— by Matthew Gilbert, Orcas Issues reporter —
On December 5, the San Juan County Economic Development Council (SJCEDC)hosted its second annual “Datapalooza” to present the latest figures and projections on the county’s economic health and future .Joining Victoria Compton (director of the SJCEDC) in the two-hour workshop, titled “Growing a Strong Community with You,” was James McCafferty, director of WWU’s Center for Economic & Business Research, and Dr. Anneliese Vance-Sherman, regional labor economist for the State of Washington.
Compton began by providing a snapshot of the County’s economic profile. We continue to lag far behind other regional counties as well as the State in “average wage income”: $33,890 in 2016, a dispiriting.09% gain from 2012 that’s “not even keeping up with inflation,”she stated. At the same time, a family needs an income of $80,000 to afford to buy a home and still have money left over for savings. Doing the math, the county remains an exquisitely lovely place to go broke.
On the upside, manufacturing and construction jobs have been on the rise, though Compton noted that the County needs to keep targeting high-income industries and train more people because “there are $50– 70k jobs that aren’t getting filled.” To help meet that need ,the EDC has scheduled free trainings in construction and electrical basics on San Juan and Lopez and plumbing basics and “water tech” on Orcas and has carried out a number of similar initiatives over the last few years.
The need for skilled workers is acute. Commissioner Rick Hughes noted that a number of Seattle shipyard vendors were shuttering their doors because the cost of living there is getting too high and wondered if the county could capture some of that business. “Not without competent plumbers and electricians,” he was told.
Other datapoints of note:
- The county’s population stands at 16.7k, up 6% from last year.
- The median age is 51.4 years, down slightly.
- Nearly 13% of county residents live in poverty (based on the federal definition of $11,880 for a single adult).
- An additional 39% fall under the category “Asset Limited, Income Constrained, Employed,” which is defined here.
The second part of the workshop was led by McCafferty and Vance-Sherman who offered additional “Power Point” perspectives on the San Juan economy drawing from state and national data. There was, for example, a 1.6% increase (from 2016) in the number of jobs in San Juan County, although our economic recovery from the ‘07-‘08 financial crisis has lagged that of the state. Still, our unemployment rate is actually lower than King County’s – 3.5% v. 4.0% – which is all the more impressive given that such rates generally run higher in rural counties. We have a reliably healthy tourism industry to thank for that – Lodging/Food make up the biggest slice of the job pie (23%) – but of course that benefit comes with strings: low wages and seasonal jobs. Hughes noted that this is the second year in a row that sales tax revenue exceeded property tax revenue, though revenue from Lodging/Food was soft, triggering speculation that the rapid growth of private vacation rentals is at least partially to blame.
Other quick takeaways:
- Approximately 30% of County workers are “self-employed,” more than twice that of any other county.
- SJC residents are well-educated, second only to King County in the percentage of people with Bachelor degrees or higher.
No snapshot of the county would be complete without a look at housing, where the numbers paint an expectedly grim picture:
- The median price of a home in SJC is $475,000 (a figure that can fluctuate quite a bit given our small inventory).
- Based on an average annual wage of about $35,000, the County price/wage ratio for housing was 13.7 – compared to about 7.0 throughout the rest of the region. That makes housing here twice as unaffordable as our neighbors.
- Housing prices in the region are dropping, especially in Seattle, though it’s effect on San Juan County is still too early to gauge.
- 43% of all homes in the County are unoccupied (compared, for example, to 11% in Whatcom!)
When everything else is factored in (though data can speak in many languages), the Cost of Living Index in SJC is 129.6, which is close to the state index of 127.4 but quite a bit higher than the U.S. baseline of 100 (even though we have considerably lower utility costs, courtesy of abundant and relatively cheap hydroelectric power).
Looking ahead to the next five years, the most robust industry categories in the four-county region (excluding King), either in percentage growth or number of new jobs, are Construction, Information and Business Services, Government, Education, and Leisure/Hospitality, though mos tof those “new” jobs will be the result of turnover. You can also expect to see less structured work environments, more automation, a thriving “gig” economy, and (surprisingly) longer commutes as the number of people working remotely flattens and begins to decline as the emphasis shifts to more on-site access. (What’s next? Face-to-face meetings?)
When asked how all these numbers might influence their own business decisions, Audra Lawlor of Girl Meets Dirt, which specializes in“heritage preserves,” said that while there wasn’t much that was relevant to food manufacturing, “low average wages in the County is a concern. It motivates me to keep trying to create year-round employment to level out the seasonality.” Mindy Sonshine of Object Firma, a maker of “functional art,” was heartened by the expected growth in construction. “Instead of focusing on after-market products like a whale bench, how can we better target our products such as creating beautiful retaining walls?”
There are plenty of other metrics to stir into your beverage of choice. For access to the workshop slideshow, go to www.sanjuansedc.org/datapalooza. For more information on the EDC’s initiatives, call (360) 378-2906, email info@sanjuansedc.org, or go to www.sanjuansedc.org.
43% of all homes in the County are unoccupied? What on earth does that mean? Are they on the market, empty, or abandoned? Or is someone counting second homes? These data are meaningless without this information.
I’d add that a good electrician or plumber could form as a self-employed entity (a simple schedule C w/ less tax compliance cost), form a single-member LLC (also Schedule C and less tax compliance cost but w/some added alter ego personal liability protection), or S-Corp (with a K-1 out to the first page of your 1040 with all of the above plus add’l benefits and flexibility).
With one of these 3 possible entity formations, much can be subsidized through the tax code using a competent Accountant (so as to not cross red lines and risk an audit).
This isn’t as regressive as it sounds (for those worried about that) given that these are small businesses who are very much disadvantaged by the tax code and end being squeezed and made to suffer either at the expense of large multi-nationals who receive far greater benefits in the form of gov’t regs, laws and the IRC, or through subsidizing the statistically-defined “poor” at a per capita rate far in excess of their representative share of the nation’s gross revenue pie.
If properly set up and maintained, a talented sole-proprietor electrician or plumber could very well afford to purchase a low to mid-priced home on Orcas Island and raise a small family.
p.s….btw, sophisticated underwriters (for those electricians and plumbers wanting to buy a home) would know to reverse back-outs of particular deductions of a self-employed’s net profit so that he/she would satisfy underwriting income-to-monthly overhead ratios and then combine this result with a decent FICO score to qualify for that “seemingly” elusive home loan.
It’s do-able! As is the case in most of life, competence and well-educated citizens are rewarded throughout any, and I mean any, system organized by the human animal.
I’ve spent many years showing low self-esteemed people how they can begin to direct their own life-play while understanding how their bit-part plays in the larger scheme of life and society. Always easier to be dynamic and creative if you see the larger picture and not limit your vision to that of a cog in a wheel.
(not advertising services…trust me…just putting information out there so as to de-mystify and clarify that where’s there knowledge, there’s usually a way)