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Economic Revitalization is Slowly Hitting Washington's Rural Communities |
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Written On: May/June 2004 |
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Written By: by Charles Henry Thomas & Carly West |
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It’s no secret! Washington’s rural communities have not shared the economic prosperity of Seattle; however, if Lewis and Whitman counties are the bellwethers, sparsely populated areas are making a comeback.
Evidence gathered by the Washington Alliance for a Competitive Economy (WashACE), a partnership between AWB, the Washington Research Council and Washington Roundtable, shows per capita income in western Washington outside Seattle, Tacoma, Everett and Olympia, dropped 15 percent below the national average over the last decade. In eastern Washington the decline is even more striking — 22 percent.
The problem has been in agriculture, natural resources and manufacturing. With the notable exception of Schweitzer Engineering Labs (SEL), Pullman, manufacturing employment plummeted since June 2000.
Schweitzer is the Exception to Manufacturing Growth
U.S. Department of Labor statistics reveal that Washington lost the highest percent of manufacturing jobs (one-in-five) in the nation over the last three years. Edmund Schweitzer, who invented, patented and now manufactures digital protective relays for electric power systems, grew from 11 employees in 1985 to over 800 last year.
The research capabilities of Washington State University, where Schweitzer earned his Ph.D. in electrical engineering, is a key reason high-tech firms like SEL are locating in small communities like Pullman.
A big chunk of the manufacturing job loss was at Boeing as it started feeling the fall off of commercial airplane orders following the 9-11 attacks. The run-up in electric and natural gas prices since the turn of the century has sent aluminum and pulp and paper workers in country towns scurrying for new jobs.
“A 500 to 1,000 job loss in towns like Aberdeen, Longview or Goldendale has the same impact as a 30,000 to 40,000 layoff in Seattle or Everett,” AWB President Don Brunell said. “Too often we look at the Boeing numbers and overlook what is happening in rural communities.”
WashACE research shows that job growth spiked a bit in 1997 and has been dropping ever since. Farming, mining, fishing and timber harvesting employment started spiraling downward in 2000 before terrorists struck the Pentagon and World Trade Center in New York. Unfortunately, 2003 and 2004 data is not available to see if the slow recovery is sticking.
Agriculture, Natural Resource and Manufacturing Job Losses Hit Rural Area Hard
Not only have high costs for electricity and natural gas hit rural community hard, but reductions in fish and timber harvests relative to the listing of the spotted owl, marble murrelet and a plethora of salmon runs in1990s as threatened or endangered, reduced employment. Closed mills and for sale signs on logging equipment and fishing fleets were commonplace.
Finally, the strong U.S. dollar relative to foreign currencies crippled crop production. Washington farmers and food processors were undercut in domestic and overseas markets.
Growers in the Yakima Valley started ripping out apple orchards and replacing them with vineyards. That one move, more than anything, launched the economic transformation in the lower Yakima and Walla Walla River valleys.
New vineyards, wineries and associated tourism investments, like bed and breakfast establishments, are popping up daily from Selah to Dayton. Grapes and wine are leading the agriculture comeback.
Now, the wine industry is a $2.4 billion industry and consists of more than 240 wineries, 300 wine grape growers and 29,000 vineyard acres. Production of Washington wines has more than doubled over the past decade making wine grapes the state's fourth largest fruit crop and our state’s quality wines can be found worldwide in all 50 states and more than 40 countries.
Lewis County Prospering from Natural Resources and Energy
With its easy access to railways, waterways and Interstate 5, Lewis County is an appealing area for companies that process the raw forest materials provided by southwestern Washington. The largest company to open a new lumber mill is Lewis County Forest Products, which recently opened near Winlock.
In addition, Centralia Saw Mills was the first tenant in the new 200-acre industrial park at the Port of Centralia. It mainly processes privately grown Douglas fir and Western Hemlock trees. The company was drawn to this location in Lewis County because of its reputation for a knowledgeable and skilled workforce.
In May 2002, TransAlta, a Calgary company, acquired Centralia Steam-Electric Plant and Coal Mine. Now the company has the capacity to produce over 1,500 megawatts of electricity between two locations. This is enough electricity to meet the needs of 1.7 million homes and provides 800 jobs. Along with the TransAlta operation, the Tractabel plant, in Chehalis, a new 540 megawatts plant, makes Lewis County a huge power contributor to western Washington.
While the resurgence of old industries in Lewis County has helped the county make great strides in economic recovery, there is a newfound excitement for a different industry coming to the area.
Cardinal Glass Proposes $115 Million Plant
Cardinal Glass Industries, Inc. is the largest manufacturer of insulated glass in the United States, and this Wisconsin-based company has proposed building a float-glass plant in Evaline. The proposed $115 million project will be accompanied by over 200 jobs, the majority being local, to South Lewis County.
Like Schweitzer, Cardinal provides family-wage jobs. Already, Cardinal’s average pay is 60 percent above Lewis County’s average wage, thus raising wages as well as tax base for the county. It already has two finishing plants in western Washington.
Bill Lotto, executive director of the Lewis County Economic Development Council, explains that “there is a lot of excitement and optimism that we will see a return of optimism in this rural area.”
In Chehalis, Cresline Plastics, an extruded plastics company, and Braun Northwest, the only manufacturing facility for emergency vehicles on the West Coast, are bringing new jobs to the area around Centralia and Chehalis.
Lotto explains that Lewis County is a great place for manufacturing and distribution facilities “because we are located exactly halfway between Seattle and Portland, thus enabling companies to service two markets from one location.”
Costs Matter When It Comes to Reviving Rural Communities
Like their big sister city counterparts, cost matters when it comes to economic development. The National Association of Manufacturers (NAM) points out that our country has a 22.4 percent competitive disadvantage when compared with our nine trading partners (Canada, Mexico, Japan, China, Germany, the United Kingdom, South Korea, Taiwan and France).
“That’s $5 per hour when expressed in wages,” Brunell said. When WashACE compared our state to the other 49, it consistently rates high in taxation, unemployment and workers’ comp rates, costs imposed by state and local regulations and litigation expenses. The problem is further compounded because the low-cost, reliable electricity has evaporated.
“Even considering those challenges, there is a light at the end of the tunnel,” Brunell added. Boeing’s decision to assemble the 7E7 in Everett was a huge psychological lift because many of the project’s contractors will come from rural towns. For example, Hobart Machined Products, with facilities in Hobart and Ellensburg, produces highly-specialized, custom machined parts for companies like Boeing and Siemens.
Gov. Locke’s Competitiveness Council and Priorities/Price of Government process have also made a difference. “If the Legislature had not acted upon recommendations like reforming the unemployment system and prioritizing the use of our tax dollars, I don’t think we’d see the up-tick in our economic activity today,” Brunell observed.
“I think we have a competitive advantage over California and Oregon. Now the key is to keep the momentum going with a new governor and Legislature next year,” Brunell concluded.
“They face at least a $1 billion revenue shortfall, climbing enrollments in the state’s community colleges, and four-year universities and skyrocketing costs for health care.”
“These are tough decisions in trying times, but no more difficult than what rural communities have faced for years.”
Charles Henry Thomas and Carly West are western Washington freelance writers.
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