Washington’s pandemic recovery remains slow and uneven

If Washingtonians needed another reminder that COVID isn’t done with us yet, the latest round of employment data should do the trick.

Last week’s jobs report showed that overall hiring was slowing: Washington added just 6,300 jobs in October, versus 18,800 in September, even as the nation’s hiring surged 70% for the same period. Even accounting for the large losses of education and other government jobs, the state’s hiring has cooled.

But the recovery isn’t just slow, according to data posted this week by to state Employment Security Department: it’s also markedly uneven, with some of the hardest hit industries and places showing the least progress in bouncing back.

King County, for example, has regained most of the roughly 150,000 jobs it lost in the pandemic; its workforce is now within 2% of its October 2019 size.

By contrast, neighboring Snohomish County’s workforce is still 7.1% smaller than it was in October 2019. In the last year, Snohomish County has added only around 300 more jobs, ESD data show.

San Juan County has 6.1% fewer jobs than it did in October 2019. Kittitas County has 8.2% fewer. In Mason County, 11% fewer.

Some of those geographic disparities reflect the pandemic’s uneven impacts on different industries. COVID was especially hard on leisure and hospitality businesses — statewide, they’re still down by around 46,000 jobs, or 13.5%, compared to October 2019. Those sectors played a disproportionately big role in some rural counties. In San Juan County, those businesses accounted for one in four jobs.

Likewise, manufacturing, which provided one in five jobs in Snohomish County before the pandemic, took a huge hit from COVID. The county’s aerospace industry, for example, is still missing a quarter of the workers it had in October 2019.

In King County, manufacturing made up just 7% of pre-pandemic employment, so the overall impact was much smaller.

By contrast, office-based businesses — notably, tech, finance, and professional and business services, which together accounted for nearly 30% of King County’s pre-COVID workforce — didn’t lose as many jobs to begin with and have recovered much better. By comparison, those sectors made up just 12.4% of the jobs in Snohomish.

In October, employment in tech, finance, and professional and business services in King County totaled nearly 466,000, which is actually roughly 24,000 more jobs than those sectors had in October 2019.

Those disparities were echoed in the latest data on job openings.

The employer with the most online job postings in Washington July through October was Amazon, with 34,726 listings, according to ESD data. That was followed by Microsoft, with 3,961, Providence Health & Services (2,636) and Salesforce (2,343.) Boeing was in eighth position, with 1,616.

(Amazon’s figures include tech positions as well as transportation and warehouse occupations, which illustrates the disproportionate growth of online retail during the pandemic.)

To some degree, the pandemic has accelerated pre-existing employment trends. Some sectors, such as manufacturing, often struggled before COVID, as did some regions. Counties such as Mason, Grays Harbor, Pacific and Jefferson still hadn’t recovered all the jobs they lost during the Great Recession, more than a decade ago, when the pandemic layoffs struck in March of 2020.

In many such counties, where traditional industries such as logging or fishing had already been in difficulties, the pandemic “certainly hasn’t helped,” says Scott Bailey, an ESD regional economist.

Economists caution against reading too much into a single month’s report. Job numbers are often revised, repeatedly, as states get more updated employment information.

But even encouraging employment news may merit closer scrutiny, warns Debra Glassman, a teaching professor of finance and business economics at the University of Washington Foster School of Business.

Glassman notes that Washington’s unemployment rate in October was 5%, which isn’t too far from the 4.1% rate in February 2020, right before the pandemic; and no county is currently above 6%. That all “sounds not bad overall,” Glassman says.

But those numbers can be misleading because unemployment data often excludes people who aren’t working and who have stopped looking, Glassman says.

In fact, Washington’s labor force participation rate — the fraction of state’s civilian population that are either employed or looking for work — was just 63.8%, compared to 65.7% in February 2020.

More broadly, the state is still missing roughly 62,000 of the jobs it had two years ago — despite the fact that many employers have been offering higher wages and other incentives.

“The labor market is still subject to a lot of pandemic-related dislocations and disruptions,” Glassman says. “We cannot yet pronounce it healthy or back to ‘normal’.”