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Washington State economist takes a different view – King County skews state economic picture, Smith says

Economists and the media frequently lock onto two big fallacies in describing Washington state’s economy, a noted regional economist said Thursday.

The fallacies, said Gary Smith, are that there are vast differences between rural and urban Washington and between the east and west sides of the state.

Tom Sowa
Staff writer

http://www.spokesmanreview.com/news-story.asp?date=031204&ID=s1498409&cat=section.business

Smith, a regional economist for Washington State University, said the reality is that once populous King County and Seattle are thrown out of the picture, the differences aren’t large
at all.

The more serious concern, he said during a lecture to EWU economics students, is that Washington state — minus Seattle — lags the rest of the country in growth and per capita income.

“Over the last decade, that’s the most troubling trend, that without King County, Washington state is falling well behind the rest of the nation,” Smith said.

Smith has been tracking data on the regional economy for 23 years; he’s collected piles of information on state, county and national economic trends at his Northwest Income Indicators site (http://niip.wsu.edu).

From 1969 to 2001, the data show that King County’s per capita income grew to 112 percent of the national average. In that same period, all other Washington metropolitan areas, including Spokane, fell to 88 percent of the national average, he said.

Put another way, ranked by personal income, Washington is the 14th state out of 50 based on 2001 data. But take out King County, and the rest of Washington is the 38th state in the nation on that measure, Smith said.

His numbers show, in fact, that those gaps are growing even larger over time, rather than improving.

“This is not the kind of information you want to give to the chamber of commerce. It’s not uplifting news,” Smith said.

He defended the method and basis of his approach, and insisted that it’s a more accurate way of analyzing the state’s economy than relying on a division between urban and rural counties.

If people don’t try to look at what he calls “regional” indicators, then they end up with false notions of how well or poorly the state is faring, he added.

Smith doesn’t excuse himself from the party of economists who’ve failed to guard against the rural-vs.-urban viewpoint. “I’ve been a perpetrator. I’m not innocent entirely,” he said.

As an example, he cited a recent overview of Washington’s per capita income, published by state economists. That report, he noted, blithely reported that Washington “continued to generate the highest per capita income in the Northwest in 2002.”

The report focused on Puget Sound’s $29,036 per capita income in 2001, compared with $22,791 for East Side residents.

“My point is, just throw out King County and Seattle,” Smith said. “It does no good to include the one county that has 30 percent of the state’s total population.”

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