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POSTED: Sunday, Nov. 08, 2009

Economists: Expect little job growth in Whatcom County in 2010

While there are signs the economy is getting back on its feet, the prospect of recovery in the job market is still way off in the horizon.

In September, Whatcom County's unemployment rate stood at 7.9 percent, which is significantly lower than the state's 9.2 percent. Whatcom's rate is also much lower than the U.S., which was 10.2 percent in October. It's the first time nation has seen double-digit unemployment since 1983.

Even though this area has a lower rate than the nation, nearly 8,500 local residents were actively seeking employment in September, and many more - perhaps thousands more - have either given up looking for work or are underemployed, cobbling together an income with a part-time job.

Whatcom and Washington's unemployment rates for October will be released later this month.

In the coming months, those with a job may get a sense that the economy is returning to normal, while those looking for work will find 2010 a very difficult year, because economists are expecting very little employment growth.

"We may have turned the (economy) corner, but this is going to be a very wide corner and job growth always lags behind," said Joe Giannamore, a regional labor economist for the Washington State Employment Security Department. He predicts local unemployment to still be around 8 percent by the end of 2010.

The overall job market may look stagnant, but Giannamore expects to see pockets of growth locally. With an aging population, demand for health care workers should rise. Education might be another growth industry, because of increased enrollment as people continue to retrain and get new skills in a competitive job environment.

In other parts of the private sector, it may come down to how well companies adjust to changing circumstances. For example, if China and some of the other Pacific Rim countries continue to shrug off the global recession and increase spending on products, companies in Whatcom County and the rest of Washington could benefit through exporting.

The technology sector could also be a place for job growth, said Paul Grey, a local business consultant and a board member of the Technology Alliance Group. He believes much of the job growth locally will be small- and medium-size firms that have established technology, while firms with speculative technology may suffer until the economy has recovered.

"If a company can successfully come forward with a technology solution, it will have gone through a tougher screening process during this downturn than when the economy is going well," Grey said. "This is a difficult time to get a foot in the door with something new."

When there are job openings in the technology industry, the challenge for the company is finding someone who has a specific set of skills.

"In order to stay in Whatcom County and work here, I would suggest talking to five local technology companies to get a sense of what platforms they are using and learn those skills," Grey said. "There are jobs in this industry, but more often companies have to look outside the area to find someone."

WHY JOB GROWTH IS ILLUSIVE RIGHT NOW

When the economy begins slowing down, a company typically does many cost-cutting measures before actually laying off workers. It works the same way when the economy starts to recover, Giannamore said. A company will make sure its growth is real before it goes through the process of adding employees. It will also take other measures, such as increasing hours for part-time workers.

"Job growth is dependent on output growth. Right now there seems to be an increase in output, but we're only at a point where we are replacing inventory," Giannamore said. "Ultimately it will take consumer spending and business investment, and neither is showing much strength."

Hart Hodges agreed, adding that many local companies are seeing improved sales, but not to the point where it's time to add people.

"The job growth will be slow and piecemeal for a while," said Hodges, director at Western Washington University's Center for Economic and Business Research. "We're in the early stage of recovery and there is no obvious economic driver that will lead us out."

A complete job recovery doesn't take place until long after the rest of the economy is back on track. In the 2001 recession, for example, it took about four years to get back to pre-recession job levels. This recession is expected to take longer, because job cuts spanned across nearly every industry, Hodges said. Some national economists are putting job recovery at either 2014 or 2016.

The sluggish job market was evident last week at Western Washington's Career Fair. There were 48 companies participating at the event, down from 75 employers last year. Effie Eisses of the Career Services Center said the two most common factors she heard were budget cuts forced companies to not make trips to this year's career fair, and that many of the companies felt they already had plenty of applicants to choose from.

Some of the companies that were at the fair saw it differently.

"Right now, we're seeing things pick up, so this is an opportunity," said Jodie Beatty of Waddle & Reed, a financial firm that is looking to hire financial advisors. One sign she's noticed is more companies beginning to increase employee matches to the 401(k) programs again. "I get a sense more businesses are hopeful about 2010."