1. Yakima County Economic Update
For: Yakima City Council Economic Development Committee
By: Donald W. Meseck, Regional Labor Economist, Washington State Employment Security Department
Date: October 26, 2017
My name is Don Meseck, Regional Labor Economist, assigned to the Workforce Information and Technology Services (WITS) Division of the Washington State Employment Security Department.
I provide economic analysis services and Labor Market Information (LMI) for a seven-county area in Washington State. Some of our major clients are: WorkSource offices, the North and South Central Washington Workforce Development Councils, economic development councils, chambers of commerce, ports, public and private sector schools, elected officials, the media, Rotary and Kiwanis clubs, banks, realtors, other businesses, etc. primarily in Adams, Chelan, Douglas, Grant, Kittitas, Okanogan, and Yakima counties.

2. Today’s presentation
Quarterly Census of Employment and Wage (QCEW) summaries for Yakima County in 2016
Slides 3-9
Civilian Labor Force (CLF) and unemployment rate trends, January 2005 through September 2017
Slides 10-13
Nonfarm employment trends in WA and in Yakima County, January 2005 through September 2017
Slides 14-20
Summary and questions
Slides 21-22
In Slides 3-9, will discuss employment and wage trends, as of 2016, for Yakima County’s 22 industries/sectors. Out of these 22 industries, five provided the most jobs and largest payrolls in Yakima County in the most recent year for which we have detailed annual average employment and wage data. Please note that preliminary annual average total covered employment and wage data for 2016 only became available as of June 2017, and revised data became available as of September 2017.
In Slides 10-13, I will summarize average annual unemployment and labor force trends from in Yakima County plus year-over-year changes in monthly data up through and including September Civilian Labor Force (CLF) data from the BLS’ Labor Area and Unemployment (LAUS) program were used to provide much of this analysis.
In Slides 14-20, will provide an overview of nonfarm employment trends in Yakima County, highlighting trends between 2015 and 2016 for several major industries/sectors. Will also briefly discuss year-over-year changes in monthly data up through and including September Estimates for Yakima County and Washington State were obtained from the Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) program.
The presentation summary and Point of Contact (POC) information are shown in Slides 21 and 22.

3. Analyzed county-level QCEW data for 22 industries/sectors
19 private-industry sectors
Three government sectors
NAICS 11 (Agriculture, forestry and fishing)
Federal government
NAICS 21 (Mining)
State government
NAICS 22 (Utilities)
Local government
NAICS 23 (Construction)
NAICS (Manufacturing)
* North American Industry Classification System (NAICS)
NAICS 42 (Wholesale trade)
NAICS (Retail trade)
NAICS (Transportation and warehousing)
NAICS 51 (Information)
NAICS 52 (Finance and insurance)
NAICS 53 (Real estate and rentals)
NAICS 54 (Professional and business services)
NAICS 55 (Management of companies)
NAICS 56 (Administrative and waste services)
NAICS 61 (Private education services)
NAICS 62 (Health services)
NAICS 71 (Arts, entertainment and recreation)
NAICS 72 (Accommodation and food services)
QCEW is the Quarterly Census of Employment and Wages, a
NAICS 81 (Other services)
U.S. Bureau of Labor Statistics data set.
The North American Industry Classification System (NAICS) is an industry classification system that groups businesses/organizations into categories or sectors based on the activities in which they are primarily engaged.
For this briefing, the most recent average annual covered employment and wage figures (for 2016) were analyzed using Washington State Employment Security Department’s Quarterly Census of Employment and Wage (QCEW) data for Yakima County, primarily at the 2-digit NAICS code level.

4. Yakima County: Total covered employment from 2004-2016
The National Bureau of Economic Research (NBER) announced that the national recession occurred from December 2007-June But, the effects of this recession hit Yakima County’s labor market primarily in 2009 and You can see that the “valley” of our local recession here in Yakima County occurred in Please keep in mind that these total covered employment and wage data, include nonagricultural and agricultural employers.
Total covered employment rose from 108,833 jobs in 2015 to 111,531 in 2016, as shown in this graph. This was a 2,698-job and a 2.5-percent upturn during 2016.
Between 2015 and 2016 agricultural employers added 1,169 jobs (i.e., in NAICS 11) up 3.9 percent. Specifically, ag rose from 30,191 jobs in 2015 to an average of 31,360 in Hence, 43.3 percent of this annual average upturn in total covered employment in Yakima County during 2016 was attributed to one industry – agriculture.
If we compare long-term changes in agricultural employment versus total covered employment from , we note that total covered employment rose from 93,988 in 2004 to 111,531 in 2016, a 17,543 job and 18.7 percent upturn. Agricultural employment grew from 20,057 in 2004 to 33,360 in 2016, a 11,303 job and 56.4 percent uptrend. In 2004 Yakima County’s agricultural industry accounted for 21.3 percent of total covered employment, but by 2016 agriculture provided 28.1 percent of total covered employment countywide.
Source: QCEW Data

5. Yakima County: Top 5 industries by employment in 2016
This slide and the next slide (“Top 5 Industries by Percent of Total Wages”) rank Yakima County’s top industries in terms of jobs and wages provided in the 22 major industries/sectors, mentioned earlier.
In 2016, QCEW data showed that Yakima County’s labor market provided 111,531 jobs. Over 70 percent of all local jobs were in five (i.e., agriculture, health services, local government, retail trade, and manufacturing) two-digit NAICS industries or sectors. Hence, for a Metropolitan Statistical Area (MSA), Yakima County is not a very diverse economy. In fact, this situation holds true for many counties here in Central Washington.
Source: QCEW Data

6. Yakima County: Top 5 industries by wages in 2016
In 2016, QCEW data showed that Yakima County’s labor market provided nearly $4.09 billion in wages.
Over two-thirds of all wage income countywide was earned in just five industries: agriculture, health services, local government, manufacturing, and retail trade.
Source: QCEW Data

7. Yakima County in 2016: Summary of “Top 5” industries (ranked by % of jobs)
Total covered wages = $4.09 billion
Average annual employment = 111,531
Average annual wage = $36,665 (62.0 percent of Washington State’s average annual wage of $59,090)
Industry
Percent of jobs
(in Yakima County)
Percent of wages
Agriculture
28.1
21.8
Health services
13.7
16.2
Local government
12.0
14.3
Retail trade
9.6
7.6
Manufacturing
7.5
9.2
This slide summarizes the differences between the industries that provided the most jobs in the Yakima County economy in 2016, and the industries that pumped the most money (via wages/payrolls) into that economy. Specifically:
Agriculture provided 28.1 percent of all jobs countywide, but supplied only 21.8 percent of total wage income. Why? Many jobs in agriculture are seasonal.
Conversely, private health services tallied 13.7 percent of total covered employment , but accounted for 16.2 percent of total wage income – indicating it is a relatively “good paying” industry.
The local retail trade sector accounted for nearly one in ten jobs countywide, but provided only 7.6 percent of total wage income.
Conversely, manufacturing supplied only 7.5 percent of all jobs in Yakima County but 9.2 percent of total wages/payroll. Almost one in every ten dollars of wage income countywide is earned at a local manufacturing firm. (Note: the manufacturing sector includes the “food processing” subsector.)

8. Yakima County: Agricultural and Total covered employment from 2004-2016
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Agriculture, Forestry, and Fishing
20,057
20,913
21,651
22,051
23,589
24,659
23,825
25,073
27,029
27,044
29,331
30,191
31,360
Total Covered Employment
93,988
95,251
98,298
99,135
101,084
100,894
99,953
101,249
102,748
103,585
106,613
108,833
111,531
Percent of Jobs in Agriculture, Forestry, and Fishing
21.3%
22.0%
22.2%
23.3%
24.4%
23.8%
24.8%
26.3%
26.1%
27.5%
27.7%
28.1%
Total covered employment rose from 93,988 in 2004 to 111,531 in 2016, a 17,543 job and 18.7 percent upturn.
The number of agricultural jobs (a subset of total covered employment) increased from 20,057 in 2004 to 31,360 in 2016, an 11,303 job and 56.4 percent uptrend.
Another point illustrating the importance of agriculture to Yakima County’s labor market: Agriculture netted 1,169 new jobs in 2016 while total nonfarm employment provided 2,698; hence, 43.3 percent of all jobs (i.e., total covered jobs) added to the local economy last year were in “agriculture.”

9. Agriculture has been growing in “importance” in the Yakima County economy in the past 10-15 years
This slide illustrates agricultural employment, as a percent of total covered employment. (These data were taken from the preceding slide.)
In 2004 Yakima County’s agricultural industry accounted for 21.3 percent of total covered employment. In 2016 agricultural employment accounted for 28.1 percent of total covered employment countywide. Hence, the agricultural share of employment rose 6.8 percentage points (from 21.3 to 28.1 percent) in Yakima County during this twelve-year period (or 13 years, inclusive).

10. Annual Average Unemployment Rates in Yakima County and in Washington from 2005-2016
Note the difference in the magnitude of the rates, in both areas, from , and from
In Yakima County for example, unemployment rates were in 7-percent range from For the past eight years however (from ) not seasonally adjusted rates have lingered in the 8-10 percent range.
Preliminary estimates indicate that the unemployment rate edged downwards one-tenth of a point in Why? Although the number of residents in the Civilian Labor Force (CLF) grew 3.3 percent between 2015 and 2016 (good news); the number of unemployed residents grew at a 1.7-percent clip in 2016 (bad news). The local unemployment rate has been moving in the right direction (i.e., downward) for five consecutive years ( , inclusive).
Annual average unemployment rates for Washington have steadily decreased in each of the past six years (i.e., from , inclusive) and by 2015 and 2016 were back to the pre-recession levels of 4-5 percent (experienced from ).

11. Unemployment Rates in Yakima County: From January 2015-September 2017
In Yakima County, the not seasonally adjusted average annual unemployment rate edged downwards only one-tenth of a percentage point between 2015 and 2016, from 8.1 to 8.0 percent.
However, the unemployment rate dropped sharply from 5.7 percent in September 2016 to 4.5 percent in September 2017, a substantial one and two-tenth points contraction as the number of residents entering the labor force increased modestly while the number of unemployed plummeted (see Slide 12) – a step in the right direction for the local economy. But, let’s look a little deeper at the labor force numbers.
Monthly unemployment rates have been registering year-over-year declines for twelve consecutive months (October 2016 through September 2017) – good news for the local economy.

12. Yakima County’s Civilian Labor Force: From September 2016-September 2017
The most current, monthly snapshot of the local labor market shows that Yakima County’s Civilian Labor Force (CLF) grew by 2.6 percent between the Septembers of 2016 and 2017, from 132,878 to 136,361 residents, equating to 3,483 more residents in the labor force this September. Simultaneously, the number of unemployed residents decreased dramatically, by 19.1 percent and by 1,439 residents, to 6,090 in September 2017 from 7,529 in September 2016.
Hence, the good economic news this September is that, year over year, Yakima County’s unemployment rate dropped substantially from 5.7 percent in September 2016 to 4.5 percent in September This September’s unemployment rate is the lowest reading in Yakima County for the month of September since electronic records were implemented in 1990 – 27 years ago.

13. Labor Force Changes in Yakima County and Washington in the last twelve months
Yakima County’s CLF increased by 4,061 residents (up 3.3 percent) between 2015 (121,733 residents) and 2016 (125,794 residents). The county’s labor force has expanded for the past 22 months, growing 2.6 percent between the Septembers of 2016 and 2017.
Washington's Civilian Labor Force (CLF) expanded by 98,209 residents (a 2.8 percent upturn) from 2015 to The state’s labor force has increased, year over year, for the past 44 months (February 2014 through September 2017). In September 2017, Washington’s CLF tallied 3,774,386 residents versus 3,666,453 in September 2016 equating to 107,933 more Washingtonians in the labor force (up 2.9 percent).

14. Yakima County: Total nonfarm employment from 2005-2016
The National Bureau of Economic Research (NBER) announced that the national recession occurred from December 2007 through June But, the effects of the recession hit Yakima County’s nonfarm labor market heavily in 2009, 2010, and again in Please note: nonfarm employment data do not count agricultural jobs. Nonfarm figures are derived from Current Employment Statistics (CES) data/estimates (i.e., from CES quarterly benchmarked data, not seasonally adjusted) at the county, state, and national levels.
The “pre-recession” peak for nonfarm employment was in 2008 when the local economy provided 79,600 jobs. Then the recession hit and it took seven years, until 2015, for the Yakima County economy to regain (and slightly exceed) this level of employment. In 2015 nonfarm employment averaged 81,400. The “valley” of our local recession here in Yakima County occurred in 2012, when nonfarm employment averaged just 77,500.
An important takeaway: the recent recession hit the local nonfarm market harder than the total covered employment job market. It took seven years (from ) for the nonfarm economy to regain the number of jobs lost; but it took only three years (from ), as shown in Slide 4, for total covered employment (which includes agricultural jobs) to bounce back to the pre-recession peak.
Source: CES Data, LMPA, ESD

15. Yakima County and Washington: Nonfarm employment changes during the past 20 completed quarters
The blue bars in this graph depict over-the-year employment changes in Washington State, while the orange bars depict over-the-year employment changes in Yakima County. This slide I think is one of the most interesting in this presentation because it helps illustrate a generalization about the Yakima County economy that: “In good economic years, we lag the state; but in bad years, we lead the State.”
According to the National Bureau of Economic Research (NBER), the recent US recession occurred from December 2007 through June Washington's labor market shrank faster than the local labor market during this recession. In 2009, Washington’s economy lost 4.4 percent of its nonfarm jobs where as Yakima County’s economy shrank by 1.9 percent. Since then please note that:
The Washington State economy has posted year-over-year growth for the past 28 quarters (since the 4th Quarter of 2010).
Yakima County has added nonfarm jobs for 19 consecutive quarters (since the 1st Quarter of 2013).
Quarterly job growth rates in Yakima County have only exceeded statewide job growth rates in two of these past 20 quarters - in the 1st and 3rd Quarters of 2015.

16. Yakima County and Washington: Nonfarm employment changes during the last 12 years (2005-2016)
This slide (plotting average annual nonfarm changes for the past 12 years in Yakima County and Washington) is similar to the previous slide (illustrating quarterly nonfarm changes for the past 20 calendar quarters). It also helps to substantiate the generalization about the Yakima County economy that: “In good economic years, we lag the state; but in bad years, we lead the State.” This graph just takes a longer-term look at nonfarm job growth (12 years of data are graphed here versus 5 years in Slide 15).
The blue bars depict over-the-year employment changes in Washington State, while the orange bars depict over-the-year employment changes in Yakima County. Note that:
Washington’s nonfarm economy lost jobs more rapidly than Yakima during the recession in 2009 and 2010.
In each of the past six years since the recession however, local nonfarm job growth has lagged the growth pace statewide (i.e., from , inclusive).
In 2016, the number of nonfarm jobs in Yakima increased 2.2 percent versus 3.1 percent in Washington State.

17. Nonfarm employment changes in Yakima County and Washington in the last twelve months
The Yakima County nonfarm labor market added 1,800 jobs between 2015 and 2016, an average annual increase of 2.2 percent. Year over year, Yakima County’s nonfarm labor market has been growing for the past 58 months (December 2012 through September 2017). The local nonfarm market provided 85,800 jobs in September 2017 versus 84,800 in the corresponding month in 2016, a modest 1,000 job and 1.2 percent upturn.
In the last twelve months, total nonfarm employment in Yakima County has generally expanded less rapidly than across Washington. Only in two of these twelve months (in May 2017 and in July 2017) has the local job growth pace surpassed statewide growth rates. It should be noted however that CLF growth rates in Yakima County have generally been more robust that growth rates across Washington during this timeframe (as shown in Slide13). This indicates that agricultural employment in Yakima County has likely been faring relatively well compared with nonfarm employment growth during the past twelve months.
Between 2015 and 2016, Washington's labor market provided 96,600 new nonfarm jobs, an annual average increase of 3.1 percent. This September, businesses and government organizations across Washington supplied 3,356,800 nonfarm jobs (not seasonally adjusted), compared to 3,280,700 jobs in September 2016, a 2.3 percent year over year employment increase. The state’s economy has posted year over year nonfarm employment increases for the past 84 consecutive months (October 2010 through September 2017).

18. Yakima County - Nonfarm job growth in major industries from 2015 to 2016
The 83,200 jobs provided across Yakima County in 2016 was a 1,800-job and percent upturn over the 81,400 jobs tallied in 2015.
Since this table is a little hard to read, I graphed annual average gains and losses during 2016 for eight of Yakima County’s major industries in the chart on the next two slides. . .

19. Summary of job gains/losses (in #) in Yakima County nonfarm industries from 2015 to 2016
This figure summarizes annual average nonfarm employment changes in Yakima County between 2015 and 2016:
Within the manufacturing sector, durable goods provided about 100 new jobs in while nondurable goods (primarily food processing) tallied approximately the same number of jobs last year as in 2015 (see Slide 18).
Three local industries netted 300 or more jobs last year: retail trade, professional and business services, and health care.
Three other local industries netted between 200 and 300 more jobs in 2016: construction, leisure and hospitality (primarily hotels and restaurants), and local government (which includes public school districts, police and fire departments, county and city administration, and tribal employment).
Wholesale trade (which includes firms engaged in the wholesale trade of durable goods and non-durable goods such as fresh-fruit packinghouses) and transportation and private utilities (not shown in this table because it is not one of the Top 8 job-providing industries) each averaged job losses during 2016 of less than 100.

20. Summary of job gains/losses (in %) in Yakima County nonfarm industries from 2015 to 2016
This graph is similar to the preceding graph, except that it depicts annual average employment changes during 2016, for these eight key sectors/industries, on a percentage basis. Two industries/sectors experienced rather robust job growth by lengthening their employment rosters by more than six percent between calendar years 2015 and 2016.
Professional and business services netted 7.9 percent more jobs in 2016 than in This employment category consists of a diverse set of niche industries, ranging from computer systems design and accounting/tax preparation services to landscaping and janitorial services, legal services and temporary employment services. In short, professional and business services is the umbrella industry of businesses that support other businesses.
Construction had a good year in 2016 as well, providing 6.5 percent more jobs in 2016 versus 2015.

21. Agriculture continues to be a pillar of the local economy, while nonfarm job growth “plugs along – slowly and steadily”
Yakima County’s unemployment rate dipped from 8.1 in 2015 to 8.0 percent in But, monthly rates have fallen for the past twelve consecutive months.
Yakima County’s Civilian Labor Force (CLF) grew from 121,733 residents in 2015 to 125,794 in 2016, up 3.3 percent. WA’s CLF grew at a 2.8 percent clip.
Nonfarm employment averaged 83,200 in 2016, up 1,800 jobs and 2.2 percent since (WA’s nonfarm growth was 3.1 percent.) Three local industries netted 300 or more jobs last year: retail trade, professional and business services, and health care.
(Self explanatory)

22. “Yakima County Economic Update” Questions?
Donald W. Meseck
Regional Labor Economist for Adams, Chelan, Douglas, Grant, Kittitas, Okanogan, and Yakima Counties
Labor Market and Performance Analysis (LMPA)
Employment Security Department
Address: 1205 Ahtanum Ridge Drive, Union Gap, WA 98903
Phone: (509)
Website:
Would like to express my appreciation to Sean Hawkins (Economic Development Manager, City of Yakima) for asking me to conduct this briefing today.
Are there any questions?