The State of Working Washington 2009

The path out of recession and into prosperity for Washington's families

Report | December 1, 2009 | By Marilyn Watkins, Noah Giansiracusa

Executive Summary

Over the past decade, Washington State residents have become less economically secure. Owning a  home, sending kids to college, accessing medical  care, building an egg nest for retirement – these  basic hallmarks of the American middle class were  within reach forth typical family two decades ago,  but have become increasingly unattainable.

The “Great Recession” of 2008 and 2009 has further undermined economic security. The recession has been not only exceptionally severe, it also began before many families had fully recovered from the 2001 recession and its aftermath. At the end of 2007, on the eve of the latest round of widespread job loss, Washington had not regained the employment levels of the late 1990’s. The typical household and worker in the state also had less income in inflation-adjusted terms than had been the norm a decade earlier.

Median household income peaked in Washington in 1998 at $62,500 (in 2008 dollars), dropped sharply then partially recovered to $60,300 by 2007, and fell again to $56,600 in 2008. Washington men earned on average $266 per month less in 2007 and 2008 than in 2000.Women’s average inflation-adjusted earnings stayed level over the decade, but women continued to earn far less than men in every sector of the economy. As a result, women and their children are particularly likely to live in poverty and are especially vulnerable when the economy collapses.

Compounding the economic stress on families, over the course of the decade fewer employers provided health insurance and other benefits, more health care costs were shifted to individuals, college tuition shot up relative to median income, and the cost of buying a home skyrocketed.

While the majority struggle, a few are doing extraordinarily well. Some highly paid fields, most notably computer software publishing, have grown briskly since 2000. Those at the top of the income spectrum have by and large prospered. Workers earning at the 80th percentile and above have enjoyed real increases in their incomes over the past decade despite the roller coaster economy.  Thus inequality has continued to grow, as it has since 1980. In contrast, throughout the middle decades of the 20th century inequality lessened while the middle class grew. Now wealth is once again as highly concentrated in the hands of a few as it was in the late 1920s.

Despite the problems here, Washington residents in general have done better than people living elsewhere in the U.S. Job growth was stronger here than in most states from 2005 through 2007, and the full effects of the recession were not felt in most parts of the state’s economy until well into 2008. Washington incomes are higher than the national average, access to health insurance is greater, and rates of poverty lower.


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Posted in State Economy