Low-wage jobs remain dominant in Whatcom County, but not growing

THE BELLINGHAM HERALDJanuary 13, 2014 

With more than half of all jobs in the low-paying retail and service industries, Whatcom County's median household income has remained below state and national levels for the past decade, according to the latest data from the U.S. Census Bureau.

If there's an upside, it's in the trends since the recession peaked in 2009. From 2009-12, incomes declined in Washington state and across the U.S., while they held steady in the county. Service and retail jobs grew relative to other sectors in the state and the nation but remained flat in Whatcom since 2009, according to the American Community Survey released in December. The Census Bureau surveys a sample of the population every year to update the census data it collects every 10 years.

Politicians are not short on ideas for how to boost incomes in Washington and across the country. One idea gaining traction in liberal cities such as Seattle is a hefty increase to the minimum wage, to $15 an hour. Democrats in the U.S. House of Representatives introduced a bill this month that would raise the national minimum wage 39 percent.

Even without a major policy change, a study projecting job growth to 2020 shows wages climbing in the state.

National median household income dropped 3.1 percent from 2009 to 2012, after adjusting for inflation. This might run counter to expectations, given that 2009 was the low point of the recession, and the economic recovery was well underway in 2012.

The same trend appears in Census Bureau data from Washington state: Incomes declined 2.3 percent in inflation-adjusted dollars from 2009 to 2012.

Whatcom's income has been flat over those three years - about $52,000 in 2012 dollars. Washington's median income was $59,374 in 2012, and the national median was $53,046.

Incomes have declined as the economy has recovered because low-paying jobs filled the void left by the middle-income jobs lost to the recession. According to a 2012 report from the National Employment Law Project, 60 percent of the jobs lost in the recession were "mid-wage," while 58 percent of jobs gained in the recovery were lower-wage.

Last month's Census Bureau data confirms this. The retail and low-wage service industries went from 46 percent of U.S. jobs in 2007, before the recession, to 48.2 percent in 2012.

In Washington state, retail and service jobs went from 44.6 percent of all jobs in 2007 to 46.5 percent in 2012.

These categories, which include store clerks, restaurant staff, casino employees and day-care workers, make less money on average than workers in other industries.

Whatcom's proportion of retail and service jobs has remained high over this period - about 51 percent - but has not grown. This likely explains why incomes have not shrunk in the county since the recession ended.

Finding a way to reverse the decline in household income has been the subject of political debate. The Seattle City Council or city voters are expected to decide on a $15 minimum wage this year. In Washington, D.C., U.S. Rep. Rick Larsen, D-Everett, who represents Bellingham, cosponsored a bill that would raise the federal minimum wage to $10.10 from $7.25 an hour. (In Washington state, the minimum wage is $9.32.)

"While the economy is recovering from the recession, not all are sharing in the benefits of economic growth. The vast majority of income increases in the last few years have gone to the top earners, while low- and middle-class workers' wages have stagnated," Larsen said in a statement on Tuesday, Jan. 7, the day the bill was introduced.

Larsen and other Democrats, including state Rep. Kristine Lytton, D-Anacortes, also say improving education will increase incomes. Lytton, formerly chairwoman of the Anacortes School Board, said she will work this legislative session to enact stricter high school graduation standards, with an emphasis on science, technology, engineering and math, or "STEM."

"We need to make sure kids are prepared in those fields," Lytton said in an interview. "We're fourth, fifth or sixth (among the 50 states) with the number of jobs in STEM fields but in the 40s with the number of kids coming out of college or high school prepared for those jobs."

Republicans call for a slate of economic reforms.

"There is no single solution to improve the economic climate in Washington state," said state Sen. Doug Ericksen, R-Ferndale.

"The state government should be focused on tax relief for families, regulatory relief for small and large businesses, prioritizing education in the budget and using tax dollars efficiently to build infrastructure projects that help the economy," Ericksen said in a Wednesday, Jan. 8, email to The Bellingham Herald.

The U.S. economy will be based even more on retail and service jobs by 2020, according to projections by the U.S. Bureau of Labor Statistics. In Washington, however, these industries are not expected to grow relative to other industries. The 2012 Labor Market and Economic Report from the state Employment Security Department projects the fastest job growth will be in the professions that require the most education. These also are the highest-paying jobs, suggesting the state's income trend will reverse.

The state report doesn't outline how Whatcom's economic development will play out this decade. That could depend on many factors, including how the Bellingham waterfront is redeveloped and whether the new County Council has any success with its promised push for economic development.

The new council, which is majority progressive, has said it will encourage growth in both manufacturing and recreation. Manufacturing, which includes refineries, generally pays well. Recreation jobs fall within the service sector.

In a Dec. 24 email outlining his priorities, incoming council member Rud Browne said he will be "focusing on Whatcom County's unique strengths, such as our excellent position as a gateway for Canadian businesses looking to expand their manufacturing into the U.S."

Browne also mentioned the tourism and recreation industry.

"In addition to providing jobs and tax revenues, it reinforces the values of protecting our wonderful natural environment," Browne wrote.

Reach Ralph Schwartz at 360-715-2289 or ralph.schwartz@bellinghamherald.com. Read his Politics blog at bellinghamherald.com/politics-blog or get updates on Twitter at @bhampolitics.

Bellingham Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service