The economic recovery that doesn’t feel like a recovery continues.
At the Tacoma-Pierce County Chamber’s annual Horizons Economic Forecast on Thursday, a national investment strategist and two local economists laid it out: Consumer spending may be up a bit because of low gas prices, but wages are stagnant. The unemployment rate may be going down, but that’s related as much to people dropping out of the labor force as to an addition of jobs. Jobs have been created, but they’re low-wage and part-time.
So the forecast for 2015 in Pierce County is what it has been the past few years: Growth, but lackluster growth.
Pierce County has replaced blue-collar jobs with low-wage service jobs, said Martin Wurm, an economics professor at Pacific Lutheran University who put together the forecast with his colleague, Neal Johnson. More concerning is the number of people who have simply stopped looking for work.
“This is unusual,” Wurm told the crowd at the Greater Tacoma Convention & Trade Center. And even with the acknowledgment that job creation hasn’t been great, he also said he was concerned about who was choosing to drop out of the labor force: Young men, ages 16-24.
“The risk is that certain individuals could be simply sidelined in this county,” he said. “The lag in educational attainment is holding us back.”
Several speakers before Wurm mentioned the looming worry of federal budget cuts that have the potential of cutting 11,000 soldiers and army employees from Joint Base Lewis McChord, Pierce County’s largest employer.
In an interview after the presentation, Wurm said that is a concern, but the county’s bigger economic problem is structural.
Pierce County’s people need to be more educated, he said. In the meantime, Pierce County needs more businesses with good jobs for people now and for those who should be better educated in the future, so they don’t just move.
“If we can’t pull up this part of the labor force, and King County keeps growing like it is, eventually we’ll just have gentrification,” Wurm said, similar to what is happening in Oakland, Calif.
Pierce County is a great place to live, he said. But Western Washington’s traffic disaster means young people who want the amenities of a big city, like Seattle, have little choice but to live there despite it being increasingly unaffordable. If they live in Pierce County, where the cost of living is cheaper, they face a 90-minute one-way commute.
“Forty miles isn’t that far, but this region has done a terrible job with transit,” he said.
Presenting the morning’s keynote address, Bruce McCain, chief investment strategist at Cleveland-based KeyBank, told the capacity audience, “This is still a very difficult time.”
This recovery, compared to most others, “is far slower than what it has been in the past,” he said. “It hasn’t been normal.”
For example, he said, there remains “a huge problem employing everyone who wants to work.”
Touching recent news, McCain was ambivalent on the slide in oil prices. It is, he said, like going on a diet. Lose five pounds, he said, and that’s good. Lose 50 pounds, and “people worry what’s really going on.”
Meanwhile, consumer spending is up — but not up where it could make a seriously positive difference. The money, McCain said, is going toward necessities including college expenses and health care.
“I think we’re in for a period of generally sluggish growth,” he said.
He and Wurm urged against pessimism, pointing out that the trend lines are still going in the right direction.
There are “no strong signs” of a downturn, McCain said, and “leading indicators do not indicate a recession.”
“In conclusion,” Wurm said, “it’s not all bad.”