Area workers’ paychecks growing

Spokane’s economic resurgence in the past year has lifted wages nearly to the levels of mid-2000, the previous high-water mark here, area economists say.

Federal wage and employment data show that Spokane County wage earners’ biggest paychecks were handed out in mid- to late-2000, just before the national economy soured.

Data from employer surveys show that while Spokane’s manufacturing sector was flattened by the recent downturn, the economy has rebounded through growth in two key sectors: financial services and the health care industry, said William Dillingham, regional labor economist with the state Employment Security Department.

The county has gained more than 1,200 jobs in financial services. Those are mostly with insurance firms, banks, credit unions and mortgage companies. That growth was fueled by low interest rates and strong residential construction, said Dillingham.

Spokane, already a strong regional service hub for the medical industry, also added about 1,000 health-care jobs in the past two years, he said.

Over the past year, other Spokane job sectors that have grown dramatically include construction — which swings up and down with the economy — and the broad area of business services, Dillingham said.

Phil Kuharski, an economic analyst and consultant, agreed with Dillingham’s numbers.

“I am impressed,” Kuharski said, “that a large number of the 4,500 to 4,800 jobs lost in manufacturing have been replaced by comparable health-service jobs.”

His analysis has found that a fair number of jobs created by the area’s hospitals and clinics are paying well above the county average of about $33,000 per year.

“When you see that some of those higher-level medical jobs are paying $43,000 or more per year, it helps to offset the losses of some of our manufacturing jobs,” he said.

But Kuharski, a retired Spokane bank executive, also sounded some cautions. He noted that 2003’s year-end salary numbers may look close to or equal to 2000’s, but they have not been adjusted for inflation. If the roughly 5 percent inflation index were added to the 2003 wage levels, Spokane hasn’t yet surpassed the county’s 2000 high mark, he said.

Kuharski and a fellow economist, Washington State University Professor Donald Epley, both said they see Spokane County surpassing the 2000 wage and salary benchmark sometime later this year.

Epley, whose WSU Spokane students help produce a quarterly economic activity index for Spokane, said his numbers showed “we’re within 1 to 2 percent of the previous high point” for area wages.

Since total wages in Spokane County tend to grow between 1.5 percent and 2 percent a year, he expects to see the economy here hit a new peak later this year.

Dillingham, who just left his state job to work for the U.S. Geological Survey in Virginia, said his data is a snapshot and not a full portrait of the area’s wages.

In the fourth quarter of 2000, Spokane County had 192,863 workers in both private and government jobs, the highest job total ever. In the third quarter of 2000, the county had the highest average worker salary, $2,576.41 per month, according to a federal survey.

In the fourth quarter of 2003, Spokane County’s wages averaged $2,618, according to the data Dillingham used. The number of county workers was 192,018, slightly below the 2000 high point.

Kuharski, however, said those numbers don’t suggest the even bigger job rebound that’s occurred in the county. Using a different set of numbers, called “civilian labor force” jobs, Kuharski said Spokane has more than 209,000 people employed. The previous high mark in civilian labor force jobs, 203,000, occurred in 2000.

“More Spokane County residents have jobs today than at any time in our history,” Kuharski said.

The difference between the two surveys results from varied ways of tracking workers. Only civilian labor force takes into account people who’ve started their own businesses, farm workers and family members who work part time in a family business.

The recent surge in jobs here has left Spokane County just below the national average. In May, Spokane’s jobless rate was 5.5 percent, while the national average the same month was 5.6 percent. For most of the past three years, Spokane’s and Washington state’s average unemployment rate exceeded the national average, Kuharski said. Washington’s unemployment rate still is higher than the national average, at 6.1 percent in May.Both Kuharski and Dillingham agreed Spokane’s true jobless rate — if people who’ve stopped looking for work were added — would be higher in Spokane.

“But on the big level, what the numbers show,” Dillingham said, “is our economy is more diverse than it used to be. Unlike other economies that are based on one or two industries, we’ve developed a range of competitive industries, including medical, regional banking and retail trade. That’s been our saving grace.”