Seattle sees boom times again, with qualifications
The Seattle-Bellevue-Everett region is benefiting from economic drivers specific to the Puget Sound region. But the growth rate in employment and income hasn’t matched previous eras of prosperity.
Special to The Seattle Times
A forebear of mine joined the Klondike Gold Rush, passing through Seattle and losing the treasured family Bible that contained births and deaths going back a century or more. He didn’t strike it rich, either.
So even though this is only my eighth summer here, I am not a complete stranger to the vicissitudes of this city’s booms and busts.
Still, I’ve also covered business in seven major metropolitan areas and I’ve never seen anything like the boom going on here now.
Perhaps it’s nothing new for old-timers. I recall reading a line in Fast Company during the dot-com boom, “The Seattle night is a mix of madness and money — the stuff that startups are made of.” It was written in 1997 but the feeling it expressed sounds contemporary.
On the other hand, many readers who are longtime Puget Sound-area residents keep asking me if we’re in a bubble.
An undeniable driver of this boom is the flood of international investment bidding up assets of all classes. Caused by central bank policies of low interest rates and easy money, it is chasing investments even though they often yield low returns.
Call it a “savings glut” if you wish. But it also faces a national economy that still lacks enough demand to create anywhere near full employment and the other Washington is unwilling to implement the policies to fix it.
Anecdotal evidence shows investors from China and India are among the speculators bidding up the price of even the homeliest old apartment complex here.
But we are also benefiting from economic drivers specific to the Puget Sound region.
One is Boeing, the source of so many historic ups and downs. Another is Amazon, the most prominent survivor of the dot-com bust. It’s all grown up now and still growing, the backbone of the South Lake Union transformation.
Microsoft, the engine of so much prosperity in the 1990s, remains the anchor of the software industry and seems to be pulling a turnaround.
Seattle is also a hot startup center, a biomedical power and the home of the Bill & Melinda Gates Foundation and a growing world-health cluster.
People are moving here, and they’re willing to pay the region’s relatively pricey housing costs. We’re blessed by our proximity to Asia, and exports are doing well this year.
We continue to attract very smart and talented people from everywhere. Seattle is benefiting from the “back to the city” movement by many millennials and empty-nest boomers.
No wonder payroll employment in the Seattle-Tacoma-Bellevue metropolitan statistical area grew 2.3 percent from May 2013 to this past May. The figure is 2.6 percent for the Seattle-Bellevue-Everett metro division.
This might seem modest, but in slow-growth America it stacks up very well against most major metros.
Employment in such fields as computer-systems design, information, software publishers and professional, scientific and professional services has hit records this year, better even than during the dot-com years.
There is a “but” ... more than one, in fact.
All those cranes on the skyline haven’t led to a major revival in construction jobs. Those stood at 18,800 in May for Seattle-Bellevue-Everett. Not only is it nearly 8,000 jobs less than the 2007 peak, but it is also lower than the number employed in 1990.
We have about 10,600 fewer jobs in finance and insurance compared with 2005, no doubt a consequence at least in part to losing Washington Mutual and an independent Safeco.
The 107,800 positions in food services and drinking places in May were a record. But these tend to be lower-paying jobs.
We are prosperous. In 2012, per capita personal income for Seattle-Tacoma-Bellevue was $53,328, a record in nominal dollars. For the nation, it was $28,051.
Still, the year-over-year growth was lower than previous peaks.
The same holds true for employment. In raw numbers, we’re at a record. But the growth is weaker than in previous cycles.
So call it a qualified boom. But aren’t they all, from the timber riches, rebuilding after the Great Seattle Fire and Klondike Gold Rush to the SST depression and the tech era when the night was full of madness and money.
Many of the players now seem to be taking a long view, and not only Jeff Bezos.
That would be good insulation against the next shock, whether it comes from a Federal Reserve misstep, busting of this asset bubble or a miscalculation between Chinese and Japanese fighter pilots over the East China Sea.
You may reach Jon Talton at firstname.lastname@example.org
About Jon Talton
Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest