell 3.4 percent last year, dropping the five-year employment total down to a negative annual average of minus .6 of 1 percent.

On the other hand, business services employment ballooned 11 percent, bring the five-year annual average to 12.3 percent, at least on paper. But Walsh advised taking the figures with a “dose of salt” due to rejiggering of some data.

Retail trade added fewer new jobs percentagewise than other employers overall, as hiring rose just 2 percent. Over the last half decade - a period of cataclysmic reconfiguration in local retailing as giant national chains elbowed their way into the market - average annual job growth has just kept pace with overall employment expansion - up 2.4 percent.

Banks keep merging, but hiring by financial institutions keeps growing. A hiring burst of 4.4 percent last year boosts the five-year annual average to 3.6 percent.

Hiring in the burgeoning health services industry continues, but last year’s 3.2 percent expansion is down from the five-year average annual growth rate of 4 percent.

“This industry will continue to expand,” says Walsh, “due to the pressures of population growth, the aging of the populace, and rising expectations of the levels of services. The exact mixture and and shape of its individual components is an ongoing saga and will probably not settle into any predictable pattern (either industrially or occupationally) for quite some time.”

Youngsters to get crash course in business

The next generation of Washington business leaders will be baptized next week in Spokane.

About 200 high school sophomores and juniors from throughout the state are enrolled in Business Week ‘98, a crash course in what private enterprise is all about.

The intensive business-orientation is sponsored by the Association of Washington Business, this state’s largest and most powerful business lobby, which solicits its membership to fund scholarships. The program runs Sunday through Friday on the Gonzaga University campus.

Executives from businesses statewide will serve as instructors and guides for competitions that introduce students to the rigors of the marketplace as executives of their own mock companies.

This is the 16th year that Gonzaga University School of Business has hosted the event.

Think tank gives college aid program an ‘F’

The state’s college finance aid program received a failing grade in a special report by the Washington Research Council.

A study by the business-sponsored think tank concludes that the state program of financial aid to higher education is seriously flawed and “should be be completely overhauled.”

Although it ranks high in national comparisons of aid per student, the Washington State Need Grant Program does a poor job of helping disadvantaged students who are not financially independent of their parents, the council report claims. It adds that most of the aid goes to students over 25 and says too much goes to community college students.

To meet the challenge of expanding college enrollments, researchers reported, the existing grant program will have to be fundamentally redesigned.