During the COVID-19 pandemic, some Whatcom industries are faring better than others
Whatcom County’s overall job market began to recover in August, but while some industries are improving during the pandemic, many are definitely not.
Whatcom’s unemployment rate in August was 9.4%, according to data from Washington’s Employment Security Department. That’s a significant decrease compared to July, when the rate was at 11.6%. Whatcom’s unemployment peak during this COVID-19 pandemic was in April, when the rate was 17.7%.
Economists have been speculating about how industries will recover during the pandemic. As discussed in a recent Western Insights economic forecast Zoom presentation, instead of the “V” shape recovery many were hoping for (sharp downturn, followed by a sharp rebound), more are thinking the shape may look more like a “K,” where there is a sharp downturn, followed with some industries recovering and others starting to recover, but then deteriorating again.
The end result is that there are two very different narratives when it comes to the economy, said Hart Hodges, director of Western Washington University’s Center for Economic and Business Research during the Zoom presentation.
“When we look forward, we have to be mindful that we aren’t just saying ‘the economy’ because people are experiencing the economy in very different ways,” Hodges said.
In Whatcom County, the industries that have seen significant job gains in the past year are transportation, trade and specifically retail trade. Transportation makes sense, given the increase of deliveries as a result of the pandemic restrictions. Retail trade has a bit of a split, however.
“Retail is a great example of how diverse a sector can be,” said Anneliese Vance-Sherman, a regional labor economist for the state, in an email. “Grocery stores and retailers such as hardware and pharmacies (i.e. essential businesses) have done quite well, as has online retail. However, businesses such as small clothing retailers have not necessarily fared as well.”
Hodges noted that it is not just retailers experiencing differences based on the type of store, but geography.
“One type of retail may have done OK in one neighborhood, but not in another. It depends on the income level,” Hodges said in an email.
For example, Hodges said at one point during the pandemic, spending recovered quickly in lower-income ZIP codes, presumably because the stimulus money offset the loss of income. It did not recover as quickly in higher-income ZIP codes.
Whatcom industries that have experienced significant job losses year-over-year include leisure/hospitality. That industry employed about 8,100 people last month, down from 11,000 in August 2019. Other industries seeing declines include government (down 1,200 jobs year-over-year) construction (down 700 jobs) professional services (down 400) and manufacturing (down 300).
Impact of stimulus money
The stimulus money during the spring was substantial, according to a new federal report. In Washington state, personal income rose 35.1% during the second quarter, according to the Bureau of Economic Analysis. Typical personal income increases for a quarter are in the 1%-4% range for most states. The boost came in the form of the $1,200 stimulus checks and the extra $600 a week in unemployment benefits.
Given that Congress appears deadlocked on whether to provide more stimulus, that could mean less spending in Whatcom County and across the U.S. in the future.
The debate about further stimulus comes at a time when Whatcom County is still shedding jobs despite a dropping unemployment rate. According to the state Employment Security Department, 524 Whatcom County residents filed for new unemployment insurance claims for the week of Sept. 13-19. While that’s down compared to the spring numbers, it is high compared to the months leading up to the COVID-19 pandemic.
This story was originally published September 25, 2020 at 5:00 AM.
