Taryn Zard, Staff Writer
The overall economy of Washington is in a good position, with some of the lowest unemployment rates since 1969. According to Saint Martin’s University economics professor Andy Barenberg, Ph.D., the economy is doing pretty well, but there is always room for growth.
People are working and the economy has lots of jobs being filled, but wages are not increasing at the same rate as the cost of living. So, despite Seattle having so many great job opportunities, the cost of living, and limited housing opportunities, make it difficult to build a life in the state.
It is estimated that in order to live “comfortably” in Seattle, one would need an annual income of $72,092, while the current median household income is $67,365, showing that many people are underemployed. Underemployment refers to people who, though possessing a job, do not receive enough compensation to cover their monthly expenses.
Tacoma is starting to become much more like Seattle, with people moving there in hopes of finding a promising job—which is leading to a large increase of the total living cost of the city, an occurrence not uncommon in many other neighboring cities.
Moving out of city limits to find affordable housing comes with its own challenges. The cost of transportation and other expenses go up because a majority of Washington is lacking robust public transportation and infrastructure systems. Distance from a city then necessitates a car, insurance, and gas to get to work. The higher costs of living are one of the reasons why many people don’t feel like the economy is in a great spot, despite lower unemployment rates.
Unlike after the last big recession, where there was a fear of unemployment and large numbers of people who flat-out gave up looking for jobs, in recent years we have not seen such a trend in Washington.
There is definitely still slack in the job market, along with plenty of room to hire more people, but many businesses are struggling to find those willing to take a job for $13 or $15 an hour; which creates a strain on the economy.
If a business cannot find quality employees willing to work for a salary which was previously considered reasonable, that organization will struggle to stay in business because of their inability to pay the wages needed to meet the monthly cost of living. Such businesses are in a tough spot, since they are also unable to increase the price of their services, or else they risk losing customers.
On a positive note, the numbers of unemployment for those with disabilities and prison records have decreased, and there has been continuous growth in the number of jobs for those traditionally considered undesirable workers. Such changes to the job market are significant because employment is not solely about money, but also about making an impact on society.
Barenberg elaborated on this with a comment about how “there have been studies that show the loss of a job can have the same psychological impact as losing a loved one. There’s an emotional sense about it, not just financial.”
Although Washington looks pretty stable, many residents are still fearful of being unable to pay their bills. The reality is that wages just recently started going up, and they are not increasing at the same rate as the cost of living.
Dating back to 1979, the rate of wages has not increased at the same rate as productivity; this is especially true in coastal cities, where the cost of living continually increases faster than wages.
With such highly unaffordable living, people are getting locked out. Currently, there is no need to be worried about another recession, because the United States government has incredibly large deficits, and is spending far more than it is taxing. However, this can be a danger in and of itself, because if there were to be a recession, simply lowering the interest rates will not bring the country out of it, due to the fact that they are already incredibly low.
There is not much that can be done with the Federal Reserves, so the number one thing to look out for right now is whether or not the real wage increases to match how expensive living is.