In getting our arms around the wan May jobs numbers for Washington state — a net loss of 700 — here’s something to remember. Washington has a relatively high unemployment rate as measured by the U.S. Labor Department’s U-6, the broadest and, to my mind, best gauge of overall labor-market health. It tracks not only the total “officially” unemployed, but also part-timers who want full-time work, discouraged workers and people who are available for work but haven’t actively searched in the four weeks before the survey. For the first quarter, Washington’s rate was 18.4 percent, vs. a national 16.5 percent. Only seven states had a worse showing, including Oregon at 19.6 percent.
Another thing: Net job creation has been poor since the recession officially ended. For every January (up 11,000), there have been far more months such as March (up 1,100) or February (up 800). The hope that April’s gain of 5,800 jobs might signal a trend now seems unlikely. Hiring is just not strong enough to make up for the losses during the Great Recession and the natural growth of the labor force.
Washington is hardly the only state in this condition. Post-recession growth hasn’t been strong enough to power significant hiring, among many reasons I’ve cited for the unemployment crisis. The economy slowed in the first quarter and economists expect more of the same this quarter.
But are there reasons behind the state’s sick labor market that are peculiar to Washington? After all, many segments of the economy have come back very strongly (Boeing, Amazon, the port, software, etc.) and the state didn’t suffer from the overbuilding that continues to hurt the Sun Belt.
It may be that we epitomize the great divide in the American economy. People with high technological and creative skills in market demand are doing well. This is particularly true of those who didn’t lose their jobs to begin with. Others, with lesser skills or whose specialties are no longer in demand, face tremendous competition in a slow-growth economy. Both tracks are on display in this state.
Today’s Econ Haiku:
What on earth will we see next?
Ethics on Wall Street?