By Dr. Patrick Jones
Has the job creating machine of the greater Tri Cities thrown a wrench? While one year a trend does not make, last year’s results were anything but stellar, as this indicator reveals. The year ended with only a bit more than 1,600 jobs created over 2023. This was the lowest yearly gain registered since 2013, outside of pandemic year 2020.
For further context, the three-year average job gain preceding 2024 was nearly double, at 3,184 net jobs created. The five-year average for those years preceding 2020 was a bit lower, but at nearly 3,000, much higher than in 2024.
It’s helpful to keep in mind the longer-range picture. Unlike other eastern Washington metro areas, the rate of net job creation in the two counties has matched strides with the state average since 2015, and in some years outpaced them. What then lies behind the deceleration in 2024?
A dive into the sectoral detail provides some answers. In the scheme of the data source, ultimately the U.S. Bureau of Labor Statistics (BLS), there are 20 sectors, each composed of various industries. Consider a few of them.
In Benton County, three of the largest sectors experienced declines in net jobs last year. They were agriculture, at -794; accommodation & food services, at -460; and retail trade, at -333. Overall, the county chalked up a gain of 999 jobs. Healthcare & social assistance, professional, scientific & technical services, and local government (including school districts) were the drivers of the overall gain.
With a much smaller number employed, Franklin County experienced declines in its largest sectors as well: agriculture, at -260; healthcare & social assistance, at -117; and manufacturing, at -102. Overall, the county experienced a gain of 730 net jobs. Transportation and warehousing accounted for most of them.
Note that this measure is a net number. That is, it provides a balance of jobs created and jobs eliminated. Ideally, we would like to focus on only the first component, creation. All interested parties – elected officials, economic development professionals, labor representatives – want to see their local economy strong enough to provide lots of new jobs every year.
However, data don’t permit this at a local level. So, a net number is the only way to understand job creation.
And what about the near future? The level of uncertainty, largely from federal policy changes, is high with several key, local sectors. This backdrop makes forecasting more treacherous than ever. But we can look at the present and hypothesize about how the current dynamics will play out over the next 16 months.
Specifically, the current difficulties of the agricultural sector holding on to immigrant labor are well-known throughout eastern Washington. This seems unlikely to change. Further, the uncertainty about funding levels for PNNL at the time of this writing remains high; any reduction in force at the Lab will impact the professional, scientific & technical services sector. And not to forget - pending changes in federal coverage of Medicaid could dampen, at a minimum, employment growth in the healthcare sector – the strongest growing recently of all the major sectors.
2025 could well see a year-end outcome of very little job growth. Pending federal policy changes will likely not completely take effect in the next four months. Consequently, 2026 could continue any downsizing of the overall workforce.
Current monthly aggregate employment data for the greater Tri Cities support a thesis of slowing growth. For the first half of the year, BLS reports that a mere 135 new jobs were observed. This represents an increase of only 0.1% over the same period last year.
And in the two most recent months (May and June), overall job growth has been negative. Brace yourselves!