by Brian Kennedy and Dr. Patrick Jones
In 2018, a little over 70% of the entire workforce in Chelan and Douglas Counties was concentrated in just five sectors: Agriculture, Government, Healthcare, Retail Trade, and Accommodation/Food Services. While there are some inherent risks associated with having such are high percentage of the workforce concentrated in just a few sectors, there are also some benefits to playing to a region’s strengths as well. Shown on Trend 2.3.3: Share of Employment in Top-5 Employing Sectors, agriculture continues to lead the pack, but throughout the trend there has been some shifting in the remain top four positions showing signs of diversification, albeit quite slowly.
By size of its labor force, production agriculture is the top sector. Consistently from 2003 up through 2018, it has been the leading source of employment throughout the community. Of the roughly 58,000 jobs in the two counties, this sector accounted for about one in four, or almost 14,000 total jobs in 2018. With Chelan County agriculture focus on tree fruits such as pears, cherries and apples, the county accounts for 10,662 of the two county’s entire agricultural workforce. Douglas county, growing a variety of grains, tree fruits, and raising cattle, posted 3,298 jobs in 2018.
And while this sector has been slightly growing, it’s been the healthcare and social assistance sector that is leading the growth of the top five sectors. This relative performance may well continue. Analyzing the trends, Don Meseck, the regional labor economist from the Washington State Employment Security Department, states that “agricultural employment trends over the next ten-year period shows that employment appears to be stabilizing or may decline slowly. One reason behind things could be the automation in the industry, harvesting of deciduous tree fruits in particular.”
Over the last fifteen years, the share of workers in healthcare and social assistance has surpassed retail trade to take claim the third largest employing sector in the two counties. Growing at a compound annual growth rate of 3% in from 2003 through 2018, this sector accounted for 12.3% of the jobs across the counties in the latter year. From 2003 to 2018, 2,407 new jobs were added to the workforce. According to Meseck, “this is largely attributed the presence in Wenatchee of a large medical center and hospital in Wenatchee. In effect, Wenatchee has become a hub for high quality medical services in North Central Washington.”
Government occupies the second spot in the two counties at 16% of the workforce. Government is a diverse sector that incorporates much more than just the elected officials. It includes the public primary and secondary schools, public health services, the ports, the public utility districts, police and fire. While still adding nearly 1,200 jobs from 2003 to 2018, it has grown at a slower pace relative to the other sectors, at just a compound annual growth rate of 1%. While still retaining the second spot over the trend, this has contributed to government’s share of the workforce declining by about two percentage points.
Although retail trade was bumped from its third position in the combined counties for the 2018 rankings, it is still a driving force in the economy, particularly in Douglas County where employment here contributed 13.5% to the overall labor force in 2018. And while this sector’s share has shrunk in Chelan County, the driving force behind the reduction in the combined counties, it has still continued to grow in Douglas. Of the 3,800 jobs added from 2003 to 2018 in Douglas County, nearly one in five came from the retail sector. This can be attributed to the Wenatchee Valley Mall in East Wenatchee, North Central Washington’s largest shopping mall according to the Washington State ESD’s county profile.
Trend 2.3.4 shows the trend for the accumulation of the top five sectors concentration in the workforce. This trend shows how much of the workforce that is concentrated in each county’s top five sectors. For the combined counties this share has been hovering around 73% for the entirety of the trend, with Douglas County (70.8% in 2018) slightly lower than Chelan (74%). This high concentration in just a few sectors is very indicative of the largely agriculture based metro areas in Eastern Washington, outside of Spokane. It is also true of a relatively small economy, relative to state and large metro comparisons. Yakima, Walla Walla, and Benton, are all offered as benchmarks and all sit around 70%, with Benton being the exception at 60%. Similarly, the concentration of sectors in Grant County (not depicted on the graph), another agricultural based economy, sits right at 70% as well according to the Quarterly Census of Employment and Wages.
This high concentration of employment in just a few sectors comes with both benefits as risks. It’s important for communities to focus on what is good in the region in order to succeed in a competitive market. Meseck goes on to state “the right climate, soil, availability of qualified workers, and distribution networks have enabled Central Washington growers to excel in the global agricultural market.” However, he reminds us that “the old adage of ‘don’t put all your eggs in one basket’ still applies.” This is likely why local communities within the two counties have shown signs of diversification such as the conversion from traditional farms to solar, wind, and informational server farms.
So while agriculture is still the big kid on the block, and likely to continue to be in the near future in terms of employment, there has been some shifting in the remaining top five positions. With government and retail trade losing comparative advantage sectors in healthcare and accommodation and food services have been increasing their standing across the two counties.