12-7-2001
Who’s on top of the labor heap?
By Zoltan Szigethy, Executive Director, KREDC

Before we get to who’s on top, it would be useful to know the dimensions of the heap. After all, a molehill is a mountain to an ant, but not to a kangaroo. Kitsap County’s labor force — especially in the non-defense private sector — turns out to be modest. How large, then, is it?

New reports pinpoint the dramatic scale of our worsening national economy and its effect in Kitsap County. The Washington State Employment Security Department says our labor force declined from January through September of 2001 from 94,700 to 88,200, and we had a commensurate drop of employed individuals from 89,700 to 83,300. Think of it: we lost over 6,000 jobs in nine months! That’s not a happy trend.

Much of the decline is probably attributable to the bursting high tech bubble, though some of it comes from the loss of work at Boeing, other downsizing exporters, the ripple effect of our national tragedy on Sept. 11, as well as from the decrease in service jobs tied to export-oriented primary jobs.

In October our labor force inched back to 90,300 and employment rose to 84,700. We probably have our civilian support to the national defense to thank, but while this is helpful to our local economy, it is not the most desirable way to prime our economic pump. Even so, this left about 5,600 among the ranks of the unemployed.

It is in this fluctuating economic environment that the Kitsap Regional Economic Development undertook a laborious telephone survey in September to identify the county’s top employers and to estimate the number of people employed in primary jobs — that is, in jobs bringing new wealth into the county because their goods and services are sold to clients outside the county.

We canvassed private and public sector employers with ten or more employees for their full time equivalent employee count, and we also asked them to estimate the percent of their gross revenues derived from exports. Correlating these two pieces of information enabled us to estimate the number of primary jobs.

The results are instructive, but inconclusive. We pinpointed about 44,000 full time equivalent jobs — which translate into more workers than that, since some of them work part-time — but were not able to rigorously close the analytic gap between these 44,000 and the 88,200 mentioned in the overall September labor force.
True, of 44,200 in the gap, 4,900 were reported to be unemployed. Another 18,000 are generally thought to be residents who commute out of the county to their jobs. That leaves 21,300. They may be undercounted commuters, part time workers, workers in establishments with less than ten employees, or home-based sole proprietors.

Our findings about the 44,000 identified full time equivalent jobs are worth closer scrutiny. Half of these jobs – some 22,000 – are primary jobs in the defense industry. The principal workplaces, in decreasing order of size, are the Naval Submarine Base Bangor, the Puget Sound Naval Shipyard, the Naval Undersea Warfare Center, Naval Station Bremerton, the Naval Hospital, and the Fleet Industrial Supply Center.

Less than a quarter – some 9,160 – are essentially secondary jobs in state, county, city and school district public agencies; that is, they provide services to our local population and are supported by revenues generated from us in the form of taxes or fees. Were it not for primary job incomes, these public and other private sector secondary jobs could not exist. The largest of these public agencies is Kitsap County, followed closely by the South Kitsap School District.

More than a quarter of these jobs – some 13,000 – fall within the private sector, with 4,100 being primary jobs and the remainder secondary service jobs. Civilian defense contractors play a significant part in this list of employers, though Nextel Communications Inc., with its new facility and over 400 employees as of September, is a significant entry and jumps to be the second-largest private sector provider of primary jobs.

Were we to rank private sector companies by absolute size, the list would be Harrison Memorial Hospital, Johnson Controls World Service, Fred Meyer Groceries, Nextel Communications, BAE Systems (formerly Tracer), Laurier Enterprises (McDonald’s), Albertsons, Central Market & Poulsbo Market Place, Wal-Mart Bremerton, and American Systems Engineering Corporation. They range from 1,275 full time equivalent employees down to 268, and are the top ten of just over one hundred private sector companies we canvassed.

However, when ranked by the number of primary jobs, the order changes to Johnson Controls World Service, Nextel Communications, BAE (formerly Tracer), Raytheon Systems, American Systems Engineering Corporation, Lockheed Martin, Seattle Orthopedic Group, Electronic Data Systems Corporation, Sage Manufacturing, and then Harrison Memorial Hospital.

Notice that the retailers drop out, and the hospital is ranked lower because only a fraction of its service is to clients outside the county. These counts range from 800 full time equivalent employees down to 128, but while this is again a top ten list, it is from just over fifty private sector companies that provide primary jobs.

It is well to recall that our commuters also hold down primary jobs, in that their income derives from sources outside the county – yet the quality of their community involvement in Kitsap would be enhanced by having the chance to both live and work in the county. It is likely that their private family lives would also benefit.

Thus, apart from the salutary economic impacts of recruiting and retaining primary employers, the KREDC’s work has tangible social and personal benefits that are at least as difficult to measure as the gap between our 44,000 identified jobs and the reported September labor force of 88,200. Both measurements are worth the effort – and we therefore have a few proverbial heaps yet to scale.