Whatcom County unemployment rate rises slightly, but economists aren’t too concerned

The unemployment rate in Whatcom County has slowly increased over the past year, but it’s not raising much concern among economists.

The Whatcom County unemployment rate reached 5% in November, a 0.4% increase compared to November 2018, according to the Bureau of Labor Statistics (BLS). This comes as both Washington state and the U.S. saw their unemployment rates decrease – by 0.4% for the state and by 0.2% for the nation. November 2019 was the most recent BLS data available at press time.

Although Whatcom County has had a higher unemployment rate than Washington state since December 2018, the county has one of the lower unemployment rates in the state, said Anneliese Vance-Sherman, a regional labor economist with the Washington State Employment Security Department (WSESD). The state data for unemployment is skewed by the Seattle metropolitan counties, King and Snohomish, which have the state’s lowest unemployment rates.

“Our unemployment rate is higher than it is in Seattle, but that is not surprising in this business cycle,” said Hart Hodges, director at the Center for Economics and Business Research at Western Washington University.

Economic expansion following the 2008 recession has been the longest on record but the growth hasn’t been evenly distributed, Hodges said. Areas that are less urban and more rural have seen slower economic growth since the recession. According to Vance-Sherman, Whatcom County began seeing steady employment growth in 2012 and 2013, but within the past year that growth has slowed.

A healthy unemployment rate for Whatcom County is about 6% or below, Hodges said. However, the rate depends on what is happening to the economy in other places. Two to 3% above the natural unemployment rate of 3%, which takes into account transitions between jobs and changes in the economy, is considered healthy, Hodges said.

As of November, Whatcom County had gained 3,492 employees since November 2018, with a 3.6% increase in the labor force to 118,627 workers, according to WSESD.

“Industries that have done well in our area include manufacturing, including food manufacturing, and health care,” Hodges said. “Construction recovered after the recession, but never got back to the same share of total employment as we saw in 2005-06.”

Wage growth in Whatcom County has been modest for a long time, particularly in the lower half of the wage spectrum, Hodges said. The average weekly wage in Whatcom County was $946, according to the second quarter 2019 preliminary report from WSESD.

Manufacturing and construction have had strong wage growth, Hodges said, but wage growth in information and professional and business services has not kept pace with the same sectors in Seattle.

The recent statewide minimum-wage increase from $12 to $13.50 won’t have a large effect on Whatcom County, where most wages are already above the minimum, Vance-Sherman said. Rural counties with lower-wage industries like agriculture will be most affected by the new wage increase.

Acknowledging the effect of Western Washington University on Bellingham’s economy is important, as a larger job pool including college students affects the Whatcom County average, Vance-Sherman said.

“I think economic activity in our area is following the pattern of the broader economy,” Hodges said. “The labor market is strong and consumers are spending, so we have a positive starting point when thinking about the economy in the year ahead.”