Net High Paying Jobs Created Plagued by Unpredictability

by Brian Kennedy and Dr. Patrick Jones

While adding jobs important to a community, adding well-paying jobs has increasingly become the priority of economic development organizations and policy makers. Higher wages allow for more discretionary money to be spent locally where the impacts can be felt throughout the county. Following the trend presented here allows Walla Walla residents to track the growth high wage jobs in the labor market. The short story:  a recovery in 2019 from a prior years’ decline and actual growth compared a sharp drop statewide, a return to parity doesn’t seem too bad.

Indicator 1.3.7 tracks the total number of jobs and annual growth rate of jobs added that had wages 25% higher than prior year’s annual average wage. That sounds like a mouthful, but it is pretty simple to break down. To be counted in this indicator for 2019, an occupation must have an average annual wage that was 25% greater than 2018’s average wage. In 2018 the average annual wage in Walla Walla was $44,615. Thus, to be counted, jobs with average annual wages for any occupation needed to surpass $55,769. An important nuance is that this trend tracks net jobs, in other words jobs lost as well as gained. Therefore, not only does the occupation need to have a high wage, we are only counting those that are more or less than the number of jobs prior year.

A look at the graph shows that between 2018 and 2019, Walla Walla only produced an additional 25 jobs that paid 25% higher than 2018’s average annual wage. This equated to a negligible gain in the average annual growth rate, posting just a 0.5% increase. While this may sound like a less than ideal result, it’s not so bad when you compare that to the state which contracted by about 10%. And it represents a local recovery from a fall of 20% in the prior pair of years.

Additionally, occupations that added jobs, albeit small, came from all sectors in the economy rather than being isolated in any one field. The Walla Walla community saw growth in graphics designers, electrical and mechanical engineering technicians, environmental scientists and engineers, and business operations, human resources and marketing research analysts. Most of these supported wages in the $60,000-$80,000 range.

Interestingly enough, the statewide trend has recently run counter to what has happening locally. When there has been growth in the state in these jobs, Walla Walla experiences a drop. In the last three years, the state has only added higher paying jobs between 2017 and 2018. In 2019, the state actually experienced a drop of 10.1% of jobs that paid 25% over of 2018’s average annual wage.

Part of this disparity between the state and local communities in Eastern Washington is a result of the disparity between wages. For jobs to be counted in the state estimate, annual wages needed to surpass $82,000. Compared to Walla Walla there is a difference of over $25,000. Based on the same measure, the difference alone is nearly half of what Walla Walla’s wage of at least $55,000 needed for added jobs that would be counted in the trend.

This trend is only being tracked in two other indicator projects in Eastern Washington: Benton Franklin Trends and Chelan Douglas Trends. Due to Walla Walla recent status as a metropolitan statistical area, there are only 3 years’ worth of data that can be directly compared to these counties.

The Tri-Cities area has shown growth every year in the last three years. Moving from 2018 to 2019 did show the low point in that trend, which happens to match Walla Walla with a growth rate of just 0.5%.

In the last three years, the Wenatchee metro area has been trending downward after a few years of decent growth. Three years ago, there was growth of about 8%, which fell to parity the following year, and then most recently has fallen to -1.5%.

As tracking the trend of higher earning net jobs becomes difficult with the limited number of observations a look at the overall net jobs, found on Indicator 1.3.3 may help shed some light on the local job market.

Overall net job growth here has been bouncing back and forth for the greater part of the last decade. One year its up, the next year its down. The last ten years has only shown growth of 1,226 additional jobs, or a compound annual growth rate of just 0.5% in the county. Mostly recently, 2019 only added 12 more jobs than were added in 2018.

While it may seem counter intuitive that overall jobs added were less than the higher earning net jobs added, it is more an anomaly of the difference in datasets, and the specific numbers aren’t the important bits but rather the overall trend itself. Net jobs is simply using the Quarterly Census of Employment and Wages (QCEW) where the higher earning net jobs indicator uses both QCEW to find the overall average annual wage and the Occupational Employment Statistics (OES) to get the individual occupational data that determines individual wages within the sectors.

Unfortunately, overall net jobs in Walla Walla has been under performing the state and many other Eastern Washington metro areas. Overall jobs in the state have grown by a compound annual growth rate of 2% over the last ten years. Interestingly enough, Benton and Franklin Counties, Chelan and Douglas Counties, Yakima County, and Grant County all have grown by 1.5% over the last ten years, outperforming Walla Walla County by a full percentage point.

So, the data underscore that Walla Walla’s job growth has been variable (and low), especially in the higher wage occupations. Its path seems to run counter to the state in all three years of the trend. In addition to this, overall net jobs have been teeter-tottering from positive to negative growth pretty consistently for the last decade. A glimmer of hope, at least, is that the higher wage occupations added in 2019 come from a broad swath in the labor force, which in turn reduced the risk of a high concentration of jobs in a particular sector.