EVERETT —The world was a little less bright, the future a little more bleak.
A decade ago, the U.S. slipped into the worst recession in a generation after the collapse of the real estate market.
People lost their jobs, their homes, their savings. It led to a wholesale reshuffling of industries across the country and locally.
Large national banks and small community ones shut down. Frontier Bank and Cascade Bank in Everett and City Bank in Lynnwood closed their doors, their assets sold to healthier banks.
Home builders were hit the hardest. About one in 20 jobs disappeared in most industries in Snohomish County. Construction lost more than one in three jobs in the county.
The stock market plummeted and unemployment skyrocketed. At its worse, in early 2011, 43,419 people were on unemployment assistance in Snohomish County — 11.2 percent of the workforce.
Since then, the economy has recovered, slowly and haltingly and has finally made up ground. Home prices in the Puget Sound area are higher than before the recession. The stock market is breaking records. The unemployment rate is well below 5 percent. Still, the recession haunts many of those who suffered through it.
“We’re booming, but we’re doing so looking over our shoulder because the scars of the Great Recession are so profound,” said Mike Pattison, government affairs manager of the Master Builders Association of King and Snohomish Counties.
“People are moving forward, but they’re doing so cautiously. We saw too many of our friends and neighbors go bankrupt for it not to affect us.”
No matter how much better things get, the recession sticks in people’s minds today.
“I think it will always be in the back of people’s memories, but I think the economy has been strong and people are more willing to expand and do things they weren’t going to do a few years ago,” said Mark Duffy, president and CEO of Mountain Pacific Bank. “I tell people I learned a lot in the recession and I hope I never have to use what I learned again.”
More jobs, stagnant wages
The recession began in December 2007 and ended in June 2009, according to the National Bureau of Economic Research, a private, nonprofit, nonpartisan organization that tracks recessions and expansions.
The number of jobs has increased in Snohomish County. There were 363,731 people employed in the county in September 2007 and there were 424,271 people employed in September, according to the Employment Security Department. But the unemployment rate was lower 10 years ago. It was at 3.5 percent in October 2007; 10 years later, it was at 4.1 percent.
While there are more jobs, there also are more people. Snohomish County’s population has grown by more than 100,000 in the past decade, since the start of the recession — from 689,314 in 2007 to 789,400 this spring, according to Washington Office of Financial Management. While jobs are back, wages have grown slowly. Typical workers in the county have seen their salaries increase just 6.9 percent over the past decade, said Anne Vance-Sherman, the state’s labor regional economist.
At the same time, costs have risen. Rents went up 20 percent during the same period, according to the U.S. Census’ American Community Survey.
“That’s the squeeze,” Vance-Sherman said.
Only the top wage earners have seen substantial wage growth since the recession. In Snohomish County, people in the top 10 percent income bracket have seen their salaries grow 30 percent over the past decade. Salaries for those workers went up from an average $80.54 an hour in 2007 to $104.46 an hour in 2016, according to Employment Security Department. (The 2007 hourly wages are adjusted for inflation.)
That’s likely changing right now, said Eric Sprink, president and CEO of Everett-based Coastal Community Bank. Pressure has mounted in the past year to increase wages to retain and attract qualified employees, he said.
“I know it hit a lot of our business owners as we talk to them,” Sprink said. “The employee question is one of the biggest questions they’re facing. We talk to our customers about that right now. Can they find employees? What’s it cost to get their employees? How do they keep their employees?”
As a whole, Snohomish County was sheltered somewhat from the recession by the growing population but also by a surge in aerospace employment and proximity to Canada. During the height of the recession, the Canadian dollar proved strong compared to the U.S. dollar. And Canadians traveled south to spend money.
“The Canadians were great,” said Sprink, of Coastal Community. “Their dollar was so strong and the U.S. dollar was so weak that they were coming down here to shop, buy, stay and gamble.”
Boeing added thousands of workers during the first years of the recession, many in Everett. In January 2007, the company employed 68,570 workers in Washington, according to the company’s website. The workforce went up to 81,978 in the state by December 2011, or 13,408 additional workers. In the past year, Boeing has shed thousands of jobs.
“We’ve got a very large manufacturing industry and aerospace manufacturing was hiring very rapidly,” regional economist Vance-Sherman said.
Industries suffered, thrived
The housing industry suffered the most during the recession. In September 2007, the construction industry employed 26,100 in Snohomish County. That dropped to 15,800 by September 2011, or a 39 percent drop. At its lowest point, in January 2012, the construction industry employed only 14,100, but construction work is seasonal and often sees lower employment figures in winter.
A decade later, the construction industry still employs less than it did before the recession in Snohomish County. This past September, the industry employed 2,400 fewer employees than 10 years before. It’s not because of lack of work. It’s because so many left construction and didn’t come back, said Pattison, of the Master Builders Association.
“When it comes to labor, there are definitely many who left the industry and did so permanently,” Pattison said. “It’s one of our biggest challenges — finding construction workers and skilled laborers to fill open positions.”
Now, Master Builders are doing outreach to younger workers to get them to enter the industry, which pays well and is rewarding, Pattison said.
“There is no question that the recession left an indelible scar, not only on builders and developers but everyone who worked in the industry,” Pattison said. “It made people gun-shy, and I don’t blame them for being gun-shy. Things are better and seem to be pretty stable. It’s safe to get back in the water.”
Peter Cattle is a real estate agent who is affiliated with Sterling Johnston Real Estate. He’s worked in the business in the county since 1983. He’s seen ups and downs, but nothing like the recession.
“It was like a faucet had been shut off or a light switch had been turned off,” Cattle said. “The typical regular business I would get, which would be repeat or referral business, just dried up.”
And it did so for the thousands of real estate agents. Many quit the business. The Northwest Multiple Listing Service tracks agents in the county. In December 2007, there were 3,867 agents in the county. That fell to 2,568 in December 2012 — a drop of more than a third.
Cattle continued as a real estate agent, although he saw his income drop dramatically. The real estate firm he worked with at the time started handling foreclosed properties.
“The first foreclosure house where I had to go up and knock on the door, literally the young mother opened the door holding a baby and a toddler was on the floor,” Cattle said. “That was disheartening.”
The only bright spot he could find is there was some money available to people to help with moving expenses.
One industry that did not suffer was health care. About 26,300 people were employed in the industry in 2007 in Snohomish County. Since then, the county added 7,800 jobs to grow to 34,100. That’s a whopping 30 percent increase in just a decade. (One caveat: The state lumps health care and private school education jobs together. Those numbers primarily are health care jobs, but some are private school workers.)
The increase in health care workers in the county tracked what happened nationally, said Bianca Frogner, an associate professor of family medicine at the University of Washington School of Medicine. She said health care issues don’t go away during recessions and, if anything, health issues get worse, with more stress and depression.
The population is also aging and requires more medical care, Frogner said. Most of the new jobs in health care are lower-salaried jobs that require only a high school education.
Hardship to remember
The recession dramatically changed the banking landscape. When Mountain Pacific opened in 2006, there were 99 banks headquartered in Washington and now there are 46 — less than half, said Duffy, Mountain Pacific’s president and CEO. There were 13 banks headquartered in the county. Now there are six.
He thinks there might be more bank consolidation in the future. With increased regulation and scrutiny and worries from the recession, very few banks have been started in the past 10 years, Duffy said. He said it’s fewer than 10 nationally and might be less than five.
Mountain Pacific is one of just two Everett-headquartered banks left. The other is Coastal Community Bank. Coastal’s CEO Sprink said his bank tracks how much business it does in construction, how many dentists it does business with, how many lawyers it does business with and how many restaurants it does business.
“As a small business ourselves, we diversified, because we’re trying to be more resilient when the next time comes,” Sprink said. “We carry more capital. We carry more liquidity. We can’t time the market, and we’re not trying to. We know eventually a dip will come. When and how bad are the questions.”
The lessons from the recession are worth remembering, Sprink said.
“As bad as it is, there’s a silver lining, hopefully,” Sprink said. “For the next 40 years, I pray for our leaders and I pray for our business owners and myself included that there was a lesson there, learn from it.”