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Spokane, Washington  Est. May 19, 1883
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News >  Business

Workers gain against inflation

Spokane County’s rapid economic rebound has produced the first increase in earning power area workers have had since 1999, a state economist said Monday.

While wages have increased modestly since 1999, Spokane workers lost ground as the county’s cost-of-living impact was larger than salary increases, said Jeff Zahir, regional labor economist with the state Employment Security Department.

But in the first quarter of 2005, Spokane wage-earners actually saw real gains, compared to the cost of living, Zahir said.

But any celebrating workers did was silenced in the past two months as spiraling gas prices eroded that gain, he added.

“Whatever good feelings people (in Spokane) had earlier this year are probably gone, due to the price hikes they’ve seen (for gas),” Zahir said. Nationwide, the price of fuel jumped about 15 percent since spring, Zahir said.

Even so, Zahir said the wage gains are a positive sign.

From 1999 to late 2004, Spokane County’s median wage increased 1.9 percent per year. Spokane’s cost of living — based on the consumer price index — rose 2.17 percent per year from 1999 to 2004, said Zahir.

The first quarter 2004 median wage in Spokane County was $27,167. A year later, it grew 3.5 percent, to $28,104.

The consumer price index rose only 2.8 percent in that 12-month period, Zahir added.

The net increase was more due to a drying up of the labor pool, not a decline in cost of living, he said.

As more people in Spokane found jobs, employers had to pay more for qualified workers, he said.

“If you have a shortage of labor, I would expect the price of labor to go up,” said Zahir.

Washington state and Spokane County both showed similar jobless numbers Tuesday. The state unemployment rate rose from 5.6 percent in July to 5.8 percent for August. Spokane County’s rate inched up from 5.4 percent to 5.8 percent, Zahir noted.

While Spokane’s unemployment rate in August grew, that number results from the larger number of residents entering the workforce. Spokane County gained about 900 net new jobs from July to August, the state data say. But in that time 1,700 Spokane residents started looking for work, Zahir said.

Next month’s report will add more light on what’s happening to the economy, Zahir said. “Next month, we’ll see what effect the end of the summer and the beginning of school means to employment,” he said.

That number will add back in nearly all the state jobs for teachers and school staff. It also takes out the large number of part-time student workers who fill jobs during the summer, he said.

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