By Dr. Patrick Jones
Wages climbed in 2021 Walla Walla County, but not nearly as fast as elsewhere. Trends indicator 1.1.4 tracks this key measure of the local economy over the past 20 years. The average for 2021: $50,340. That represented a gain of about $1,900 over 2020, or 3.9%. Over the five years prior to 2021, the average annual wage in the county increased by about the same percentage, 3.8%.
Compared to the state average, Walla Walla’s experience was a mild bump. Average annual earnings statewide, already far higher than that of the county, leaped by about $5,900, or 7.4%. As indicator 1.1.4 reveals, the 2021 Washington average landed at about $82,500.
While 2021 kept the Walla Walla average annual salary far below the Washington average, it was a bit higher than in two other Eastern Washington metro areas, Wenatchee and Yakima. It was considerably lower, however, than in Grant and Spokane Counties and far lower than the average annual in the Tri Cities. (Values for all these communities can be accessed from the map on the homepage of Walla Walla Trends.)
To understand why pay in Walla Walla is relatively low, look to its component parts. Trends indicator 1.1.5 tracks the average annual wage for the five sectors employing the highest number of workers. It then compares local pay to the state average for that sector. (To simplify the graph, click the legend boxes off and on.)
The largest gap among the top five sectors is between retail earnings here and statewide. As of 2021, the average pay in Washington was almost $76,400. Walla Walla’s annual average: about $33,000. This huge spread is largely due to the large state-wide presence of “non-store retailers” and its non-existent presence in the county. Walla Walla, of course, is not alone in this omission among eastern Washington metro areas.
The second largest absolute gap between Walla Walla and the state lies with manufacturing. It was the county’s highest paying sector, but the gap in 2021 was nearly $20,000. A closer inspection of the manufacturing wage data for the state uncovers three sectors where the annual average is above $100,000: electronics & computers, refineries, and importantly transportation equipment (largely aerospace). Walla Walla, of course, has none of these industries present.
Most of Walla Walla’s manufacturing consists of agricultural processing and beverage manufacturing. Despite some data suppression by the source to protect privacy, it appears that local wages are aren’t too much lower than the state average for this industry. So the big difference in manufacturing wages between the state and Walla Walla is a consequence of the mix of manufacturing.
Government, whether federal, state or local, is the second largest sector here. (Local government numbers are driven by public school employees.) The 2021 gap to the state was large - a little shy of $18,000. However, the data for this sector in Walla Walla are incomplete due to the non-reporting of a significant federal agency over the past two years. And federal jobs have enjoyed the highest average salary in the county.
To work around the omission, let’s assume that federal pay locally went up over interval 2019 to 2021 by the same percentage it did statewide. We can then approximate the likely overall government annual salary here: about $65,100. If this arithmetic is correct, government would become the highest-paying of the five largest sectors in the county.
That adjustment reduces the gap in government wages here to the state average to nearly $13,000 - still a large difference. It is worth noting that the component making up the largest part of the government pay gap here and statewide comes from the largest part of government employment – local government. The 2021 gap was about $17,000.
The third highest-paying sector among the top five in Walla Walla consists of healthcare & social assistance workers. Social assistance largely covers workers caring for youth and the elderly, but not in nursing homes. This sector’s gap to the state in 2021 was about $6,000. In fact, there was little difference between the pay of social assistance workers here and statewide. There was, however, about a $15,000 gap between the pay of workers in ambulatory care (medical offices, including everyone).
Due to necessary suppression by the source of the data, the Washington Department of Employment Security, we cannot make comparisons between the two remaining sub-sectors: hospitals and nursing homes. The difference between Walla Walla and Washington for the combined two sectors is less than 10%. Consequently, most of the pay gap in this growing sector of Walla Walla lies with ambulatory care.
Landing in fifth place by pay among the top five sectors in the county is agriculture. Until last year, any gap was negligible. Note that it has paid better than local retail trade.
To be sure, there are higher paying sectors in Walla Walla than the ones depicted in indicator 1.1.5. Consider finance & insurance, with an average salary in 2021 of $71,700, making it the highest paying sector. But despite the presence of two headquartered banks, this sector makes up only 2.3% of the workforce.
Construction, education services and wholesale trade land among the top five sectors by pay. Their average annual salaries were approximately $56,200, $56,800 and $57,400, respectively, in 2021. But like finance & insurance, they are not large enough to land in the top five sectors by headcount. They are, of course, included in the average tracked by indicator 1.1.4. The information sector, which includes software publishing houses besides the traditional media, is very small here. Its statewide average annual wage is nearly $275,000!
If a goal of economic development is to raise incomes, upping earnings is the major local lever. Its success, in turn, depends on the kinds of jobs demanded. It is difficult to foresee Walla Walla’s future average earnings climbing much faster than the recent average, unless the higher-paying sectors somehow grow faster than they have. The near-term stakes are high. As indicator 1.1.4 shows, inflation-adjusted wages were challenged in 2021. They will be even more so when inflation data for 2022 are posted.