Scott Bailey is ESD’s regional labor economist serving Clark, Cowlitz, Klickitat, Skamania and Wahkiakum counties.
ESD hosted about 150 people at the 2014 Olympia Economic Symposium in October. The focus was on Washington’s minimum wage and the state’s economy. Cynthia Forland, Director of ESD’s Labor Market & Performance Analysis unit opened with an overview of Washington’s economy.
The good news: a labor-market recovery is well under way in the state. Employment is currently 70,000 jobs above the pre-recession peak back in late 2007. Unemployment and underemployment have fallen steadily. Unemployment claims are at low levels, and the number of job seekers using WorkSource services has fallen as the economy has recovered.
The downside: the recovery has been uneven across the state and among different industries. For example, 13 counties have lost jobs in the past year. Some workers have not returned to the labor-market, as reflected in the still low employment-to-population ratio.
- The median hourly wage was $22 per hour in 2013. The median has grown little since 2002.
- From 2007 to 2013, the state gained higher-wage jobs in industries like aerospace and health care; lost middle-wage jobs in construction and non-aerospace manufacturing; and lost lower-wage jobs in construction and retail trade.
- The gap between high-wage jobs and low-wage jobs has continued to grow.
- Between 2009 and 2013, a third of full-time workers suffered a drop in hourly wages.
- There was very little wage mobility for lower-wage full-time workers. Of those earning below $12 per hour in 2008, almost half (43 percent) were still below $12 in 2013.
Minimum wage in Washington State
Washington continues to have the highest minimum wage among states. The current $9.32 minimum will go up to $9.47 in 2015, due to the automatic adjustment to keep up with inflation. Minimum wage jobs are concentrated in three industries: food services, especially limited service (a.k.a. fast food) restaurants, retail trade and agriculture.
The percentage of all jobs that pay at or near the minimum wage has risen over the past decade to 2.9 percent of all jobs. The percentage varies across the state, from 0.8 percent in the San Juan Islands to 7.3 percent in Okanogan County. Outside of the Seattle metro area (1.5 percent), the average for urban areas is only slightly below that for rural counties. Outside of a narrow band of jobs just above the minimum wage, there appears to have been very little effect on general wage levels by raising the minimum wage.
Low-wage workers in Seattle
Mark Long, a professor at the University of Washington, followed with a deeper look at low-wage workers in the Seattle area:
- There were about 100,000 low-wage (less than $15 per hour) workers living in Seattle.
- While some were teenagers and some were high school dropouts, most were age 25 or older, and more than 40 percent were high school graduates with some college credits.
- Raising the minimum wage to $15 per hour in Seattle would have a major effect on only a small number of employers.
- It is unclear what the effects will be on raising the minimum wage in Seattle in the coming years. For example, businesses may choose to increase productivity through more automation or by lowering turnover rates. Seattle might become a more attractive place to live, which would drive up housing costs, lessening the benefits for low-income families with low-wage workers.
Open-source data: learning from the numbers
While it costs government money to collect this data, remove private information from it and make it publicly available, the payoff can be large. Ryan Leisinger, an IT Deputy Director at ESD, talked about the growing movement to make this type of data available electronically.
“The private sector can use this type of open-source data to become more efficient and effective,” said Leisinger. Faster economic growth, higher tax revenues, less tax avoidance and reduced corruption could result. Washington-based firms such as Zillow, Tableau Software, Socrata, Russell Investments, INRIX and Redfin are among the leaders using data to enhance their businesses and provide better services to their customers.