Chelan-Douglas Trends e-Newsletter

LABOR FORCE PARTICIPATION RATE HIGH -

While the second headquarters of Amazon is projected to create as many as 50,000 high-paying jobs to a large metro area, a parallel question for the local economy would be: If the two counties were to add 1,000 jobs, where would the workforce come from? With unemployment low, could potential workers who are currently not in the labor force be persuaded to apply?

According to the U.S. Department of Labor, Bureau of Labor Statistics (BLS), "The labor force is the sum of employed and unemployed persons. The labor force participation rate is the labor force as a percent of the civilian noninstitutional population."

More precisely, the civilian labor force counts people in America ages 16 and over who are eligible to work legally in the U.S. and are either employed, or unemployed but actively looking for a job. The non-institutional population, who the U.S. Census considers "primarily ineligible, unable, or unlikely to participate in the labor force," excludes members of the Armed Forces on active duty; people incarcerated in prisons, jails, and detention facilities; people living in mental institutions, and homes for the indigent or aged. The pool of potential workers starts at age 16 and has no upper age, according to convention.

Examining the graph for the Total Civilian Labor Force & Labor Force Participation Rate of Population Ages 16+ indicator on the Trends website, we see that 2017 was the fourth consecutive year with an annual increase of the labor force from the previous year and was the highest civilian labor force total since 2009. 2017 was also the first year to exceed the Great Recession civilian labor force number, implying that it has taken eight years to rebound fully.

Throughout the series, the labor force participation rate was higher in the combined counties than in the state and stands in contrast to the decreasing national civilian labor force rate. There are likely several reasons for the high rate in the two counties. One of them is undoubtedly the presence of the Latino workforce, adding numbers while the baby boomers have been subtracting them from the economy.

While having similar civilian labor force rates from 2000-2009, the individual counties of Chelan and Douglas started to diverge a little from 2010-2017 with Chelan County coming in at a few percentage points above Douglas County.

Heidi Meyers, Vice President / Team Leader, Corporate Banking with Washington Trust Bank in East Wenatchee and Chair of the North Central Workforce Development Council said, "There is some interconnectedness our higher than state average participation rate, but much lower than state average wages."

Using data from the Trends site, Myers said "There is work here in our counties, but the earnings are less. In an agriculture / construction / heath care based economy, people will take the jobs available, and patch together incomes to feed their families. They are participating in the labor force but level of compensation is lacking."

When asked to consider how the Great Recession might have affected the decreases in the civilian labor force evident in the decreases beginning in 2010, Meyers said, "While the recession may have ended nationally and even statewide in 2009, the effects were only beginning to be felt here in north central Washington, particularly in the housing bubble burst and the drop off in construction work."

Myers uses data on the Trends site to show in other indicators how the effects of the Great Recession hit in North Central Washington a little later than in most places, also true for when recovery started taking hold. Looking at the Assessed Value of Taxable Total Property & Annual Growth Rate, as well as the Total Number of Residential Building Permits & Number per 1,000 Residents, Meyers points out in each of these indicators, there was "no real improvement until 2013" which was generally later than the benchmarks.

While having a high civilian labor force participation rate is an excellent precursor for the future local economy, developing and expanding the skills of the current workforce will help prepare for future demands.

"Our Workforce council is looking deeply into incumbent worker training programs, which will seek to upskill people already employed, but perhaps under skilled and consequently underpaid. This will be a partnership program with employers to identify and fund training opportunities that will serve employers needs for skilled workers, and also increase wages for workers", said Meyers.

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