Nation's Highest Minimum Wage Continues to Destroy Economy

Job growth in state eclipsing go-go ’90s; jobless rate falls

By Coral Garnick
Seattle Times business reporter



Washington state’s jobless rate continued to fall in July, dropping to 5.6 percent — its lowest since August 2008.

In all, 7,300 jobs were created in July, the state Employment Security Department reported Wednesday.

June’s job growth, which was already the highest monthly increase this year, was revised from 9,100 jobs created to 13,600. The unemployment rate for June held steady at the previouslyreported 5.8 percent.

June’s revision and July’s gain brought Washington’s average monthly job increase so far this year to 7,400, state labor economist Paul Turek said.

“This surpasses what we were adding on a monthly basis in 2005,” he said. “We would have to go back into the 1990s to find a period where we were adding more jobs.”

Locally, joblessness in the Seattle area, which includes Bellevue and Everett, also dropped to 4.7 percent last month, even as the national unemployment rate saw a slight increase to 6.2 percent.

A key question during the economic recovery has been how jobs being created compare to the jobs lost during the Great Recession.

As more jobs are being added across the country, lowering the unemployment rate, a new reportprepared for the U.S. Conference of Mayors says the new jobs on average pay much less than those lost during the recession.

Nationally, the average yearly wage of jobs added through the first half of this year was $47,171, and they were mostly in lower-wage categories such as administration and support services, retail, food and health care and social assistance, the report said.

By comparison, the higher-wage jobs lost in 2008-2009 averaged $61,637 and were in manufacturing, construction and the wholesale trades.

However, Washington does not follow that trend. The state had positive wage growth through the recession, and last year the average wage topped $52,000, a 2 percent increase from 2012, said Jeff Robinson, a manager for labor market analysis with the state Employment Security Department.

In Washington, the job sector hit the hardest during the recession was construction, losing 48,500 jobs, Robinson said. It is also the sector struggling the most in the recovery, beginning June 2009.

But with companies like Microsoft, Amazon and Boeing around Seattle, the new jobs, replacing those lost, are not strictly low-wage jobs in hospitality and administrative support.

The retail sector, which includes Amazon, has grown almost 12 percent since the start of the recovery.

Professional and business services has seen about 14 percent growth through the economic recovery as well. Included in that sector is “computer systems and design services,” which encompasses a lot of Seattle’s tech companies and grew 39 percent right through the recession, Robinson said.

“We are seeing a lot more growth in jobs across the wage spectrum,” Turek said. “We saw the low wage job growth, but we are also seeing the high wage. What was missing was the middle wage industries — and over the last year, we’ve seen middle wage start to occur more.”

In July, the largest job increases statewide were seen in the professional and business services sector, with 4,500 new jobs, followed by leisure and hospitality with 4,000, construction with 2,300 and both retail and education and health services up 1,100.

“As employment has grown and people have more money to spend, people are traveling and eating away from home,” Turek said, explaining the large jump in jobs in the leisure and hospitality sector.

On the downside, government shrank by 2,100 positions since June. The transportation, warehousing and utilities industry also lost 1,700.

The state’s labor force, which includes unemployed job seekers, decreased again in July, this month by 4,200.

While a growing labor force is an indicator of a strong post-recession economy, but Turek said it is more important to look at the data yearly, than monthly.

“On a monthly basis there is going to be some volatility,” he said.

Nearly 93,000 jobs were added in the state over the one-year period ending in July, according to the state’s monthly report. Year over year, Washington saw growth in every industry except manufacturing, which experienced a loss of 300 jobs.

Just under 196,000 people were looking for work in the Washington in July, including more than 64,000 who claimed unemployment benefits.

Coral Garnick: 206-464-2422 or cgarnick@seattletimes.com. On Twitter @coralgarnick

http://seattletimes.com/html/businesstechnology/2024301101_unemploymentjulyxml.html

It looks like Seattle businesses were crippled by paid sickleave and have already starting preparing for our $15 minimum wage.

Ah, that's the key to job growth...get Microsoft, Boeing, and Amazon to headquarter in YOUR state.

Washington really is a very efficient state. Unemployment is down, jobs are being created...and they did it all while simultaneously shrinking the labor force by almost 60,000 since April 2010. Surely, their population must've decreased? No? Well, just don't count them, then. Bravo!

Boeing has been in Chicago area for ... almost a decade.

Boeing I'll give you. It's a legacy of our timber industry. However you raise an interesting question when you bring up Microsoft and Amazon. Why, after five years of being located in low tax low wage New Mexico (Albuquerque) did Microsoft move to medium tax, high wage Washington (Bellevue originally, then Redmond)? Why did Bezos who grew up in the Sunbelt (New Mexico [Albuquerque], Texas [Houston] and Florida [Miami]) decide to move across the country to found Amazon in Seattle? When Deutsche Telekom bought and merged Voicestream and Powertel to create T-Mobile USA, why did they choose Bellevue WA (Voicestream's HQ) over Westpoint GA (Powertel's HQ) to base the company? Why have Google, Facebook, Twitter, Ebay and other Silicon Valley companies set up satellite campuses here instead of say Lincoln Nebraska or Portland Maine?

All these companies had choices of where to either move their headquarters to, or to set up their largest satellite campuses. They chose this area, instead of low tax, low wage areas. Why?

Ah, so we're back to the bizarre argument that people who aren't seeking work should be counted as unemployed, because, um ... um ... well, because it's inconvenient to admit that the unemployment numbers are low and we have to find a way to make them look higher.

Not to mention, such efforts require that we use two different counting methods for pre and post. Is it bad stats or just politics?

As much as it surprises me to type it, Jenee is right. Boeing moved their headquarters some time ago. As for their manufacturing? Well we all know they've been making efforts to open a factory in the South because labor costs in the Northwest are too high.

But at least there's Microsoft.

What's that? Microsoft is laying off 18,000 people, 14% of its workforce? And cutting work for thousands more contractors? At least that $15 an hour minimum wage will take some of the sting out of working at McDonald's.

Well, at least until they get the automated cashiers and burger making robots installed.

Almost all of which are in Europe, Microsoft is cleaning up newly acquired Nokia. What is in the Seattle area is mostly management (new CEO wants to cut bureaucracy, make company more nimble) and testers (thinks testing should be done during development to make make product delivery faster).

http://www.bellevuereporter.com/news/267692111.html?mobile=true


Microsoft will also cut 1,350 positions in the Puget Sound region, representing a 3-percent reduction of its 43,000 local employees. Schutzler said Nadella is making a smart move, and following industry trends by consolidating its workforce to focus on growth and cutting out redundancy.

One of those shifts in methodology over the past decade has been consolidating software development and software testing, he said.

"It's pretty clear that the message is software developers will be doing their own testing," Schutzler said. "That would mean, if you're a tester, you're most likely to be on the cut list."

Nadella also stated in his Thursday employee memo Microsoft's plans include reducing "layers of management, both top down and sideways," which includes increasing "the span of control" for those managers who will remain following the tech company's restructuring.

"This is a significant move just to significantly grow the company," Schutzler said. "That's awesome for us, as a region."

Microsoft estimates it will spend up to $1.6 billion in severance packages and other pre-tax charges, as a result of the restructuring, which Schutzler said will give Puget Sound employees time to find new employment.

He added he's already been contacted by an ex-Microsoft executive now working for Amazon who is interested in hiring on laid-off Microsoft engineers. The WTIA CEO said there about 5,000 computer science positions currently unfilled in the state.

"If you're a computer science engineer, you're not having trouble finding jobs here," Schutzler said. "… The net impact to the region ultimately is going to be positive economic development."

Many mid-level and senior managers for Microsoft have historically gone on to run their own startup companies, and Schutzler said he expects several to be laid off this year will use their severances to invest in new ventures.

Schutzler said it's important to remember Microsoft's restructuring was prompted by Microsoft's plans for future growth, and cutting out redundant positions doesn't mean the company will not be adding positions necessary as part of its strategic goals.

"I think Microsoft will be hiring a lot more people than they've laid off over the next couple of years," he said. "… It's a courageous move by Satya Nadella, if you think about it. He's showing he's got his eye on the ball and he's a courageous leader. It's awesome."

How dare you bring facts to a discussion! So inconvenient!

The sad part is not only are their attempted deflections baseless, but are obvious attempts to avoid having to deal with the point of the thread.

Market Fundies: Doing anything to improve the lives of the poor will DESTROY JOBS.

Reality: Actually, Washington State has had the highest wages in the nation for 15 years and is one of the best performing economies in the nation.

Market Fundies: THINGS AREN'T PERFECT!

To be fair, I've seen the opposite used by the opposite side of the spectrum many times.

So, Microsoft is adding jobs in and around Seattle?

Agreed -- lots of people switch between U3 and U6 depending on what point they wish to make. As long as somebody is consistent, either measurement is fine for demonstrating trends. In the case of Washington (and most of the rest of the country), the trend is good unless you use U3 for the before and U6 for the after.

BLAH BLAH BLAH. The recession ended in 2009--5 years ago. Is Microsoft adding jobs in the Seattle area or firing people?

Some people seem oblivious to the concept of net job creation. Fortunately, all the info is in the OP article.

I see. So Microsoft is hiring people in the Seattle area? Because the article says they are laying people off.

If Microsoft isn't hiring people in the Seattle area, or even if they're laying people off in the Seattle area, does that mean that there isn't a net gain in jobs in Washington State?

I see you are even more dumb than I thought. Where did anybody say that Microsoft was hiring? If you are stumped by that and still want to participate, take a stab at Shoes' question.

You gotta go slow with Volpy, can't process much these days, the ODS appears to have caused permanent damage.

The crazy thing is, people literally can't move here fast enough. According to Census estimates Seattle's population grew 2.8% IN ONE YEAR. Adding 18,000 residents from July 1 2012 to July 1, 2013 (most recent data). That's what is so amazing about our employment rate continuing to fall. We've almost reached structural full employment and we have massive amounts of people immigrating here from other states at the same time, we're just adding jobs faster than they get here.

Ah. So Microsoft is laying people off. But that doesn't matter, because there are still more than enough jobs to go around.

"The water is actually getting more comfortable," said the frog as the temperature went up a couple more degrees.

You do understand that Microsoft isn't the only company out here right?

Is it the word 'net' that is tripping you up? Here, I've actually taken classes on how to write for people like you (the state calls it writing in 'Plain Talk'): More jobs are being added than lost.

Do you think it's worth filling in some numbers, or would that take it out of the realm of plain talk?

It'd take it out of the realm of plain talk and into the realm of math in the Red Room

Hippies are cheaper and more plentiful than coal for electric power generation? I still bet coal burns cleaner.

Microsoft is laying off 18,000 people because it recently acquired Nokia and there's a bunch of redundant positions. Of the 18,000 positions being cut, 12,000 are coming from Nokia. Google did the same thing when they bought Motorola, and Doubleclick, etc. When you acquire someone and they have a lot of people who are already doing the same stuff you are, you'd be stupid to keep them around.

Additionally, Microsoft has a new CEO for the first time since Bill Gates stepped down in 2000, and Satya Nadella is trying to shake things up and leave his mark on the company. The cuts probably should have come sooner, but the company had been run by a gorilla in a suit for 14 years.

Also, like Anc said, only 1,350 of the jobs are in the Seattle area, out of 3,200,000 jobs. Seattle's gonna crumble any day now with that 0.04% loss of jobs.

0.04% job loss? That's, like, a depression!
Here come the bread lines!

Mmm... bread.

To bring in people for new, relevant positions. Isn't this what capitalism is supposed to be when the government is hands off?

All seems a bit irrelevant anyway since I doubt Microsoft is employing many people at minimum wage.