At the annual meeting of the Economic Development Council (now the Northwest Economic Council), members were given some perspective.
On the screen at the presentation was a graph — the same graph you can find on page 7 of this issue — which demonstrated job loss now compared to six other economic downturns in the past 100 years. At the top of the graph are gentle dips over two to four years in which employment gradually declined and then gradually gained again until the downturn was over.
Compare that to the crash during the Great Depression, where the employment numbers fell and fell and fell — and there really is no comparison. Sometimes there’s nothing like a graph to give you some perspective.
One of the consistent themes in the news these days is how uncertain we are about everything financial. Consumers lack confidence in the markets, and lenders are unwilling to take risks. These are indicators that there is uncertainty in the world, which leads to mass behavior of the type where everyone is hanging on to their money. While this is good for the individual, it is not necessarily good for the economy.
But as we start seeing more data come through from the last couple of months, it should start calming those frazzled nerves. We are exiting crisis mode and entering into management mode, as speakers such as Dennis Murphy, provost and vice president of Academic Affairs at WWU, who gave the keynote address at the NEC’s annual meeting, reflect on the data instead of speculating.
The data seem to indicate that this is, indeed, a recession, but we will not be falling to the depths that we saw in 1929. We will not be seeing people burning their furniture to stay warm, or see endless lines at the food banks. We won’t see one in four people unemployed, or more than 5,000 banks fail.
Instead, we are starting to hear talk that it is likely things will start turning around after another three quarters. This is good news — while it means we will continue to see layoffs and business failures, at least there is a light at the end of the tunnel. Most businesses will get their feet under them as they restructure and adapt.
It is interesting to note that it is not only businesses that are rethinking strategy. This past month or two has seen name changes by three important economic agencies in Bellingham: The Downtown Renaissance Network is now the Downtown Bellingham Partnership, the Small Business Development Center is now the Center for Economic Vitality, and now the EDC has become the NEC. These changes are indicative of a more mature economic development climate in Whatcom County, as these agencies refine what they do to help businesses become more competitive.
This is all good news for local businesses, who are themselves adjusting business practices to a leaner economy. The rest of this year will likely be tough, but we will get through it and be stronger for it.
by Rik Dalvit