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Published May 2002

Jobless rate shrinks — but so does work force

By Mike Benbow
Herald Business Editor

Snohomish County’s unemployment situation posed a bit of a riddle in March: How can both the jobless rate and the number of people actually working fall at the same time?

First the facts, then some possible answers.

Unemployment in the county fell six-tenths of a percentage point in March, dropping from its nine-year high of 8.1 percent in February to 7.5 percent, the state Employment Security Department reported.

The drop was consistent with what happened for the state as a whole — Washington’s unemployment rate fell seven-tenths of a percentage point in March, from 8 percent to 7.3 percent.

You’d think such a dramatic drop would be a cause for celebration, but nobody’s scheduled a party. Officials say it’s much too early to talk about a turnaround in the economy.

“While the seasonal rate went down in Washington, our relatively weak job market suggests it was more the result of a temporarily shrinking labor force than an improvement in the labor market situation,” said Sylvia Mundy, who heads employment security.

“Some unemployed workers may have retreated to the sidelines to wait for the economy to recover, rather than actively seek work. In other words, they were neither counted in the labor force nor as unemployed. It is also possible that we are seeing some workers moving from the state to find employment,” she said.

That’s very likely what happened in Snohomish County, according to Donna Thompson, the area labor economist for employment security.

“The drop in the county rate was a result of an overall contraction in the labor force, which fell by a total of 3,000 people,” she said. “The good news is that the number of unemployed fell by 2,200, while the bad news is that the number of employed people fell by 800.”

Key reasons for the drop in employment were the 400 jobs eliminated in March by the Boeing Co. and related aircraft and parts businesses. During the past 12 months, the county has lost 3,200 aerospace jobs, a drop of nearly 11 percent.

And the cutbacks at Boeing continued last month, with more layoff notices delivered April 19.

Aerospace wasn’t the only industry hit by heavy cutbacks in March. Construction companies eliminated 800 jobs in that month. Some 1,800 construction jobs were eliminated during the past year, a cutback of 11.4 percent.

But it wasn’t all bad news.

Retail businesses added 300 jobs in March; local education rose by 200; and other industries also added workers, Thompson said.

The pluses and minuses add up to an estimated work force in the county of 340,700 people, including 315,100 who are working and 25,600 who are actively looking for work.

The lowest unemployment rate in the state was 2.4 percent in Whitman County. The highest was in Klickitat County, with 16.4 percent.

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