by Dr. Patrick Jones
A growing economy typically requires a growing labor force. If a core economic development goal is to increase the amount of local goods and services sold, usually more human input is required. But not always. Labor productivity gains can boost output independent of additional hours worked. Still, productivity isn’t strong enough to account for all gains in the size of the economy.
Walla Walla finds itself in a curious spot, as indicator 1.3.1 reveals. After 2009, the size of the labor force has actually declined for six years in a row, only recently showing gains. At 29,270, the number of those willing to work is actually 1,500 less than in 2009. This pool of workers consists of Walla Walla residents, ages 16 and above, who are either employed or unemployed and looking for a job.
Among eastern Washington metro areas, Walla Walla is the only county not to show a labor market recovery from the Great Recession. In all areas east of the Cascades, the size of the civilian labor force shrank in the years after 2008 or 2009, as laid-off workers simply quit the labor force and as would-be entrants were put off by the daunting prospects of finding a job. Yet, as the cycle turned upward, all areas yielded a workforce exceeded the earlier peak.
These results are reflected in the line component of the graph of indicator 1.3.1. There one can quickly see that just before last economic peak and for a couple years afterwards, the participation rate of Walla Walla residents in the labor force was actually higher than that of the Washington state. This rate is nothing more than the size of the civilian labor force relative to the overall population 16+. The denominator does not include the penitentiary population.
Since 2013, however, the rate has hovered a couple of percentage points below the state rate. This experience is different than for neighboring Benton, Franklin and Yakima Counties, where their residents’ involvement in the labor force is at a higher level than Washington’s. Spokane County’s participation rate, like Walla Walla’s, falls below the state rate.
The phenomenon of a declining labor force participation rates is not unique to Walla Walla. Washington (and for that matter, the U.S.) has experienced a declining labor force participation for years, as indicator 1.3.1 displays. Undoubtedly, many reasons come into play, but the most important is demographics. The baby boom cohort, largest in U.S. history, has started to retire. Their replacement generations in the workforce are not as large, a condition that varies locally, with consequences for Walla Walla.
How might we know this? A summary measure of age, here the median age, shows Walla Walla at nearly 38 years in 2017, the most recent year. Compare that to its counterpart in the Tri Cities, at 34. And to Yakima County, where its median age is younger yet, at 33. Clearly, a younger age means a relatively greater share of working age residents.
One can go directly to an estimate of the share of residents 65+ as well. As this graph reveals, nearly 19% of the Walla Walla population fell into that category in 2017 vs. 14% in Yakima.
A consequence of appearing on the lists of “best places to retire” is the likelihood that Walla Walla’s population will likely continue to skew older. Of course, if retirees aren’t fully retired, they will add the ranks of the labor force, and therefore to the size of the economy. But if retirees continue to claim a growing share of the population and most decide to forget punching any clock, then the county economy will likely face slow growth.
Two factors could mitigate this prospect. The first is tourism, where goods and services sold depend on out-of-towners. The second is the continued travel by residents of Benton or Franklin Counties to especially western Walla Walla places of work. Both are positive forces if one cares about Walla Walla’s economy growing at a decent pace.