The Great Recession of 2008 delivered a massive shock to our national labor market: From an historic low of 4.7 percent in late 2007, U.S. unemployment had spiked to over 10 percent by late 2009. As of March this year, the national unemployment rate had recovered significantly, to 6.7 percent, but the painfully slow recovery has eroded household wealth across the country, driving millions of families below the poverty line, with millions more still unable to find steady work.
So how did Seattle workers fare through this dramatic downturn? And what can we do to insulate our region against future shocks?
First, the good news: As hard as the recession was for the region, Seattle and the Pacific Northwest recovered remarkably well. At the peak of the recession, Washington state suffered job losses in line with the national average, but since late 2012 the state has steadily outpaced the national rate of job growth. And while the state as a whole held its own, the greater Seattle area has produced a stronger employment climate than any other major metro in the country.
As the Wall Street Journal reported last August:
Of the nation's 49 metropolitan areas with populations over 1 million, only two — both in California — have seen their unemployment rate fall more than Seattle's over the past year. And neither of those areas has seen its unemployment rate go as low as Seattle's 5.9 percent.
Even more importantly — and counter to popular perception — Seattle’s growth hasn’t been driven by narrow strength in the tech industry. Again, the WSJ:
The secret to Seattle's success is its mix of industries — a combination of technology, service and manufacturing that have hired more readily than those other parts of the country. Seattle has added factory jobs at a rate nearly four times as fast as the rest of the U.S. in the past two years. Retail and construction jobs have grown more than twice as fast.
The strong local recovery owes much to Seattle’s ability to hold on to historical strengths in its manufacturing and maritime industries. But it also reflects the broad-based prosperity generated by the region’s growing role as a global center for life science and information technologies.
According to research from UC Berkeley economist Enrico Moretti, “for each new high tech job in a city, five additional jobs are created outside high tech in that city” in local services occupations like education, health care, construction and retail. And a quick survey of the 100,000+ jobs added to the Seattle economy since mid-2011 reflects those broad gains, with the strongest job growth appearing in non-tech sectors like business and professional services (19 percent), retail trade (16 percent), manufacturing (15 percent), leisure and hospitality (15 percent) and education and health services (14 percent).
So if Seattle was able to outperform the nation in the last recession, what are we doing to ensure that we weather the next downturn with similar aplomb?
Here’s where the story gets even more exciting.
According to the City of Seattle’s Office of Economic Development, private sector jobs account for the vast majority (83.5 percent to be exact) of local full-time employment. Many of those jobs are provided by companies — and even entire industries — that didn’t exist 20 years ago, in categories like enterprise software, e-commerce, biotechnology and cloud infrastructure.
Since individual companies come and go, the best predictor of future prosperity in the region is the breadth and depth of our local entrepreneurial ecosystem. The healthier our culture of entrepreneurial business and finance, the more likely we are to continue to produce a diverse collection of large, profitable local companies capable of employing hundreds of thousands of people at competitive wages.
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