‘Good news’ for regional economy
Okanogan County saw a dramatic decline in the number of unemployed residents in June this year compared to last June, a positive sign for the county’s economic recovery after the damage caused by last year’s pandemic-related layoffs.
The drop in the county’s unemployment rate is “extremely good news” for the local economy and points to a slow return to normal, said Donald Meseck, a regional labor economist with Washington’s Employment Security Department.
The unemployment figures were documented in data released by the Employment Security Department this month, and showed that Okanogan County’s unemployment rate was 5.6% in June, down from 9.6% in June of 2020. That means “783 fewer Okanogan County residents were out of work this June than in June 2020,” Meseck said in an analysis of the state employment figures.
Last year, as the pandemic shut down businesses, unemployment rates in Okanogan County rose steadily from April through December. But the good news, said Meseck, is that the jobless rates have declined in each of the past six months.
The state data showed that the number of people in the county’s labor force fell by 113 from June 2020 to June 2021, Meseck said. However, “the modest … shrinkage in the labor force was more than offset by this dramatic decline in the number of residents unemployed in June 2021,” he said.
“The good news is that year over year (comparing the same month of one year to another) employment in the nonfarm economy is growing and the unemployment rate is dropping,” Meseck said.
“In fact, the Okanogan county unemployment rate of 5.6% this June was one-tenth of a percentage point lower than the 5.7% reading in June 2019 — an indication that the local economy is slowly returning to some level of normalcy,” Meseck said.
As unemployment numbers have decreased, the number of nonfarm jobs in Okanogan County increased by 4% in June of 2021 compared to the same month last year. Employment rose to 12,600 jobs from the 12,110 jobs in June of 2020 “during the heyday of COVID-19-related layoffs,” Meseck said.
For historical perspective on Okanogan County employment, Meseck said that the county’s economy peaked in 2008 when there were 13,040 nonfarm jobs, before the Great Recession (December 2007-June 2009) hit the local job market. Average nonfarm employment countywide “has experienced some ups and down ever since,” he said.
“In 2020, the local nonfarm market lost another 670 jobs primarily caused by COVID-19-related layoffs, which drove average annual nonfarm employment to … the lowest point in the past 13 years,” Meseck said. “Historically, Okanogan County is not doing well, especially after the COVID-19 layoffs last year,” he said.
“Fortunately, starting in January 2021, nonfarm employment in the county began expanding. This uptrend has continued through June 2021 as the number of nonfarm jobs rose by 490 jobs (up 4%) and employment advanced from 12,110 jobs in June 2020 to 12,600 in June 2021,” Meseck said. “But have we regained all those jobs we had in 2008? No.”
Jobs in the leisure and hospitality industry — a core part of the Methow Valley’s economy — account for the lion’s share of the 490 nonfarm jobs added countywide between June 2020 and June 2021, Meseck said. The county had seen job losses in leisure and hospitality for 23 consecutive months (Feb. 2019 through December 2020) before posting job gains beginning in January 2021.
Between June 2020 and June 2021, leisure and hospitality (hotels, restaurants, amusement and recreation services) added 470 jobs in the county, a sharp 41.6% upturn, Meseck said.
Jobs in state and local educational organizations also saw an increase between June of last year and this year, adding 100 new jobs countywide. The retail sector in Okanogan County, however, has continued a downturn in employment that began in 2019, Meseck said.
In 2018 the county’s retail sector gained 50 new jobs, but declined by 60 jobs in 2019 and by 40 jobs in 2020. “Hence, even before COVID-19-related layoffs hit the local economy in 2020, the local retail trade sector was struggling,” Meseck said.
Although retail trade employment in Okanogan County grew in April and May this year, the retail sector lost 100 jobs in June this year compared to last year, Meseck said. The statewide retail trade employment picture looks brighter and has been expanding since September 2020. The majority (61.6%) of the retail trade jobs added statewide between last June and this June have been in internet shopping businesses, according to state data.
The state employment data released this month shows longer term trends in employment, including a drop in the number of agricultural jobs in Okanogan County by almost 25% between 2010 and 2020. The share of agricultural jobs, as part of the county’s overall employment, decreased by 5.8 percentage points in that 10-year period (from 32.1% to 26.3).
On the other hand, the agricultural payroll showed an increase in wage growth in the agricultural job sector from $82.3 million in 2010 to $115.9 million in 2020, a 40.7% increase. But the share of agricultural wages, compared to total job payroll in the county, was virtually stable at 18.7% in 2010 and 18.5% in 2020.
These agricultural employment trends “showed that the agricultural industry has become less influential in Okanogan County’s economy” when compared to total employment, Meseck said.
“Certainly agriculture is still a seasonal industry in Okanogan County, but anecdotal evidence indicates that more agricultural workers are being hired into full-time year-round positions, with relatively fewer hires into part-time/seasonal positions,” Meseck said. “Plus, automation in the picking, packing and sorting of fresh fruit and vegetables appears to have reduced the need for labor.”
Those factors, Meseck said, may account for why the share of agricultural jobs in the county’s overall employment has dropped, while the share of wages paid to agricultural workers remains almost unchanged.
The state employment data is not seasonally adjusted, meaning the statistics have not been adjusted to remove effects of seasonal patterns, such as construction, tourism and holiday retail sales.