By the Numbers: Rents up, vacancies steady

First published Nov. 9, 2008

The statewide rental vacancy rate (at least as far as the 18 counties surveyed by the Washington Center for Real Estate Research) is 4.1 percent, less than half the national average of 10.7 percent. The rental market typically is tied to the job market – when major employers are hiring (Microsoft, Boeing) they bring in workers from outside the region, and those people have to live somewhere. And with the upheaval we’ve had in the real estate markets, more people are opting to rent.

Given that, “rental prospects are currently strong, with potential buyers remaining on the sidelines to see if home purchase prices might decline, while others find that tougher mortgage lending requirements and higher mortgage rates make homeownership infeasible at the present time,” the report says.

Not all markets are created equal, of course. Cowlitz County – where, as we’ve often discussed the economy is bad shape – saw year-over-year declines in average rents, with average rents falling 5.3 percent, to $534. (The survey found most units are one-bedroom apartments; two-bedroom, one-bath units are the next most common.) Likewise, Clark and Skagit counties, where the economy has been softening, reported rents that were essentially flat. (Clark was unchanged at $721; Skagit was up three bucks to $733.)

Oddly, Yakima County reported a 2 percent drop (to $526) in average rents, even though vacancy rates fell (from 3 percent to 2.7 percent). The first person with a logical explanation for that gets a one-year subscription to the magazine.

But booming counties saw rents rise and vacancies fall. King and Snohomish counties, where job growth has been steady despite the national turmoil, reported rent increases around 9 percent. (King was up 8.5 percent to $1,026, Snohomish was up 9.3 percent to $933.) Spokane also reported a strong market, with average rents up 8.2 percent, to $622.

Rents in the Tri-Cities were up 7.1 percent (to $601), but vacancy rates fell in half, to 4.2 percent from 8.8. Kitsap County also had a sharp decline in vacancies (falling to 4.2 percent from 7.8); rents there were up 4 percent to $815.

Some of the smaller counties that we don’t normally track saw big gains. Walla Walla County saw average rents shot up 13.7 percent year-over-year, going to $582, and Whitman County reported an 8.7 percent gain, to $634, even though vacancy rates increased to 8.2 percent from 5.8.

By the Numbers: Pay gains not keeping up with inflation

First published Nov. 3, 2008

The average Washington worker got a 3.7-percent pay raise to start 2008, according to newly released state pay data, which shows the average worker took home $899/week in the first quarter, or roughly $46,750/year.

Now, a 3.7-percent wage gain is nothing to sneeze at. But it represents a noticeable slow-down compared to average wage gains over the previous two years (4.1 percent between Q1 ‘06 and Q1 ‘07; 8.8 percent between Q1 ‘05 and Q1 ‘06). It also came at a time when inflation – specifically higher prices for food and fuel – was starting to climb toward 5 percent. So even with those gains, many Washington workers feel like they’ve lost ground, even as their pay goes up.

A few sectors seemed to be immune from the economic problems that were just starting to affect the state as this data was collected. For example, average pay in the information sector (i.e., software) continued to skyrocket, climbing 11.8 percent in the first quarter, to $1,846/week or roughly $96,000/year. And even as overall employment in construction started to tail off in the first quarter, construction worker pay grew by 5.9 percent, to an average of $908/week or about $47,000/year.

On the other hand, business managers saw their paychecks decline in the first quarter, likely as the result of smaller bonuses tied to weaker 2007 performances. Average manager pay dropped 5.8 percent, to $1,836/week, or about $95,500/year.

Consumer belt-tightening also seems to be reflected in falling pay for arts and entertainment workers, who saw average wages fall 5.5 percent, to $539/week or about $28,000/year. (The data, we should note, reflects average weekly pay and not necessarily full-time pay.) The combination of fuel price increases and the national economic slowdown was no doubt a factor in a 0.3-percent drop in pay for transportation and warehouse workers. Their pay slipped to $876/week, or roughly $45,500/year.

And pay for technical and scientific workers seems to have leveled off, going up only 1.8 percent, to an average of $1,308/week ($68,000/year) after showing double-digit gains for much of last year.

On a geographic basis, King County – which has more software and management jobs than anyone else – continued to have the highest average wages. Pay in the county climbed 4.1 percent to an average of $1,124/week or $58,400 a year.

However, rural counties saw some of the biggest average pay gains over the year:

• 7.2 percent in Ferry County, to $587/week, or $30,500/year.

• 7.1 percent in Klickitat County, to $637/week or $33,100/year.

• 6.5 percent in Grant County, to $616/week or $32,000/year.

Still, some places saw wages stagnate or fall. Lewis County paychecks were down on average 4 percent to $621/week; Wahkiakum County pay fell 1 percent to $503/week, and Snohomish County – home to tens of thousands of well-paid aerospace workers – reported pay slipping on average by 0.4 percent, to $895/week ($46,500/year).

By the Numbers: Job growth could be worse

First published Oct. 24, 2008

Washington’s economy continues to add jobs, but at an increasingly slower rate, according to the latest state employment report.

The report has two pieces of good news:

1. Our 0.9-percent job growth is better than the nationwide average (nationally, employment fell by 0.7 percent over the past year).
2. While we’re clearly slowing, we’re still doing better than we did during the post-9/11 recession, when total employment statewide fell for 20 months in a row.

Plus if you look close at all the data, you’ll see two very important numbers: 4,500 and 13,200. The first one’s the number of new software jobs created in Washington over the most-recent 12-month period, jobs that pay, on average, about $96,000 a year, according to another recently released state report. The second is the number of new jobs in education (both public and private) created in September, as the kids went back to school. Those jobs helped ease high unemployment rates in problem areas around the state.

So that’s the good news. There’s plenty of bad.

The credit crisis started in the housing sector, and the industries related to those continue to shed jobs. Construction, in particular, is tough, with employment falling by 10,400 jobs year-over-year. Employment in financial services is down by 1,600 people, and real estate fell by another 600. The rural parts of the state continue to be hit hard with cutbacks in wood products manufacturing (down by 2,000 or 10.5 percent), logging (down 500 people, or 9.8 percent) and paper manufacturing (down 1,000, or 9 percent). Auto dealers shed another 500 people, and boat builders 700 more – and this was before last week’s announcement that the Brunswick boat factory in Arlington is closing.

The report also doesn’t show the affects of the Machinists union strike against Boeing – apparently the workers were on the job long enough in September to be counted as regular employees. Take all 25,000 of them out of the employment picture and September’s employment growth looks much, much worse.

The numbers do highlight the divide between metro Seattle and the rest of the state. King County had a 4.6-percent jobless rate, added 36,900 jobs between September ‘07 and September ‘08, and got virtually all the state’s growth in those high-paying software jobs – the kinds of jobs that can drive a local economy, even if the national economy is weak.

Meanwhile, rural areas like Cowlitz County (which we discuss elsewhere this week) continue to lose workers. Nearly 31 percent of the wood manufacturing jobs there have gone away over the past year, along with about 15 percent of paper-making jobs. That’s dragging down the entire Cowlitz economy.

We’re already starting to see cuts in state government employment, as agencies start to deal with expected budget shortfalls. There are 1,100 fewer state workers, a drop of 0.8 percent. Local government employment, for now, is up 2.2 percent.

By the Numbers: Federal economic data shows a glass half-empty

First published Oct. 17, 2008

A recently released report of the gross domestic product of local areas contains a lot of good news for Washington. On balance, the data from the federal Bureau of Economic Analysis shows a pattern of strong growth in most of the state’s metro areas.

However, if you go inside the numbers, you will find a disconcerting insight: Much of the local GDP growth between 2001-06 was tied to big gains in construction, banking and real estate – all sectors hard-hid by the current credit crisis (which hadn’t yet started when this data was collected).

First the good news: most population centers around the state recorded economic growth at annualized rates of 5 to 10 percent. The biggest gainers over the 2001-06 period were the Mount Vernon-Anacortes metro area, and Bellingham, which both had gains of just over 50 percent. (To be precise: 50.6 and 50.5 percent, respectively.)

Wenatchee (46.7 percent) and Bremerton-Silverdale (40.3 percent) also recorded very strong growth for the period. And the state’s economic powerhouse – the Seattle-Tacoma-Bellevue metro area (which for federal statistical purposes includes all of King, Pierce and Snohomish counties) recorded more-than-solid growth of 27 percent.

The only metro area not showing at least 5 percent annual growth was Longview. I sometimes feel like I’m picking on Cowlitz County, but its five-year GDP gain of 17.8 percent was just a few points better than the inflation rate in Washington state (which was 13.8 percent over that period).

So that’s the good news. The bad news comes when you look at what triggered those growth rates. In just about every community, the growth was led by the same construction, banking and real estate industries that now are in decline. For example:

• In Olympia, the economic output of banks grew by 107 percent, and there was a 65-percent jump in construction.
• In Mount Vernon, banking output grew by 103 percent, and there was a 60-percent jump in construction.
• In Bremerton, banking output grew by 92 percent, and there was a 47-percent jump in construction.
• And while the gains were less extreme in the big market, the metro Puget Sound saw  45-percent gain in financial services, a 36-percent gain in construction and a 30-percent gain in real estate.

Not all of the growth was directly tied to these sectors. Bellingham and Mount Vernon both saw their manufacturing outputs roughly double thanks in large part, it would seem, to the increased value of gasoline and other products coming out of their refineries. Wenatchee and Yakima both saw big increases in the value of their farm products (ie., apples). Wenatchee’s fruit output more than doubled; Yakima’s was up 76 percent. Health care was a growth industry statewide, and the value of government services increased in most areas. (Not surprisingly, Olympia led the way with gains of 23 percent.)

But in nine of the 10 metro areas in the state (Longview being the exception) construction, real estate and finance/banking were among the fastest-expanding economic sectors, with growth rates greater than the rate of growth for those communities as a whole. Without a housing boom to continue fueling that growth, local economic output will slow – and in some cases, markedly so.

By the Numbers: Retailers already feeling the pinch

First published Oct. 13, 2008

Clear declines – that’s what the state’s latest report on taxable retail sales shows.

Retail activity fell 2.4 percent statewide during the second quarter of this year, compared to the same period last year, falling from $29.8 billion to $29.1 billion In all, 25 of the 39 counties registered declines, including the five largest: King (down 1.4 percent), Pierce (down 5.5 percent), Snohomish (down 4.7), Spokane (down 2.2) and Clark (down 3.4 percent).

Among the cities, Seattle (which by itself accounts for about 15 percent of the state’s total) had modest 3.3 percent growth. But in suburbia, there were some serious declines: Fife was down 24 percent, Camas fell 13.9 percent, Issaquah and Mount Vernon both fell 13.5 percent, Olympia was down by 11.4 percent and Kirkland dropped by 11.3 percent.

Bellevue – the state’s No. 2 retail center – saw a drop of 5.6 percent. Tukwila slipped by 0.8 percent. The remodeled Westfield SouthCenter Mall opened there during the third quarter – it’ll be interesting to see how those numbers compare.

It’s important to remember that a lot of factors can influence the numbers, particularly as you drill down to smaller geographic units. The opening of the Cabela’s store in Lacey last year, for example, had ripple effects in the Thurston County totals for months. And since food is excluded, that key consumer spending component isn’t counted. However, the numbers are a good gauge of economic activity within an area – and they’re an indicator of what kinds of dollars local governments have to work with this fall, as they try to work out 2009 budgets. As we’ve discussed before, revenue shortfalls are likely to lead to layoffs around the state.

Is anybody still growing? Yes. Among cities, Chehalis posted a 20-percent gain. Like last quarter, this certainly is the result of the reconstruction process following last year’s floods. Walla Walla had a strong 16-percent gain (much of that due seemingly to the opening of a Home Depot). Sunnyside saw a 13.3 percent gain, which seems to be linked to eight new stores that pushed sales in the sports and hobby category up 383 percent.

And as we note elsewhere, two-thirds of the Tri-Cities had gains (Pasco and Kennewick), as did Yakima (up 4.5 percent). Bremerton inched up 2.1 percent, even though Kitsap County as a whole fell a stark 8.1 percent. Looking at it from the county level, Yakima continued to prosper, with gains of 8.8 percent – the best among the state’s large counties. Pacific and Lewis counties also had double-digit gains (flood clean-up again).

The good news, if there is any, is that while Q2 2008 was down from the year before, total retail sales were still 5.4 percent greater than Q2 2006. So the story here is not like last week on the stock market, where we were hitting five-year lows. (In fact, we’re up about 27 percent for the past five years.)

Still, the declines are a bad sign. If you’re looking for early indicators of a statewide recession, this report has to go into that column.

By the Numbers: Regional banks, REITs offset broader stock losses

First published Oct. 6, 2008

Quick, which publicly traded Seattle financial services giant ceased to exist in September leaving a whole lot of smiling, happy shareholders in its wake? That would be Safeco. Liberty Mutual Group completed its $68.25-a-share purchase of Safeco on Sept. 22. The share price closed that day at $68.21, up 25 percent from its price on Jan. 2.

The example goes to show that even amidst some severe market turmoil, there are still companies doing well, and still stocks that make sense for investors. That seems particularly true here in Washington, where our self-styled CEO Washington Index* – which tracks the stock of 20 of the state’s largest companies – out-performed the Dow, the S&P 500 and the Nasdaq composites for the quarter, and year-to-date. Our index is down 13 percent for the year, but slipped only 0.4 percent in the third quarter on some strong performances.

WaMu, of course, wasn’t one of the success stories. The New York Stock Exchange suspended trading of WM shares on Sept. 29, after the forced sale of WaMu’s core banking assets to JPMorgan Chase. WaMu still exists – at least an empty shell of a holding company – and the stock is now trading over-the-counter. It ended September at 8 cents a share, a 99.6 percent decline from the start of the year.

The other stock showing a serious decline: Expedia. Its shares are down 50.5 percent so far this year, and it fell nearly 18 percent in the third quarter, as investors moved away from industries that rely on shaky consumer spending, despite some up-beat analysis.

So where did the money go? A lot of it went to timber stocks. Plum Creek shares had a strong 10.6 percent gain for the quarter, and Potlatch increased a more-modest 2.8 percent. What’s the attraction? Dividends. In a volatile stock market, the big dividend payments guaranteed by Plum Creek and Potlatch’s status as Real Estate Investment Trusts are more attractive than ever. Weyerhaeuser isn’t a REIT – but it announced in September that it could make the switch in 2009. That news sparked a $5-a-share jump in the price, and helped WY finish the third quarter up more than 18 percent (although it’s still down 15 percent for the year).

The biggest upward movers, however, were two regional banks: Everett-based Frontier, which was up 58 percent for the quarter, and Sterling Financial of Spokane, up a whopping 250 percent. Both banks, it seems, benefited strongly from the Security and Exchange Commission’s temporary ban on short-selling. Both stocks have been heavily shorted this year, with between 10 and 20 percent of their outstanding shares tied up by investors betting the stock price would fall. The short-selling ban was set to expire Oct. 2, but the SEC last week was considering extending it further.

One more interesting stock to watch – TruBlue Inc., the Tacoma-based parent company of Labor Ready. Savvy watchers of the economy look to temporary services firms like TBI as an indicator of a rebound in the economy, as employers coming out of a downturn will add a temp worker rather than risk hiring someone permanent. TruBlue shares are up 22 percent year-to-date. That says to me that investors are loading up on shares in anticipation the company will win big whenever the economy finally turns.

* Our CEO Washington Index is comprised of what were the 12 largest companies in the state in 2007: (MSFT, WM, SBUX, COST, WY, PCAR, AMZN, JWN, EXPD, PCL, SAF and EXPE); plus the eight largest companies from outside King County (PCH, STSA, IN, AVA, ITRI, FTBK, TBI, ZUMZ). With the demise of WM, and the sale of SAF, we’ll have to change the line-up for the fourth quarter report.

By the Numbers: FDIC report sheds new light on bank deposits

First published Sept. 29, 2008

We thought of it as “our” bank, but deposit figures show that in recent years, Washington Mutual had far outgrown its hometown roots.

WaMu’s explosive growth over the past five years was largely the result of expansion outside its home state, according to recently released market-share data from the Federal Deposit Insurance Corp. (Yup, the same agency that was so worried last week that WaMu would fail, draining its resources.) In fact, WaMu’s market share within Washington had been falling, from a peak of 19.9 percent in 2004 to a 12.3 percent share in the recently released June 2007 report.

Still, last week’s forced sale of WaMu to JPMorgan Chase will certainly change the state’s landscape, if for no other reason than WaMu’s 187 branches, equaled roughly one tenth of all bank branches statewide.

The deposit report has always been interesting (at least to me) but right now it’s more relevant than ever, given the current state of the banking industry. With the collapse of the investment banks, everyone still standing is now looking for deposits. The FDIC reports show where they are.

There’s been a significant inflow of money into the state’s banks over the most-recent five years for which reports are available. The total amount held by the state’s banks climbed more than 29 percent between 2003 and 2007, to a total of $105.7 billion. Bank of America was the state’s No. 1 bank through that period, with a steady 21 to 22 percent market share.

The data shows that some of the state’s regional banks have grown dramatically over that period. Spokane-based Sterling Savings essentially doubled its deposits, from $1.79 billion to $3.56 billion, as did Walla Walla-based Banner, which jumped from $1.39 billion in deposits to $2.74 billion.

Still, big national banks remained the dominant players. The top five since 2003 have been: Bank of America (22.4 percent), WaMu (12.3 percent), US Bank (7.8 percent), Key Bank (7.6 percent), and Wells Fargo (7 percent). The biggest change among the top five has been that WaMu and US Bank have both lost market share in recent years. As we noted, WaMu was much closer to BofA in 2004. Likewise, US Bank had consistently held about an 11 percent share until 2007, when it fell.

On the other hand, Wells Fargo gained share after buying out Pacific Northwest Bank in 2003. At the time, PNB was the state’s eighth-largest bank with a 2.1 percent market share, and Wells was fifth-largest with a 3.9 percent share.

In King County – home to about 40 percent of Washington’s wealth – Bank of America holds a commanding 34 percent market share. (WaMu was a distant second at 13 percent.) The next-largest homegrown bank is Washington Federal, with 3.3 percent.

But in Thurston County, the subject of this week’s Regional Report, two local banks – Venture and Heritage – are tops, with 18 and 10 percent shares respectively. WaMu, with only four branches, had a 7.6 percent market share.

By the Numbers: Credit crisis cost — 12,600 Washington jobs

First published Sept. 19, 2008

On Wall Street, the first casualties of the credit crisis were suffered a year ago in August, when Bear Sterns fired some 240 investment bankers linked to collapsing hedge funds. The fall of those hedge funds, which had sunk billions into the subprime mortgage market, triggered the crisis, which continues today on Wall Street, and is sending out ripples across Washington, from the Palouse to Puget Sound, as we see in last week’s August unemployment report.

The first place to look, obviously, is the financial services sector, where we’ve lost 1,900 banking and insurance jobs over the past 12 months, as the mortgage market dried up. That’s a drop of 1.4 percent from the workforce total in August 2007.

The job market in real estate also is flat, with 400 fewer workers there, a drop of 0.8 percent. And as demand for new homes has fallen, so has demand for construction workers. Employment in that sector has fallen by a whopping 6,400 people over the past year, or 2.9 percent. With fewer new houses being built, there’s less demand for lumber. As a result, the state’s wood products manufacturers have slashed 2,000 jobs, a drastic 10.8 percent decline. (Of those, 700 of the lost jobs specifically are at sawmills.) With less demand for lumber, there’s less demand for logs, so logging companies have cut 600 workers, which represents an 11.5 percent drop in employment in that industry.

It doesn’t stop there. The fact that fewer logs are getting milled into boards means that there are fewer chips to make into pulp and paper. That’s squeezing the paper industry across the state, which has responded by laying off 1,100 workers, a drop of 9.8 percent.

In response to the crisis, banks and other lenders have tightened credit standards, making it hard to get loans for big-ticket items. That – and high fuel prices – means less demand for boats, and the state’s manufacturers have slashed 400 jobs (a drop of 5.2 percent). It also makes it harder to qualify for auto loans, and car dealers have cut 600 jobs. (Obviously, fuel prices are a factor here too.)

With fewer people moving into new homes across the state, there’s less demand for furniture. Employment in that retail sector is down by 500, a drop of 4.1 percent. And with fewer people remodeling their new homes – or prepping older ones to sell – there are fewer DIY projects getting done. Employment in home improvement and garden stores thus has fallen by 700 people.

We could go on, but already we’re looking at some 12,600 lost Washington jobs over the past year, just in these sectors most-closely linked to the credit crisis. Those loses are particularly cruel in the southwest and northeast corners of the state, where the lumber, timber and paper industries represent key components of the employment base. Cowlitz County – which has shown signs of real weakness for months – recorded a 9.2 percent jobless rate in August, the worst in the state.

The good news was that the aerospace and software industries continued to expand through August, adding 9,500 jobs on a year-over-year basis – jobs that typically pay very well. But as everyone by now knows, the Machinists union at Boeing went on strike in Sept. 5. We’ll start to see the effect of that strike in the data when the state releases its next jobs update on Oct. 21. And if the Machinists strike hasn’t been settled by then, we’ll certainly be feeling its economic impact.

By the Numbers: Washington gas, diesel prices off peaks

First published Sept. 14, 2008

If you’ve been thinking that gas prices have been coming down – you’re right. The AAA Fuel Gauge report shows that gas prices around the state peaked in late June and early July, while diesel prices topped out a few weeks later.

Bellingham had the state’s most-expensive gas at the peak, just over $4.50 a gallon on June 21 – even though all the state’s refineries are in Whatcom and Skagit counties. Spokane had the cheapest gas, at about $4.19 on July 16. (Interesting note – prices across western Washington peaked about a month earlier than they did east of the Cascades.)

Last week, Spokane, Tacoma and Vancouver had the cheapest gas, with average prices in each city between $3.70 and $3.75. Most markets were reporting prices down 13 to 15 percent from their peaks – except the Tri-Cities, where they’ve only come down about 10.5 percent, even though the Tri-Cities are the fuel distribution hub for eastern Washington and Oregon.

For diesel, the average price in Bremerton topped out at $5.04 a gallon on July 14, while Yakima remained a relative “bargain” at just under $4.94. Since then, they’ve fallen about 12 percent around the state – except, again, in Bremerton, where they’re down 10 percent.

Still, gas prices today are 90 cents to a dollar above where they were a year ago, while diesel is up $1 to $1.40. (Hard to believe, but last September we were complaining about gas at $2.88 a gallon in central Puget Sound.)

What caused the price run up? The experts back in the other Washington can’t agree on how much the oil price strike was driven by speculators or even false reports. But whatever the cause, we can look at what the implications have been for this Washington.

Here in Puget Sound, we’re seeing signals of change in both real estate and transportation. In real estate, anecdotal evidence suggests people are seeking homes closer to where they work. And across the Sound, public transit ridership shot up over the summer. As gas prices slip, the impetus driving these trends will weaken – but I doubt it’ll go away completely. That’s something for those in real estate and retail to consider.

East of the mountains, different kinds of agriculture are affected in different ways. In the wheat country between Walla Walla and Spokane, high oil prices eat into profits both directly, through higher fuel costs, and indirectly, through higher costs for pesticides and fertilizers derived from petroleum. In the Central Washington orchard country, growers will have the added issue of dealing with workers less able to drive from orchard to orchard on last year’s wages. That could very well be putting upward pressure on wages.

In both cases, those are increased costs that farmers typically can’t pass on to consumers – they don’t control commodity pricing – which means even if harvests turn out strong, they’ll have less income to spend in town than they did during last year’s boom.

Gas at $4.50 a gallon seems to be over, but $3.50 gas may be with us a while. The challenge for business goes beyond adapting to survive, but anticipating ways to profit.

By the Numbers: Minimum wage, maximum volume

First published Sept. 7, 2008

Washington has the nation’s highest minimum wage. We know that, and it’s not hard to predict that we’ll hear more about it as the debate over Washington’s business competitiveness continues during this fall’s election season. A recent report by a state economist sheds light on just who is getting paid that $8.07-an-hour wage, and where.

Statewide, only 2.8 percent of all Washington workers are paid minimum wage. (A state count in second-quarter 2007 came up with a precisely tabulated 63,742 people.) There has been some wage compression as the minimum increased, according to state economist Scott Bailey. Back in the ’90s, minimum-wage workers accounted for between 0.5 and 1.5 percent of the workforce. The percentage began increasing in 2000, as the Legislature moved to increase the wage.

Not surprisingly, most of the jobs paying minimum wage are in three industry sectors: lodging and food service, agriculture and retail trade. More than 14,000 limited-service (ie., fast food) restaurant workers are paid minimum wage, which represents 29 percent of all fast-food workers statewide. Fast-food workers account for almost one-in-four of all minimum-wage paychecks across the state. Farm and forestry workers account for one-in-five, and retail store workers account for about one-in-six.

Conversely, only 1 percent of jobs in manufacturing or information (ie., software) pay the minimum.

Most minimum-wage workers are in rural counties. Bailey says that’s because food service, ag and retail make up a greater proportion of their employment bases. There’s a sharp Cascade divide – every single county in eastern Washington has a higher-than-average proportion of minimum-wage jobs. (Spokane County, where 3.3 percent of all jobs pay the minimum, is closest to the 2.8 percent state average; Okanogan County has proportionally the most minimum-wage jobs in the state – 14 percent.)

However, Bailey notes, rural counties with destination resorts – like Jefferson, San Juan and Skamania – have lower proportions of minimum-wage jobs. San Juan, in fact had only 24 minimum-wage jobs – 0.7 percent, the lowest proportion in the state.

Among the state’s largest counties, Yakima has the greatest proportion of minimum-wage jobs, which is not surprising given the high percentage of farm jobs there. As we’ve discussed before, Yakima has some of the lowest average wages in the entire nation (nation’s highest minimum wage not withstanding).

Finally, there’s a direct link between high housing costs and low levels of minimum-wage jobs. The three counties with the lowest proportions of minimum-wage jobs are San Juan, King and Snohomish, which are also the three counties with the highest median home prices.