Boeing woes continue to drag down local economy

By Bryan Corliss

Herald Writer

Snohomish County has yet to feel the full economic impacts of the layoffs at the Boeing Co., state and local officials say.

As Boeing shareholders gather in Chicago for Monday’s annual meeting — the first in the company’s new headquarters — the communities Boeing brass left behind remain in "kind of in this no-man’s land," said Donna Thompson, an economist with the state’s Employment Security Department in Everett.

"We’re getting hit every month," she said. "More and more, there’s going to be laid-off Boeing workers flooding the job market."

Snohomish County aerospace companies had cut 3,200 jobs through March, compared to March 2001. Overall, about 5,100 high-paying manufacturing jobs have evaporated around the county, and total employment has dropped from 215,000 last year to 206,000 last month, Thompson said.

But things could be worse, she and others said. Employment in most other nonmanufacturing sectors has held steady.

And so far, the laid-off Boeing workers have had severance pay and unemployment benefits to help them get by, said Bill Borders, the labor liaison for United Way of Snohomish County.

"They’re probably staying afloat," he said. "We’re kind of in the lull of the storm."

So far, the layoffs have not resulted in sharp drops in the county’s retail sector. Retail spending actually climbed during the fourth quarter of 2001, the most recent period for which figures are available. That was due to increased auto sales, brought on by aggressive buyer programs from national manufacturers.

And employment among county retail businesses has remained stable at just over 41,000 people through the first three months of the year, Thompson said. That’s down 700 from the same period last year.

"It’s holding up very well, everything considered," Thompson said.

Snohomish County’s retailers have been sheltered somewhat by the fact that 100,000 county residents commute to jobs in King County, Thompson said. The metropolitan Seattle economy as a whole is less dependent on aerospace jobs than Snohomish County, and as a result, King County’s jobless rate remains lower.

Low interest rates have kept finance, insurance and real estate businesses busy, too, Thompson said. People still are buying and selling homes and refinancing mortgages.

But construction has softened, she said, shedding 1,800 jobs over the past year. And the number of people working jobs through temporary agencies is down by about 1,200, Thompson noted. Boeing and other aerospace companies hire temp workers for special projects, and those jobs are the first to go in a downturn, she said.

March’s unemployment numbers showed 3,000 fewer people looking for jobs in the county. A number of those people left for Texas and jobs building the Joint Strike Fighter for Lockheed-Martin, said Thompson and Charles Collins, a career counselor at Boeing’s Career Transition Center in Renton.

Lockheed is "scraping the creme de la creme," Collins said.

Another 3,500 Puget Sound-area Boeing workers have decided to go back to school. Those people also aren’t counted in the unemployment numbers, Thompson said.

Beyond the official numbers, the increasing unemployment is starting to affect local charities. The number of people being served at county food banks has increased, said Virginia Sprague, who oversees the Volunteers of America warehouse in Everett, which supplies food banks countywide. In February, 32,200 people were getting help from food banks. That’s up from 28,534 for the same month last year.

But Borders said crunch time still is coming for many people. Boeing laid off 5,000 Puget Sound-area workers in the first round of job cuts in December. They’re now approaching their fourth month out of work and may have used up their severance pay.

"I’m concerned about the local economy six months to a year after folks leave the company," Borders said. At that point, they will have exhausted their extended unemployment benefits.

"That’s where we’ll see some real impact as far as the social service network not having the capacity to absorb that need," he said.

Some economists are projecting the national economy will have recovered by then, Thompson said. If that happens, it will help nonaerospace manufacturers in the county — boat builders and truck parts makers, she said. It also will bolster tourism, which is in a slump.

But the question is whether those increases will be enough to offset the Boeing layoffs, which will continue through August, Thompson said.

Collins said some ex-Boeing people are finding work — civilian jobs for the military, for example. People with project management, computer and procurement experience also are finding jobs, he said, and some people with degrees are looking into going back to college to become teachers.

The laid-off workers, by and large, are coping, Collins said, "although of course some are still angry or depressed."

Thompson said she sometimes worries that she’s being too pessimistic.

"The national economists sound a little more optimistic than I am, but I’m here," she said. "It’s not over for us here. Snohomish County’s economy has not started to recover."

Herald writers Kathy Day and Sharon Salyer contributed to this report.