Spokane area manufacturing jobs at 1986 levels

Elimination of such jobs puts the region at risk of losing a key source of personal income

The economic downturn hammering Spokane County has eroded nearly 20 years of gains in the region’s manufacturing sector.

Tom Sowa
Staff writer

Despite steady population growth, the county now has about the same number of manufacturing jobs as it did in 1986.

Once one of the region’s chief creators of family-wage jobs, the manufacturing sector is populated now with battered survivors such as Telect Inc. and Kaiser Aluminum Corp., which has filed for bankruptcy.

Data released by the U.S. Department of Labor shows that Spokane County has 17,600 manufacturing jobs; 17 years ago it had 17,430.

The difference between now and then is that manufacturing jobs represent far less of the local work force than in the 1980s. The county now has 194,000 non-farm jobs. Manufacturing accounts for just 9 percent of that total.

In the 1980s, when Kaiser was prosperous and there were dozens of small companies making wood products and tools for the mining industry, manufacturing accounted for 13 percent of all non-farm jobs.

The elimination of manufacturing jobs puts the region at risk of losing a key source of personal income, economists said Wednesday.

Manufacturing jobs have a 3-1 multiplier effect, said David Bunting, an Eastern Washington University economics professor. Every manufacturing job in a community creates three more jobs, Bunting said.

From 1984 to 1986, Spokane County was in an economic slump that resulted in the loss of more than 1,000 manufacturing jobs. A large share of those losses occurred at Kaiser, which was downsizing in the face of weakened aluminum prices.

Then came an economic rebound. Kaiser held on and until 1999 managed to keep operating profitably.

Telect, which produces hardware for phone companies, started small in 1983, but grew into a 1,200-job powerhouse in Liberty Lake.

Today, both companies are much smaller.

"We rode the tech boom that was happening elsewhere," said retired banker and business consultant Phil Kuharski. Companies like Honeywell, Agilent Technologies and others kept growing, adding to the community’s payroll. Even when Kaiser workers were faced with a prolonged lockout in 1999 and 2000, Spokane’s manufacturing sector was still thriving.

"But when you have booms, you also have busts," said Randy Barcus, chief economist for Avista Corp.

"You look at the three manufacturing areas of metals, telecom and tech manufacturing," Barcus said, "and all three leaders here went through major difficulty."

Kaiser mothballed the Mead smelter, eliminating about 1,100 jobs. It cut another 400 jobs at the Trentwood rolling mill as operations there were reduced.

Telect shed more than 500 jobs in 2001 and 2002.

Agilent, at one time the largest tech manufacturer in the region, cut more than 600 production jobs in its circuit board assembly area.

The losses at those three heavyweights also impacted the region’s secondary manufacturers, who do business with the bigger companies, Barcus said.

The decline in Spokane County’s manufacturing sector isn’t unusual or unique, the economists said. The entire country has gradually lost manufacturing jobs.

In 1986, manufacturing accounted for 18 to 20 percent of all U.S. jobs. The number has now shrunk to about 13 percent nationwide.

The chief reasons are consolidation of jobs as worker productivity increases, and shifting jobs to lower-cost operations overseas.

The national decline presents a challenge for economic development groups in Spokane County that compete against other metropolitan areas, Barcus said.

"It becomes harder and harder to compete for manufacturing jobs across the country because those jobs overall are shrinking nationwide," Barcus said.

Therefore, it becomes more important, he said, for cities like Spokane to work harder at growing and supporting the manufacturing jobs they still have.

Despite the national and local decline, Kuharski said the region can increase its percentage of factory jobs above 10 percent.

"A community like Spokane can hope to bring it back to 10 or 10.5 percent," he said. It’s doubtful whether it will ever get higher than that again, he said.

What can offset the loss of good-paying manufacturing jobs are decent-wage service jobs, said Kuharski.

"Like the jobs created by the federal government to handle security at the airport. Those are jobs that bring in outside money and offset the losses," he said.

Over the long haul, Kuharski said, Spokane County and similar-sized metropolitan areas must accept the gradual decline facing them.

"The day will come when we will be down to just 2 or 3 percent of all jobs here coming from manufacturing. That’s part of the national transition taking place."

• Tom Sowa can be reached at (509) 459-5492 or by e-mail at [email protected].

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