Dollars spent in Pierce County have less purchasing power, jobs report shows
A recent report on Pierce County’s workforce and economy identified that inflation disproportionately impacts residents as the relative value of a dollar in Pierce County is much lower than the state and national averages.
As Pierce County’s demographics change and its industries add more jobs, the study also predicts that AI and automation could replace a significant amount of labor in the coming years.
On April 14, WorkForce Central released its 2025 State of the Workforce Report which breaks down occupational and demographic data and changes in Pierce County across recent years.
Changing Demographics
Since 2010, the population in Pierce County has recorded a steady growth, increasing by more than 130,000 and totaling more than 928,000. In recent years, that growth has plateaued.
While data cited in the report shows that birth rates have remained stable over the past decade or so, the number of migrants coming from other parts of the country has decreased significantly since the pandemic, with data showing a net loss of domestic migrants beginning in 2020.
“Because of the decline in domestic migration, we’re at an interesting point where international migration plays a much greater role in our region’s growth than in years past,” the report’s authors stated.
In 2023, Pierce County had 1,846 new immigrants and refugees migrate to the region, representing 83% of its population increase that year. In 2022, that number was 2,316, and without immigrants and refugees, Pierce would have seen a population decline that year, according to the report.
“We anticipate this trend will continue, but the capacity in the local support networks that help new arrivals resettle is less certain,” the report wrote. “This decline in domestic migration, if persistent, may strain long-term economic growth, but it also highlights the value of our international residents and their role in our region’s future growth.”
According to WorkForce Central, Pierce County is becoming a more diverse community, as the region has seen a 191% growth among residents of more than one race. Hispanic and Latinx residents have contributed to over a third of the total population growth, contributing to a 66% increase from their 2010 population.
The report also identified indications that Pierce County’s population is getting older, with about 40% of that total growth concentrated among residents 65 years and older, up by 61% from their 2010 population. That comes as there is less growth among residents under 25, whose population has increased by 5%.
This shift has driven Pierce County’s median age up 1.6 years to 37.5, according to the report.
While the report found more than 300,000 people who both live and work inside Pierce County, it found that one out of every four Pierce County residents commutes outside of the county for work.
“Pierce County continues to experience a high volume of outbound commuters, with 113K residents traveling to neighboring counties for work,” the authors wrote. “However, this is still about 5K fewer than pre-pandemic levels — a drop most likely attributable to employer shifts to allow more work from home. With recent back-to-office announcements from large employers like Amazon, we anticipate this will likely increase.”
It also found one out of every seven Pierce County workers commutes from outside of the county.
Wages and Inflation
WorkForce Central found the average annual wages in Pierce County have increased significantly in recent years, but the rate of growth has not kept pace with the average wage in Washington state. Over the same time, inflation has driven the region’s cost of living up faster than other areas.
As of December 2024, total inflation for the area was down to 2.7%, while the price of goods and services is, on average, about 3% higher than it was one year ago.
WorkForce Central found that housing affordability was a major contributor to that inflation.
“If we were to remove shelter from our total measure, our inflation rate would drop to just 1.5%,” the report wrote. “This is a critical issue for our area as affordability impacts so much of our economy, including the value of dollars earned and spent regionally.”
To fully meet the housing needs of current and future residents, the county’s Housing Action Strategy of 2022 found the region needs to produce, on average, over 2,300 units per year of housing affordable at or below 50% of area median income through the year 2044, and over half of these units are needed for households at 30% of AMI or below.
According to WorkForce Central, because of the higher regional cost of living, which is 26% higher than the national average, the relative value of a dollar in Pierce County is much lower than the national average. That means that the average purchasing power for Pierce County residents is about $20,000 less than the statewide average and $18,000 less than the national average.
“Pierce County residents are earning less and spending more on basic expenses than the average Washingtonian,” the report stated.
Current problems and future trends
According to the authors, the stagnation in Pierce County’s population growth and high cost of living might be the region’s greatest long-term economic risk.
“From a macroeconomic lens, our high commuting population represents a labor surplus, but without sustained population growth, regional establishments will have to pay more to compete with employers in King & Thurston County for these workers,” the report wrote. “From a labor standpoint, increased wages to recapture some of that lost labor would mean less indirect commuting costs and relatively higher purchasing power for workers.”
WorkForce Central said this period of flat population growth represents an opportunity for housing development to close that gap and reduce the relative cost of housing, the primary driver of regional inflation. According to the authors, population growth since the Great Recession has outpaced growth in the region’s housing inventory.
The unemployment rate is near a historical low, 5.4% as of December 2024, representing about 23,600 workers. At 418,000 workers, Pierce County’s total employment is still well below pre-pandemic highs.
According to the report, nearly one out of every five workers in Pierce County is employed in the health care and social-assistance industry, representing 64,639 workers. Those industries, along with the next four largest — retail (38,818 workers), education services (31,306 workers), hospitality and food services (30,144 workers) and construction (26,893 workers) — represent more than half of all workers in the region.
WorkForce Central’s forecasts predict over 11,000 jobs added to Pierce County’s regional workforce over the next five years. Elementary and secondary education is predicted to account for more than 10,000 newly contracted jobs in the next five years, as that industry is recognized to have a high share of older workers who are expected to drive a large wave of retirements.
While the authors of the report acknowledged that “nearly all predictions about the timeline and the extent of AI adoption are vague,” their models predicted that generative AI developments have made it possible that by 2030, nearly one-third of all the labor hours in Pierce County could be automated.
Another potential problem identified by the report is that out of every five residents between the ages of 16 and 64 are not in employment, education or training. According to the report, of the 120,000 people identified in this category, 63% have an income-to-poverty-ratio below 200% of the federal poverty level, qualifying them for basic food assistance. And 5.5% of those individuals have a child under 5 years of age.
