Many still stuck in idle as job growth plods along
The Great Recession has changed the composition of the labor force.
Special to The Seattle Times
The most arresting piece of information from last week’s employment report was that Washington must add 8,500 new jobs per month to reach its pre-recession unemployment rate within three years.
The state has added nowhere near that on a consistent basis. In March, considered a good month, 6,700 jobs were gained.
Note that this doesn’t account for growth in the working-age population. So even more robust employment would be necessary to really make up for the losses and catch up.
Yet the clock is ticking. A recession has come along about every seven or eight years in the post-World War II era.
A fresh downturn means it would take even longer to fill the gap. Potentially tens of thousands or more would never find work.
In March, nearly 220,000 Washingtonians were officially unemployed, and thousands more were either stuck in part-time jobs but wanting full-time work or had dropped out of actively seeking employment.
Nationally and statewide, this weak labor market is a key fuel behind numerous other problems, from inequality to food insecurity.
For example, without more demand for workers, most wages won’t rise. It makes economic mobility much more difficult.
It says something else: American recoveries are getting weaker each time the economy hits a recession.
To be sure, the March jobless rate is a big improvement over the 10.2 percent suffered in 2010. To find something comparable, one must go back to the severe recession of 1982, when state unemployment peaked at 12.2 percent.
The wider U-6 measure, which counts part-timers seeking full-time jobs and discouraged workers, averaged 14 percent last year.
It was still slightly higher than the national rate but a big improvement over the worst of the downturn. Then it clocked in at 17 percent, among the worst in the nation.
In February, Washington’s seasonally adjusted unemployment rate ranked 28th among the 50 states and District of Columbia.
North Dakota, land of the big fracking play, showed the lowest rate (2.6 percent) and Rhode Island the worst (9 percent).
But the rate of job growth continues to be a challenge.
In February, for example, employment grew a tepid 2 percent year-over-year, and with weaker momentum than was seen in the same period in 2013.
In the 2000s, when national job growth was the weakest since the Depression, the best increase posted by Washington was 3 percent in January 2006. That compares with nearly 5 percent in the mid-1990s.
The aftermath of the Great Recession has also changed the composition of the labor force.
Relatively fast-growing jobs are usually found in jobs that pay less, often not even providing full-time work.
For example, food services and hotel positions have been increasing at a rate of 3 or 4 percent year-over-year.
Overall retail employment hit a new high of 332,300 in January, growing at 2.4 percent. But, tellingly, average weekly hours slipped to 30.4 hours, a post-recession low.
Well-paying manufacturing employment is down more than 74,000 from 1998. Growth in these sectors is off so far this year.
One big buffer against the recession was Boeing, especially the hiring necessary to fix the troubled 787 Dreamliner.
Overall, aerospace product and parts manufacturing employed 94,400 in January. This is the largest employment in the sector since the late 1990s.
Yet it was down 2.6 percent in January compared with the same period in 2013. Growth has been declining since 2011.
Sawmills and wood preservation employ almost a third less than in 2006. Paper-manufacturing jobs have fallen by half since 1990. These were the historic bulwarks of small-town Washington, so no wonder many counties still have extremely high unemployment.
Seattle has been an island of opportunity. The jobless rate for Seattle-Bellevue-Everett metro division was 5.2 percent in March. At one point last year, King County’s rate was in the 4 percent range, what economists consider full employment.
Professional, scientific and technical services, heavily clustered here, came near a record high of 175,200 in January.
Information employment reached more than 106,000 statewide, but again most of that happens here.
Yet even Seattle has cause for concern. In addition to the leakage of aerospace work, the year-over-year growth of professional, scientific and technical services jobs was only 0.5 percent in January, lower than any recent recovery. Information jobs increased 1.4 percent.
According to the MetroMonitor program of the Brookings Institution, Seattle-Tacoma-Bellevue employment increased only 0.3 percent from the edge of the recession to the fourth quarter of 2013. That ranked us No. 36 among 100 metro areas.
(Brookings assesses metropolitan statistical areas, which sweeps in the higher unemployment of Tacoma.)
The degree to which the great American jobs machine remains broken was the topic of a new report from the Federal Reserve Bank of Atlanta.
In the recessions from 1950 to 1989, it took an average 10 months nationally to recover the lost jobs. That rose to 23 months in the 1990-91 downturn, and 38 months after 2001.
Now, nearly five years after the end of the Great Recession, we still haven’t recovered.
The reasons range from government austerity and offshoring to a skills mismatch and the continued hole in demand, which is made worse by the stagnant or falling wages for most Americans.
The other Washington has given up on solutions or even intelligent responses. But don’t forget: The clock to the next downturn is ticking.
You may reach Jon Talton at email@example.com
About Jon Talton
Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest