Five years after the first financial catastrophe of the 21st century, Clark County is finally flexing some real muscle, dropping its role as an economic laggard, exceeding the growth rate of the nation and pulling closer to that of the state, the most recent labor market data show.
Could this be the county’s economy?
In the 12 months through February, Clark County added a net 2,500 jobs, an increase of 2 percent over the year. By contrast, the nation and Washington posted annualized growth rates of 1.5 percent and 2.5 percent, respectively.
Whether the bounce will prove fleeting remains to be seen. To be sure, in better times, the county’s annual growth rate typically clocks in at 2.5 percent to 3 percent. Nevertheless, as Scott Bailey, regional labor economist for the state Employment Security Department, put it: “We’ve been catching up overall.”
That’s not to say we’re all caught up.
For perspective: Since February 2010, when employment losses stopped in the aftermath of the crash, Clark County has recovered 4,600 jobs, or 46 percent of the 9,900 jobs vaporized by the recession.
Manufacturing, nondurable goods and corporate office employment have experienced gains. PeaceHealth’s establishment of headquarters in Vancouver, for example, pumped office jobs into the community. The housing market is forging a comeback, too. But the recession casts a long shadow: Residential building permits hover well below their average during the 1997-to-2006 decade.
As a result, Clark County’s situation remains tenuous. A confluence of national and local factors is keeping it that way. The county, like so many other metro areas, got hammered by the worst economic calamity since the Great Depression, Bailey said. You simply don’t get up, dust yourself off and quickly move forward from that.
But a dependence on homebuilding — driven by land availability and by the county’s role as an absorber of suburban population growth in the Portland metro area — hasn’t helped, either.
‘People are finding jobs’
As the county’s job growth has picked up, its unemployment rate has fallen, too. A 2 percent annualized jobs growth rate, Bailey said, means that “people are finding jobs.” When the metro area’s growth rate is revised in the coming months, Bailey said, it’s expected to post the same rate as Clark: 2 percent.
What’s more, Clark County’s initial claims for jobless benefits under Washington’s insurance system decreased 9 percent in February, “the lowest level since March 2007,” according to Bailey’s “Southwest Washington Labor Market News” report released Tuesday.
Still, Bailey added, the county remains home to nearly 20,000 unemployed residents. On top of that, the county continues to suffer from underemployment, in which people who want full-time jobs settle for part-time work instead.
The county’s preliminary unemployment rate in February — 9.6 percent — will likely be revised upward to roughly 11 percent to account for unemployed county residents who previously worked in Oregon. A similar revision drove up January’s initial jobless rate of 9.9 percent to 11.4 percent.
Since the 2008 financial crisis hit, Clark County’s unemployment rate reached its highest level in March 2010: 15.9 percent.
Since then, the jobless rate has fallen, albeit in an agonizingly slow fashion. “Clark County is doing better” in 2013, according to Bailey, while its neighbors in Southwest Washington — Cowlitz and Wahkiakum counties — aren’t.
The best unemployment rate in Washington — 5.6 percent — belongs to King County. That region has “some big, high-wage industries,” Bailey said, which enables consumers there to spend more, which further expands the economy.
“Aerospace has been doing extremely well,” Bailey said of King County, and Amazon and Google are expanding in Seattle. In fact, King County alone accounts for roughly 33 percent of Washington’s labor market. “Take King County out,” Bailey said, “and you’ve got the rest of the state looking a lot more like Clark.”
Report on 2012
Nevertheless, Clark entered 2013 with some wind in its sails from last year — although it was hardly a super-strong wind. In a recent analysis, Bailey reviewed the county’s economic results in 2012. Among his initial findings:
• The construction sector posted a 3.7 percent increase in jobs last year. However, the annual average of 8,400 jobs remained well below the pre-meltdown peak of 13,000.
• The housing market, while improving, remained anemic. Permits were issued for 1,500 residential units in the year, according to preliminary Census data. That’s the most since 2007 but still nowhere near the average of 3,900 in the 1997-2006 decade.
• Manufacturing “had a Jekyll-Hyde year,” adding 500 jobs in the first half and none in the second half. Employment in the sector averaged 12,100 for the year. That compares with 13,900 in 2006.
• Retail trade saw “very modest job gains,” increasing by 2 percent to reach 15,400 jobs — still 800 below the sector’s 2007 peak.
Land for jobs scarce
As it attempts to put the economic crash behind it, Clark County may stand at a crossroads.
Certainly, it’s not alone in facing high unemployment and slow job growth. Bailey said other metro areas face similar situations.
The 2007-2008 financial crisis saddled scores of communities with large household debts and high home-foreclosure rates — tremendous drags on consumer and business spending, which largely drive growth in the U.S.
The broader economy has to be working in a community’s favor in order to turn things around. But communities can make choices about how they grow.
Bailey said Clark County, where land-use policies have favored residential development, has long served a special role in the Portland metro area by taking in more than its share of the region’s suburban population growth. But it also has strengths, including Washington State University Vancouver, a strong workforce and good transportation links, he said.
Regional economic-development leaders are attempting to build on those strengths and to overcome a deficit of industrial land. Lisa Nisenfeld, president of the Columbia River Economic Development Council, said Clark County may have learned something from the bursting of the housing bubble. Providing “most of our prime land simply for homebuilding may not be in our best interest,” she said, “if we want more people to stay and work in Clark County (and) not have to commute over the bridge.”