After the Pandemic: A Return to Stable Job Growth for Walla Walla County

By Dr. Kelley Cullen

As economists continue to sort through the data to better understand the impact of the pandemic, one of the measures they use to assess economic performance is job creation. Because detailed data is not available on new hires or separations, net jobs created can be imputed from the total change in the annual average number of people employed in the county from one year to the next.

Using data from the Quarterly Census of Employment & Wages (QCEW), Walla Walla Trends 1.3.3 measures the number of net jobs created, the annual average employment numbers and the percentage change from year to year for the county. A positive number represents job growth, while a negative number represents the number of net jobs lost during the year. Washington State is offered as a benchmark.

Because of the disruptions around Covid-19, there were more jobs lost than created in 2020. Not surprisingly, net jobs created in 2021 was positive across most regions as people returned to work and the economy regained its momentum. In Walla Walla County, 2021 saw 653 net jobs created, more than offsetting a drop of 407 the previous year due to the pandemic. Over the past year, the county averaged over 28,000 jobs – the highest ever. It would appear the local economy has weathered the storm.

Walla Walla’s most recent annual rate of growth of 2.4% from 2020 to 2021 is just below the state average of 2.8%. Neighboring Franklin County had a similar rate of 2.6% as did nearby Asotin County. Both Whitman (+3.4%) and Benton (+3.9%) saw more robust rebounds in annual net jobs created.

Looking a little further back, we see that Walla Walla’s annual growth rate of net jobs created has averaged 2.7% over the past five years. The state’s overall net job creation rate was slightly higher at 3.9%. In southeastern Washington, only Asotin County’s average five-year growth rate of over 10% bested Walla Walla. Whitman County had negligible net jobs created in the past five years and Garfield showed negative net job creation. Even Franklin County only experienced an average annual rate of growth of around 2%.

One way to put job creation in perspective is to compare how the economy actually performed to what experts predicted.  At the AWB Institute, “Washington in the Making” has provided a “Futurecast” for the state as well as for each of the counties. This data is based on the Office of Financial Management (OFM) projections of population and employment projections at the Employment Security Department (ESD). The job openings forecast in Washington state follows a methodology developed by the U.S. Department of Labor. In this version, the number is the sum of all occupational openings expected in any given year. The openings may be due to economic growth, retirements, or workers moving from one occupation to another. The forecast does not include “churn,” or job openings within an occupation filled by someone within the same occupation. As such, it represents new demand for a particular occupation, aggregated over all occupations.

According to the AWB Futurecast, average annual employment in the county in 2020 was 27,462 and is expected to grow to over 36,000 by 2029. If the county continues its stable job growth of around 2%, the total employment could reach 38,000 by the end of 2029 – exceeding current projections.

So, where is the net job creation occurring throughout the local economy? Walla Walla Trends 1.3.5 shows the share of employment by the Top Five Sectors. Currently, the largest sectors by employment are government, health care & social assistance, manufacturing, agriculture, and retail trade. Although manufacturing (up 5%) and retail trade (up 2.4%) both experienced an increase in net jobs in 2021, the other three largest employing sectors either stayed flat (health care) or fell (government, agriculture). Instead, the biggest gains were experienced in construction (+22%), accommodation and food services (+17%), and arts, entertainment and recreation (+12%).

Looking back over a little further really sheds more light on the growth industries in the county. In the past five years, jobs in administrative support s have grown over 50%, in construction by 40% and arts, and in entertainment and recreation by 33%. The sustained increase in arts/entertainment, along with strong recent growth in accommodation and food services, could be contributing to the construction and real estate sector’s growth as well. It seems people are finding the quality of life in Walla Walla desirable.

Along with the growth in employment in some sectors, there has been declines in employment in others. In particular, agriculture has continued to see decreasing net jobs. From 2020 to 2021, the decrease was almost 3% and over the past five years, employment in agriculture in the county has contracted 10%. Interestingly, educational services have seen a decline in employment of 8% over the past five years. Some of this could reflect either falling enrollments or a transition to more online instruction.

Overall, the county economy seems to have survived the disruptions association with the pandemic and is back on track with positive net job creation. Having steady and stable job growth allows policymakers to make more informed decisions and promote long term growth.