Everett, Wash. Published: Wednesday, March 8, 2006
Public, private investments are paying off in job growth
John Burbank / Syndicated Columnist
It finally looks like our state's economy has built up some good, job-producing momentum.
Let's cheer the numbers - and consider why they are so positive.
Last year Snohomish County gained close to 16,000 net new jobs, while Pierce County picked up more than 8,000.
Statewide we have pushed down our unemployment rate faster than the nation as a whole. It is now 4.7 percent, the lowest since 1999. Payroll employment has increased twice as fast as the national rate.
This is a broad-based and shared recovery. The construction, professional services, retail trades, manufacturing, education and health-care sectors each gained more than 10,000 jobs this past year.
The greatest job growth occurred in Snohomish County (more than 7 percent), and Whatcom County and the Wenatchee area ( 4 percent increase).
And the good times continue to roll. In January alone the state gained more than 13,000 jobs.
Spokane is a particularly compelling story. Spokane now has more than 4,600 new jobs compared to a year ago. Looking back over the past 10 years, manufacturing, retail trade, financial, professional and business services, as well as education and health services have all added more than 5,000 jobs each.
And not only are there more jobs in Spokane, but they pay better. This past year, for the first time in five years, wage growth in Spokane exceeded the rate of inflation. So workers are getting an actual raise.
Part of the credit must go to the state minimum wage, which is indexed to inflation. While minimum-wage workers don't get a raise above inflation, the fact that the minimum wage includes an annual cost-of-living adjustment, the way Social Security does, means that at least these workers don't lose ground.
Part of the credit for wage growth also goes to increases in productivity.
Productivity measures how many things and products or how much information a worker can produce over time.
Increases in productivity, thanks to innovations and investments, enable workers to produce more in the same amount of time. In my line of work, consider the efficiency of a desktop computer over a typewriter.
Businesses strive for increases in productivity. Where do they come from? A lot is generated by private entrepreneurial initiative. Such initiative benefits from and builds on government funding of basic research, K-12 education and higher education, as well as an efficient transportation infrastructure.
Consider that the Internet started from a U.S. military project, that an educated workforce is essential for implementing innovations, and that with global markets transportation is a key to new markets, profits and jobs.
We recognize productivity in high-wage industries like aerospace. It is also an important factor in lowering costs and increasing profits in low-wage industries. For example, retail trade productivity has increased by more than 25 percent since 2000.
Our minimum wage that keeps up with inflation, plus market-driven increases in productivity, create a recipe for economic success that can be enjoyed up and down the income ladder. That's the key - economic growth that helps all of us. Ultimately, that's how employers and workers can prosper.
All this translates into increases in family income. Spokane provides a great example. The number of workers making less than $20,000 in Spokane dropped by almost 5,000. That means that the number of "working poor" jobs fell by more than 10 percent. Where did these jobs go?
They became better paying jobs, so the number of workers making between $20,000 and $30,000 increased by that percentage.
And this had a chain reaction effect up the income ladder. While more than 3,000 fewer workers made between $40,000 and $50,000, almost 4,000 more workers made between $50,000 and $60,000.
There was some push even at the higher income levels, with significant shifts in family incomes from between $70,000 and $80,000 to family incomes between $80,000 and $90,000.
Where does this new money go? Back into the local economy, creating more jobs and growing economic prosperity. Let's not forget that we still need thousands of more jobs - 70,000 in fact - to bring us back to full employment and keep up with population growth in our state.
But we have some fundamentals in place for job and income growth: the blossoming economy, increases in productivity, a minimum wage that keeps up with inflation, and public investment in education and transportation. It's a working formula.
