Employment Up in Some State Counties, But Labor Conditions Still Weak

Although state unemployment rose tc 9.3 percent in October from 9.1% in September, many counties including Whitman, Wennatchee, Walla Walla, Snohomish and Spokane actually experienced increases in employment during the period, accourding to the state’s Department of Employment Security. Spokane employers added 3,000 workers, boosting employment by 3.2 percent. Most of the new jobs, however came in state and local government. State government added more than 10,000 jobs statewide. Most of that probably came from increased employment at state universities, which began classes at the end of September.

Job growth in the state’s private sector remains weak. Although many employees are seeing improvements in their businesses, says state economist Arun Raha, “they won’t start adding more workers until they are sure of the recovery.” Raha, who declared earlier this fall that the state had emerged from the recession, says another reason employment remains weak is that employers tend to first promote parttime workers to fulltime status before adding new workers. Although that adds to total income, it doesn’t show up in the employment numbers since parttimers are included among the employed.

Raha expects to see unemployment numbers continue to rise for the six months even as the economy continues to recover. One reason is the way in which the unemployed are counted. When people get discouraged and stop looking for jobs, they are no longer considered a part of the work force and are therefore dropped from the unemployment numbers, effectively underestimating the true number of unemployed. When the economy begins to improve again, more workers start looking for jobs. That boosts the size of the labor force and raises unemployment.

Employment is a key ingredient of economic health. Not only because employed workers have more money to spent, but also because higher employment leaders to great confidence among all workers. Greater confidence leads to high consumption, a key ingredient in economic growth. “For economic growth to be self-sustaining, we need consumer spending to rise,” says Raha.

One positive Raha sees is the “unprecedented synchronized global recovery.” Raha says that “for a trade dependant state like ours, when trade partners growth that is good for us.” For that reason, Raha says that, as the U.S. comes out of the recovery, Washington employment will grow faster than the rest of the country.