11-6-2001
Where does this piece go?
Solving the economic development puzzle
By Zoltan Szigethy

Statistics can be dangerous to one’s mental health. Mindful of their numbing effect, we will only mention a few of them in this column. What’s more, they simply serve as clues to a larger puzzle that eventually reveals an effective economic development strategy for our peninsular community. If you are intrigued by crosswords, cryptography or companion planting, read on!

We’ve previously discussed the living wage. The following working definition is used in a June 2001 Northwest Job Gap Study by the Northwest Policy Center: a living wage is a wage that allows families to meet their basic needs without resorting to public assistance and provides them some ability to deal with emergencies and plan ahead. The same study claims that last year in Washington State this was an annual salary of $23,400 for a single adult, or $38,500 for a single adult with two children, and is somewhat higher this year.

Let’s just consider single adults. An overview reveals that only four out of five employed workers in our state receive income sufficient to provide a living wage needed by a single adult. A closer look shows that only three out of five available job openings pay at this minimal level. An even more detailed analysis shows that each job opening paying this minimal level attracts five job seekers.

These findings go a long way to explain our many families with two wage earners. Naturally, the ratio of applicants to available jobs leaps even higher as wages and benefits rise – and so it is no wonder that over two thousand people submitted applications at Nextel Communications in the span of three months this summer!

The industrial sectors that lead the way in Kitsap with living wage jobs are manufacturing, government, construction, transportation, communication and utilities, and the composite group called finance, insurance and real estate. The ones that lag are retail trade, other services, and agriculture, forestry and fishing.

This industry-by-industry breakdown has more discrete components that need to be understood by an organization such as our Kitsap Regional Economic Development Council so that we recruit employers who are likely to pay a living wages. We also need to understand the growth dynamics of these industries; for example, which one is likely to expand or contract in the next decade based upon market demand and technological change?

Furthermore, current conditions indicate that a relatively high fraction of jobs in the industrial sectors of transportation equipment and communications pay living wages, while a relatively small fraction do likewise in trucking and warehousing. This suggests that we recruit new primary job businesses to Kitsap falling into the those industries.

Such insights into industries hint at only part of the puzzle. It does little good to know whom to recruit if we do not have the proper labor force to support them. We must therefore encourage our educational partners to provide occupational skills that are more likely to attract living wages.

We know that managers, computer programmers, systems analysts, and registered nurses occupy positions that generally pay above a living wage, though they each require long or moderate term education. On the other hand, general utility workers, and hand packers or packagers earn much less, though they also require little education. This suggests that our public and private education and training institutions should vigorously provide learning opportunities for the former skill sets rather than the latter, so we can support the needs of recruited industries.

These two pieces of the puzzle, of course, still reveal only part of a full economic development strategy. Other pieces include relevant physical and social infrastructure, land use laws, building and land availability, and community commitment to provide opportunities for employment. They all play a part in the final picture.

All the same, unraveling the mysteries of whom to recruit and how to provide them an appropriate labor force are two of the key components of our working strategy. If you have suggestions , please reach us by e-mail via edckc@kitsapedc.org or get in touch via our website at www.kitsapedc.org. We’d love to hear from you.

(Editor’s Note: Zoltan Szigethy is Executive Director of the Kitsap Regional Economic Development Council. This is the seventh article in a series about the KREDC.).