My friend Becky’s house hasn’t sold. She put her house on the market months ago, priced to sell, and is still waiting for the first offer. It’s a lovely home in a pleasant neighborhood, conveniently located to regional job centers. And still it sits empty.
What a difference a year makes.
Last September, there were ominous signs the housing bubble had burst in other parts of the country, but homes were still selling across Washington. And everyone was keeping their fingers crossed, hoping that national problems in the housing market would somehow be contained and not take the rest of the economy down with it.
Note to presidential candidates — crossing fingers turns out to be an ineffective economic strategy.
Over the first half of 2008, the U.S. economy lost 400,000 jobs. Nearly 9 million Americans are out of work, 1.6 million more than a year ago. In construction alone, there are more than half a million fewer jobs than in 2006.
The good news for many of us in Washington is that we are doing better than most of the country. Overall, jobs here are still growing, although at a much slower rate than during the past three years. The Seattle-Everett job market has been particularly strong. Vancouver, Bellingham, Olympia and the Tri-Cities are also still adding jobs, but Tacoma, Spokane, Yakima and most smaller cities have seen their job markets sputter.
So far this national slowdown is in many ways the opposite of what we saw in 2001. That time around, the recession hit here first. The collapse of the dot-com bubble and layoffs at Boeing rippled throughout the regional economy well before the rest of the country began shedding jobs. Once the recession really got going, Washington had the highest unemployment rate in the nation.
Other parts of the state rebounded by 2002, but the Seattle-Everett area just kept going downhill. Job growth did not resume here until 2005.
Then, renewed hiring in aerospace manufacturing and high tech supported expansion in almost every sector. And through 2007, median household incomes in Washington rose even after accounting for inflation.
The problem for most working families both here and across the country is that the economic expansion was too short and too weak to make up for the hole of the last recession. If you’re feeling economically insecure, there are millions of others just like you.
A new analysis of the U.S. economy over the past decade provides a searing indictment of the economic policies pursued by the current administration in the other Washington. The State of Working America 2008, just published by the Economic Policy Institute, concludes that while the American economy did very well from 2001 through 2007, the American people did not. American workers were more productive than ever, but the fruits of their labors went largely to corporate profits and the salaries of an elite few.
In every previous cycle of economic expansion since World War II, the typical American family ended up better off than they had been at the previous peak. But not this time.
Even here in Washington, families in the middle have not regained the buying power they had in the late 1990s. And Washington employers were less likely to provide health insurance, paid leave and retirement plans in 2007 than in 2002.
Tax cuts and deregulation have been the economic policies of choice of the current president. The results were spectacularly disastrous in the mortgage industry and decidedly mediocre in stimulating job growth.
If the nation ends up mired in recession, our state will probably join it. A prolonged strike at Boeing, if that happens, would also be hard on the regional economy in the short term — although if a strike resulted in more of Boeing’s profits being distributed among workers here, we would be better off in the longer run.
The federal government is in the best position to reboot the economy. For instance, it could make money available to retrofit schools, libraries and other public buildings for energy efficiency, creating immediate jobs and cutting energy consumption. But we might have to wait for a new administration in the other Washington for that.
Meanwhile, I hope someone buys Becky’s house.
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The State of Working Washington 2018: Part 3
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