The State of Working Washington 2005

Report | October 1, 2005 | By Marilyn Watkins, Marilyn Watkins, Marilyn Watkins

Executive Summary

After a lingering recession, jobs are increasing again throughout Washington. New jobs are opening across almost all sectors. The typical Washington worker continues to earn more than workers in most other states. Many Washington residents are doing very well.

Nevertheless, economic insecurity and hardship have increased among Washington’s working families since the new century dawned. Poverty rates rose by 21% among the general population and by 19% among children between 2000 and 2004. In 2004, 13% of all Washington residents and 17% of children lived below the poverty line. The recession is officially over, but job growth has not caught up with population growth. Rates of long-term unemployment remain high, and more people are working part-time because they cannot find a full-time job. Those with jobs are less likely to receive health insurance, paid leave, or a retirement plan.

Income disparity among Washington families also continues to grow. With wages adjusted for inflation, middle and low-income men earned about the same per hour in 2004 as in 1990, and less than their counterparts did in 1979. High-income men, meanwhile, have enjoyed real salary increases. The median household income in the state has risen largely because women are earning more, while still typically making $3.31 less per hour than men.

Financial security for Washington’s working families is strongly affected by where they live and by the experience and education of their wage earners. At the same time, larger economic trends and forces of globalization and consolidation affect workers whether they live in Seattle or Sunnyside and whether they formerly built airplanes, canned asparagus, or designed software. These same larger forces affect workers across the nation.

From the employment peak in November 2000 to November 2002, Washington state lost nearly 66,000 non-agricultural jobs. Since then, jobs have gradually increased, but in annual averages, Washington had 9,050 fewer non-agricultural jobs in 2004 than in 2000. The number of jobs continues to expand in 2005. In July 2005, Washington had 83,000 more jobs than in July 2000. However, full recovery from the recession is far from complete.  Washington’s population grew by over 6% between 2000 and 2005. Washington would have to end 2005 with 167,000 more jobs than existed in 2000 in order to enjoy the same rate of employment.

While job growth is taking place across the board, the structure of the economy is changing.  Many unemployed workers will not be able to find the same kind of jobs that they lost.  Manufacturing shed 108,000 jobs between July 1998 and February 2004. Even though manufacturers have been adding jobs since then, the long-term shift away from manufacturing is a nationwide trend that is unlikely to reverse. Manufacturing represented 26% of Washington’s non-agricultural jobs in 1950, 13% in 1998, and only 9.7% in 2004. On the other hand, 2004 ended with more jobs in health care, restaurants, construction, and finance than before the recession. Some growing jobs pay well, but many of the growing occupations do not match the lost manufacturing jobs in wages and benefits.

Some regions of the state have added jobs steadily since 2000, while others are still struggling to recover lost jobs. Bellingham, Bremerton, Olympia, and the Tri-Cities largely escaped job losses during the recession and have added more than enough jobs since 2000 to keep pace with population growth. The Vancouver, Spokane, and Tacoma regions experienced economic downturns, but resumed growth in 2003 and have pulled back above their pre-recession job numbers. Employment in the Yakima and Wenatchee areas, where nearly one in five jobs is in agriculture, has stayed fairly level. The Seattle metropolitan area, which includes King and Snohomish counties and provides nearly half the jobs in the state, continued to lose jobs through 2003 when most of the rest of the state was turning around economically. March 2004 was the first month in which the Seattle area posted an increase in jobs over the same month of the previous year. In July 2005, King county employment remained nearly 25,000 behind the July 2000 level, while Snohomish county was more than 10,000 jobs ahead.

The lingering recession and slow growth of the first years of the 21st century are in sharp contrast with the steady job growth Washington experienced during the1990s. Even though that decade also opened with a recession, every year of the decade posted gains over the previous year; overall employment in the state grew by 26.5% between 1990 and 2000,  outpacing population growth.

Unemployment in Washington increased from 5% in 2000 to 7.4% in 2003. By July 2005, the seasonally adjusted rate had fallen to 5.7%. Despite its continuing jobs deficit, King county still had one of the lowest unemployment rates in the state in 2004, at 4.6%. Workers under age  25 and those without high school diplomas saw their unemployment rates begin to climb in  1999, a year earlier than the general workforce. In 2004, unemployment remained at 15% for non-high school graduates, while unemployment for college graduates was only 3%.


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