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Seattle's narrowing inequality and surprisingly poor Asian and African Americans

A new report on the city's economy turns up some good news, and some shocks and mysteries.
Downtown Seattle

Downtown Seattle Lassi Kurkijarvi/Flickr

You wouldn’t expect to find unexpected revelations about race, class, and income disparities in the city in an official report with the innocuous title “Seattle Economic Indicators.” But that’s exactly what this brief, unheralded report, released in April, contains.

Back to those revelations in a bit; let’s save the best for last, in the way of burlesque, journalism, and other teaser enterprises. The city’s Office of Economic Development (OED) released its first “Economic Indicators” report last August. It plans to make them a twice-yearly rite and, as the years go on, use them to track “how things change over time,” as OED senior policy adviser Nancy Yamamoto puts it.

In the meantime, this second installment does compare the latest data to several other recent years. And it provides a revealing snapshot of how Seattle is faring five years after asset values peaked, four years after the financial bust hit, and three years after the fragile national recovery began.

Total business revenues in the city rose more than 3 percent in 2011 from their 2010 trough, to $52.8 billion. But they’re still well under their 2007 peak of $62.7 billion, just about what Bill Gates is worth now. The demise of Washington Mutual doubtless played a part. But the overall finance, insurance, and real estate sector held remarkably steady through those five years. Manufacturing and businesses based elsewhere were the sectors that suffered the greatest declines.

The estimated number of jobs in the city has meanwhile recovered from its 2010 trough to 478,000, more than what it was in 2009. But it sagged in the last quarter of the year. Among employment sectors, professional and personal services were the biggest job gainers, followed by manufacturing and retail. The public sector was the biggest job shedder, contrary to traditional notions of government’s inexorable growth.

Seattle’s unemployment rate fell from 8 to 7 percent between late 2010 and late 2011, but was still way above the 4.3 percent rate back in the halcyon days of 2000.

That represents a switch in status between Seattle and the suburbs and smaller cities surrounding it: The city’s unemployment rate was 9 percent higher than the broader Seattle-Tacoma-Bellevue metropolitan area’s in 2000. Now it’s slightly lower. In 2011 it was 10 percent higher. Both remain significantly lower than the statewide rate.

Seattle bucks a dismal national trend on one important gauge: business startups. According to U.S. Census data the rate of business creation nationwide has declined steadily since 1977, the first year recorded, from 17 percent of all businesses to a trough of just 9 percent in 2009. (It ticked back up to 10 percent in 2010, the last year tabulated.) The Census Bureau concludes that “the U.S. has become less entrepreneurial as a result of the decline in startups and the lack of activity by young businesses.”

You wouldn’t know that here in Seattle. According to the new city report, business creation in-city surged in 2011, to 9,000 startups, up from 7,900 in 2010 and just 6,700 in 2000.

Hard times often spur entrepreneurship, as laid-off workers and discouraged jobseekers turn to making candles and starting e-commerce enterprises in their garages. Perhaps there’s a year or two’s delay in the process, or maybe more small businesses are getting city business licenses (and showing up in the stats) than previously. Otherwise, Seattle seems to be bucking the trend; startups declined in the bust year 2009, and have climbed since.

Meanwhile, business closures plummeted, from 8,500 in 2009 to just 3,100 in 2011. The result: a net gain of 6,000 businesses last year. That’s a lot of candles and e-commerce empires.

Another popular truism about the bust is that those at the top have thrived more than ever, while everyone else is hurting. That’s probably true for those at the very top, the notorious 1 percent. “The very rich still earn astronomical amounts,” notes Chris Mefford, an economist at Community Attributes, the Seattle-based consultant that prepared the “Economic Indicators” report for the city. Their share of the nation’s wealth (accumulated, compounded income) has climbed to nosebleed levels.


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Comments:

Posted Wed, May 16, 2:36 a.m. Inappropriate

1. You're surprised to find a racial disparity in wealth in Seattle?

2. Why not investigate immigrant experience here?

As for disparity compared to other cities, I suspect that gentrification has a lot to do with it. Black homeownership has probably decreased significantly in the last 20 years, and those still renting are having to pay more of their income in rent.

Trevor

Posted Wed, May 16, 11:19 a.m. Inappropriate

It isn't that hard to figure out.

Seattle's traditional African American communities are being gentrified and becoming whiter. The people who once lived in those neighborhoods who rented have moved out the the suburbs because their rents were going up. Those who owned might have sold their houses and moved to the suburbs. The ones who remain are more likely to be in subsidized or substandard housing. The census data comparisons between 2000 and 2010 show minority movement to the suburbs as whites are moving back in to the city.

It seems like we're seeing people with money pushing people with less money out of the city. People with very little money remain behind because they are eligible for Seattle Housing and other subsidized housing programs. Seattle is home to an increasingly very well-to-do population while at the same time is the county's dumping ground for social services and subsidized housing.

talisker

Posted Wed, May 16, 5:19 p.m. Inappropriate

What the article said is that INCOMES of African-Americans were relatively low compared to national averages; where the AAs live does not, other than peripherally, affect their income. The source of the data that is used in the above report is not revealed; obviously not the US census because it is only tabulated every ten years so how is "household income" arrived at for year to year comparisons? could be a lot of estimates with very fuzzy numbers. Anyway, Mr. S. always writes an interesting article. My take on the asian income anomaly is that asia is a very big place and the northern asians, Chinese and Japanese immigrants probably do not dominate as much in Seattle as they do in the rest of the USA. I would expect Chinese and Japanese to have higher incomes than Thai, Vietnamese, Cambodians, etc.

kieth

Posted Sun, May 20, 6:07 a.m. Inappropriate

Given we have been extensively creating a new demography, isn't it time we began analyzing just what the impacts of our population growth policies are on education, congested streets and freeways, pollution of air and water--and on growing poorness of an ever-larger cohort. Illegal and legal immigration are the primary drivers, and printing ever-more money to compensate for so much loss of viable value makes clear we are on unsustainable course.

Posted Mon, May 21, 3:42 p.m. Inappropriate

This is fascinating. Thanks.

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