Advertising

The Seattle Times Company

NWjobs | NWautos | NWhomes | NWsource | Free Classifieds | seattletimes.com

Business / Technology


Our network sites seattletimes.com | Advanced

Originally published August 5, 2007 at 12:00 AM | Page modified August 5, 2007 at 2:08 AM

Print

One thing missing in jobs boom: high pay

Of 240,000 new jobs created in Washington between 2002-2006, 69.5 percent pay less than a living wage.

Seattle Times business reporter

Like many people who have moved to Seattle in recent years, Brenda Portis had little trouble finding work. Well-paying work — that's something else again.

Portis, a 33-year-old certified nursing assistant, worked full time at a West Seattle nursing home until last month, tending to the needs of elderly and disabled residents. It's a fast-growing field, and one that suits her warm, outgoing nature.

But the pay — $12.50 an hour, or $500 a week before taxes — didn't go very far for Portis, the main wage earner in a family of six.

"I really like the work I do," she said. "If this job paid me more, then we'd be fine."

Four years into the recovery from the steep recession of the early 2000s, the state's economy is by most accounts humming like a well-tuned V-6 engine. More Washingtonians are working than ever before, the state unemployment rate hovers near a 30-year low, and last year the state's average wage rose 5.3 percent.

But those top-line measures don't tell the whole story: A Seattle Times analysis of state jobs data shows that most of the new jobs created in the current expansion don't pay all that well, and fewer high-wage jobs have been generated than during the late-1990s boom.

Consider:

• Of the 240,000 jobs created in Washington between 2002 and 2006, almost 70 percent were in fields where the average weekly pay was less than $832 a week (or $43,264 a year). That's the income calculated as a "living wage" in Washington for a family of two adults and two children, according to Penn State's Poverty in America project.

• Several of the fastest-growing job categories — in retail, hospitality, agriculture and social services — were at the lower end of the wage scale.

For instance, more than 26,000 administrative and support jobs have been created, with an average weekly wage of $605 — about $31,500 a year. General retailers added almost 9,900 jobs, paying on average $460.53 a week, or less than $24,000 a year. Bars and restaurants generated more than 20,000 jobs, paying an average of about $280 a week, or $14,550 a year, though those workers rely on tips for much of their pay.

• The current recovery has so far generated far fewer high-paying jobs than the last boom, which ran roughly from 1995 to 2000.

During those heady dot-com years, businesses statewide created more than 99,000 jobs paying more than $50,000 a year — 30.6 percent of all new jobs — primarily in Internet, telecommunications and other high-technology fields.

advertising

But between 2002 and 2006, just 57,000 jobs paying above $50,000 were created in Washington — 23.7 percent of the total.

• Many high-paying industries — notably telecommunications, electronics manufacturing and air transportation — have continued shedding jobs during the current recovery. Statewide, those three sectors combined to lose more than 11,000 jobs, with an average weekly wage of $1,275.59, between 2002 and 2006.

The data on average job counts and wage levels come from the unemployment-insurance tax returns filed by nearly all employers in the state. The Times examined the numbers for 1995, 2000, 2002 and 2006.

Observers suggest several reasons for the shift toward lower-paying new jobs: the long-term move away from manufacturing toward services; higher-wage jobs being outsourced overseas; and workers in a globalized economy having less leverage to negotiate raises.

But it's unclear whether the changing patterns mean the state's economy has fundamentally changed, or simply reflect the current economic cycle.

In any case, working full time in an in-demand occupation no longer guarantees financial stability — particularly in a pricey area such as central Puget Sound.

Nursing homes and residential-care facilities in Washington, for instance, added nearly 1,000 jobs last year; the state predicts nursing aides will be one of the fastest-growing job fields over the next year or so.

"I like taking care of people," Portis said. "No one asked to get sick or disabled. And there's always a job out there — I think this is one of the easiest jobs to find."

But, as she noted, turnover is high: "They can never keep all their positions filled." And her paycheck doesn't stretch far.

Portis, who moved here with her family last year from Iowa, immediately made 75 cents an hour more than in her last job. Nonetheless, she, her three daughters, the girls' father (who collects Social Security disability) and his mother live in transitional housing; food stamps supplement the grocery budget. Portis is 7 ½ months pregnant with her fourth child. She and her kids rely on Medicaid, the federal health plan for the poor, to pay for health care.

Now that Portis is taking time off to care for her ailing mother-in-law and prepare for birth, her lack of savings has become a more urgent concern.

The lease on her current house, near Renton High School, is up next month. Ideally, Portis said, she'd like a four-bedroom apartment, but the absolute most she could afford to pay in rent would be $800 or $900 a month. The three-bedroom flat they rented in Sioux City cost just $575 a month, she said.

"I believe in the man above," she said, "and I just hope everything's going to work out."

Support for jobs

The last full-blown recession in Washington was more than 25 years ago, when manufacturing and natural-resource industries bulked a lot larger in the state economy than they do today. Those industries tended to shed workers by the thousands during recessions, but rehired them fairly quickly once economic conditions had improved.

As a rule, economists say, higher-wage jobs support lower-wage ones: The Boeing machinist buying camping gear helps sustain the sales clerk who sells it to him. As high-paying jobs boomed during the 1990s, so did those further down the wage scale: The same tech boom that generated 14,485 software jobs (average pay, including options payouts: well over $250,000) created 36,430 administrative-support jobs (average pay: about $23,560).

But until fairly recently in the current expansion, lower-paying jobs were being created without much of a bump in higher-paying jobs. So where was the support coming from?

Housing. More specifically, the housing boom that has boosted home values across much of the state and sent Seattle-area home prices into the ionosphere.

As house values soared and mortgage rates fell, homeowners had the best of both worlds. Even if you lost your dot-com job and were temping to pay the bills, you could refinance your mortgage or tap into your home's equity to maintain your spending levels. And tens of thousands of people did just that.

"The housing boom definitely brought about a different kind of growth," said Andrew Gledhill, who tracks Washington for the research firm Moody's Economy.com. Especially early in the recovery, he said, retail jobs grew much faster in Washington than in the nation at large.

"There've been few other periods in history when home values were appreciating so much and people were borrowing so aggressively on the value of their homes," Gledhill said.

Until about 2005, the state's fastest-growing job categories tended to be either real-estate related (construction, mortgage banking, real-estate brokers, etc.) or in the retail and hospitality industries.

But as Kriss Sjoblom, an economist at the business-oriented Washington Research Council noted, "Construction can carry an economy in the short term, but not in the long term."

Housing tracts, office buildings and shopping centers are built on the expectation of future growth, Sjoblom said — that businesses elsewhere in the economy will hire more people, who will then buy homes, work in offices and go shopping.

Indeed, as the state economy kicked into high gear in 2005 and 2006, more higher-paying jobs have been created than earlier in the recovery. Aerospace, for example, shed 27,500 jobs between the Sept. 11 attacks and mid-2004, but has regained 17,600 since then, according to the state Employment Security Department.

However, many of the state's core industries — those that both employ a lot of people and pay well — haven't grown at the pace seen in previous years.

Consider aerospace again. The last time the industry went on a hiring binge, between 1996 and 1998, it added 33,100 jobs in the span of 2-½ years.

Boeing, which employed 104,000 Washingtonians at the peak of the last cycle in June 1998, reported just 71,781 Washington workers at the end of July — despite the big buildup for the new 787 Dreamliner jet. The leaner payroll is a consequence of the company's aggressive streamlining of its production processes and outsourcing of much work previously done in-house.

Outsourcing has acted to hold down wage levels as well as job counts, said Marilyn Watkins, policy director of the labor-backed Economic Opportunity Institute in Seattle.

Referring to Boeing work now done by outside contractors, Watkins said: "These people are still getting paid a decent wage, but they don't have the same kind of pay and benefits the Machinists traditionally have gotten."

Even software, which barely took a breather during the recession, isn't adding to payroll the way it used to. The software sector routinely posted job growth in double digits during the 1990s, but since the end of the recession growth has been mostly in the 6 to 7 percent range.

And some high-wage industries — notably telecom and air transportation — continued shedding jobs well into the recovery, though they now seem to have bottomed out.

Sjoblom pointed out another factor: The recession's heavy impact on the Puget Sound region worked to hold down wage levels statewide.

Whether you're an electrician or a convenience-store clerk, you're likely to earn more in the Seattle area than anywhere else in the state. But because this region was mired in recession longer than the rest of Washington, Sjoblom said, more new jobs were created in lower-paying parts of the state.

While the high-paying sectors are still adding jobs, they're no longer doing so at the torrid pace of 2005 and most of 2006, said Evelina Tainer, chief economist for the state Employment Security Department.

Tainer said she expects the middle tier of industries — those paying $31,000 to $48,500 a year — to lead statewide job growth for the foreseeable future.

"It doesn't make sense that you'd continue to get the heaviest job growth in the highest-wage industries," she said.

The Employment Security Department's April survey of job vacancies found that, of the 87,447 openings reported statewide, 46 percent paid less than $10 an hour; another 26 percent paid between $10 and $15 an hour. Though registered nurses, with a median hourly wage of $23.55, were most in demand, the next highest-demand jobs were cashiers, farmworkers and retail salespeople — all offering a median wage of $8 an hour.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com

Copyright © 2007 The Seattle Times Company

UPDATE - 09:46 AM
Exxon Mobil wins ruling in Alaska oil spill case

UPDATE - 09:32 AM
Bank stocks push indexes higher; oil prices dip

UPDATE - 08:04 AM
Ford CEO Mulally gets $56.5M in stock award

UPDATE - 07:54 AM
Underwater mortgages rise as home prices fall

NEW - 09:43 AM
Warner Bros. to offer movie rentals on Facebook

Advertising

Video

Marketplace

His passion for Pantera began as a teennew
"I love my car because ... everything about this car was exciting to a 15-year-old car nut." — Mike Thomas, Covington
Post a comment

Advertising