1.3.5 Share of Employment in Top-5 Largest Employing Sectors

1.3.5 Share of Employment in Top-5 Largest Employing Sectors

By now, most in the Valley are aware of the devastating job losses suffered by Walla Walla firms due to the pandemic.

As of the first week of May, the seven-week total of initial claims for unemployment insurance amounted to about 4,600. As a percentage of the 2018 average of all jobs in the unemployment insurance pool, this amounts to 17%. The plunge from the 2019 average is simply unprecedented.

Because the Coronavirus Aid, Relief and Economic Security Act, known as CARES, allows for temporary benefits to be paid to those outside of the traditional unemployment insurance pool, the share is actually a bit lower. These benefits cover sole proprietors and contract workers.

In 2017, the census counted a bit more than 3,200 in the category of “non-employer” firms. Adding this total to the number of workers in the unemployment insurance pool in 2018, we arrive at a total labor force in the county of about 31,000. (Participants in this labor force are not necessarily Walla Walla residents, a prominent feature of western county firm staffing.)

As a consequence, the share of jobs lost to all Walla Walla firms, at this date, is a bit lower, at 15%. If there is any consolation to this staggering percentage, it is the lowest of all Eastern Washington metro areas. Fifteen percent compares favorably, for example, to the 23% currently experienced by Spokane County firms.

Why has Walla Walla been able to duck the full brunt of COVID-19’s impact on the local economy? It has everything to do with the structure of jobs here. Walla Walla Trends indicator 1.3.5, offers some insights into this structure, as it tracks shares of jobs held in the five largest employing sectors: government, healthcare & social assistance, manufacturing, agriculture and retail. This indicator is based on the unemployment labor pool and does not include sole proprietors.

Over the past few weeks, the Institute has forecasted the job losses by sectors and industry for all Eastern Washington metros. These sector forecasts have been corroborated by a running total published by Washington ’s Employment Security Department for initial claims for unemployment benefits. At this point, we have a very good sense of job losses by sector, even if the growing number of sole proprietors/independent contractors have not been assigned to an industry.

It should come as no surprise that the government has experienced very few job reductions.

Government is comprised of all federal, state and local organizations, including public school districts. Currently, the total of claims stands at 175. Among all Eastern Washington metros, Walla Walla sports the highest share of government in its labor force, at 20%. Given the usual stability of government employment, Walla Walla can count itself blessed.

Healthcare & social assistance, the second largest sector, surprised our forecast at the Eastern Washington University Institute for Public Policy and Economic Analysis.

Initially, the forecast pointed to a very low number of job reductions. But the reality has been that surgeons have not been able to conduct elective surgeries, dentists were told by the state to close their doors, therapists could practice but did not, and that many in the social assistance category, such as youth and elder services, were told to cease operations.

As consequence, county job losses in this sector currently stand at about 600. This places it as the hardest-hit sector, bar one.

The third largest sector, manufacturing, has suffered little, relatively speaking. Showing jobs losses at about 375, the sector was largely included among essential services by the state. Job losses as a share of total in the unemployment insurance system are about 10%, a far cry from the rates experienced by other sectors.

Similarly, agriculture, the fourth largest sector in the workforce has nearly been completely spared from cutbacks. As the last week of April, the number of job losses stood at 86. This shouldn’t be a surprise, since field agriculture enjoys more physical separation than most economic activities. Not to mention agriculture was on the state’s “essential services” list.

The same cannot be said of Walla Walla’s next two largest sectors. Job losses in retail, the county’s fifth largest employment sector, cumulatively amounted to about 475 by the end of last month. Among all sectors, that was third highest. Steep losses in soft goods and furniture have been offset by gains at grocery, general merchandise and drug stores. Consequently, its losses as a percentage of the sector workforce were, relatively speaking, modest, at approximately 20%.

The first-place finisher for job losses is the sixth-largest sector, hospitality. By the end of April, the job loss count tallied by local restaurants, bars, caterers, coffee shops, hotels and motels was 800.

When expressed as a percentage of its workforce, the sector didn’t rank first, but still in the top five, at approximately 45%.

These are daunting numbers. Yet, this sectoral tally offers something positive – a path to help us understand how a staged economic recovery might look in the Valley. That will be the subject of a future column.

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D. Patrick Jones, Ph.D., is executive director of the Institute for Public Policy & Economic Analysis at Eastern Washington University. Find the Institute online at www.ewu.edu/policyinstitute

Vicki covers business and economic development, including tourism, the Port of Walla Walla and the Strictly Business column, as well as features. She has been reporting for the Union-Bulletin since late 2001.