Skagit County Trends Newsletter

COUNTY WAGES BELOW STATE - BOTH PER CAPITA AND IN TOP SECTORS -

Policy makers and business leaders must be able to accurately gauge the health and success of a city, county, state or region. There are different tools to use for this analysis. One of the common tools is the per capita personal income (PCPI) measure. PCPI is found by taking the total amount of personal (not business) income from all sources and dividing the sum by the total population. This result does not show income distribution, but only a broad average that is very useful at measuring general economic health. Comparing and contrasting PCPI with the top sectors paying the highest wages can inform local policy makers and business leaders about the sources of wage income and possible economic development strategies. It is difficult to gather a complete picture of a community from one indicator. For example, the top wage employing sectors does not take into account income gained from rent or investments and how they impact the finances of a household.

Dr. Anneliese Vance-Sherman, regional labor economist with the Washington State Employment Security Department, reflecting the Skagit County Trends data, noted that both PCPI and all components in the Top-5 sectors fall below the state benchmarks. She also notes that when comparing Skagit County employment, wage and income indicators with those of the state, it is important to consider the composition of the Washington State benchmark.

Dr. Vance-Sherman explained Skagit County's contribution to the statewide employment was approximately 1.5% in 2016. By comparison, nearly 41% of all jobs statewide were located in King County. Personal Income and wages in King County tend to be higher due to an industry mix that leans more heavily on high wage industries, pushing the statewide average up sufficiently to create the appearance that Skagit County lags significantly behind. But if King county is removed from the statewide snapshot, the average annual wage drops from about $59,000 to about $47,000-which is very similar to the average annual wage in Skagit County.

Looking at the PCPI indicator on the Trends site, we see a few distinct points of interest. 1990 saw the beginning of an upward trend for PCPI in the state compared to the national trend. Yet at this time,

PCPI in Skagit County begins to lose pace with both state and national trends. These developments make sense when we consider the impact of changing technologies and industry in the 1990s.

PCPI in Washington State diverged from the nation as a whole, in part, as a buildup of digital technology economic activity. Of course, many of these gains have been geographically concentrated in the Seattle metropolitan area. Skagit County, as a smaller metropolitan area than other counties in closer proximity to King County, did not see the same gains. Similarly to the question of wages and income above, King County skews the statewide numbers for both PCPI and wages in the highest paying sectors. Similar effects happen when comparing to a statewide benchmark, which includes rural, and both small and large metropolitan areas. Economic activity and people are increasingly concentrated in urban areas.

The Share of Wages in the Top-5 Sectors Paying the Most in Total Wages indicator shows the diversification of the top-5 sectors are not as prominent in the county as they are in the state. However, this is true of nearly all counties in Washington State.

During 2016, the share of wages in Skagit County claimed by the highest paying sectors were: government, followed by manufacturing, retail trade, construction, and healthcare / social assistance.

Compared to the state benchmark, government also claimed the most in total wages, followed by manufacturing, healthcare / social assistance, information, and professional / scientific/ tech services.

These economic indicators are vital tools for policy makers and business leaders. But without a broad understanding of how these numbers came to be, especially in relation to other indicators as well as the relationships developed with other regions of the state and nation, they are just numbers from which a host of conclusions might be made. Economists like Dr. Vance-Sherman help us to see the data for what they really are -- a representation of the real world and events that effect the people of Skagit County.


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