Whatcom County weathers string of recent job losses

By Deanna Duff

For The Bellingham Business Journal

True to tradition, Whatcom County is rolling up its sleeves and getting to work. The community has suffered a recent run of local layoffs with more possibly on the horizon. The impact is undeniable, but efforts are under way to mitigate repercussions and capitalize on overall growth.

“We have the right people in place to weather this storm. Hopefully, this spate of bad news in a short time period is kind of an aberration,” says Bob Wilson, executive director, Whatcom Council of Governments.

In December, environmental and engineering firm CH2M Hill closed its Bellingham office. The Washington State Employment Security Department (ESD) reported a loss of 128 jobs. In September, ESD listed a 92-job loss from the closure of Mount Baker Vapor. Bible software firm Faithlife Corp. announced in January a layoff of approximately 60 employees.

In what will be the largest of recent losses, Alcoa announced in November 2015 plans to curtail its workforce at the Intalco Works aluminum smelter by 465 jobs.

Using software projections, Hart Hodges, director of the Center for Economic and Business Research at Western Washington University, estimates that a 450 Alcoa layoff could translate into a total loss of 1,300 jobs.

In a welcome reprieve, Alcoa announced in mid-January that it would delay cuts until approximately June 2016. State Sen. Doug Ericksen, R-Ferndale and chairman of the Senate Energy, Environment and Telecommunications Committee, made a public statement expressing hope “to keep the plant open for good.”

Even if that proves impossible, advance planning could alleviate pressure on what Hodges terms the “indirect effect” – businesses supporting Alcoa, such as wholesale suppliers, trucking companies and mechanics, who might subsequently also be forced to downsize.

“If we can look more downstream and see who else is affected, it might be possible to work in advance with companies and other industries who might be impacted. Do you need help? Are you starting to diversify now?” Hodges says.

The second consequence of layoffs is the “induced effect” – job losses in sectors such as retail and hospitality that suffer from reduced personal spending. According to Hodges, those ramifications can be attenuated when companies offer benefits and severance packages to bridge income between jobs. However, there is inevitably an impact when household incomes are unstable.

Wilson cites continued cooperation between Whatcom’s communities, lawmakers and associations as a considerable asset in recovery. In 2015, the Whatcom County Council unanimously approved the 2015 Comprehensive Economic Development Strategy, which joined the region’s seven incorporated cities in a cohesive plan for future economic health.

“We still have lower wages than certainly King County and Central Puget Sound. Companies do well here in terms of labor costs,” Wilson says. “It’s also a strategic location with good transportation along I-5, the rail system and good access to the Canadian markets.”

The area’s educational institutions are also poised to play a key role in current economic recovery as well as solidifying future stability. The 2015 Comprehensive Economic Development Strategy reported that Bellingham Technical College’s Engineering and Advance Manufacturing graduates earned an average of $50,000 post-graduation.

“Whatcom Community College, Bellingham Tech and obviously Western Washington University are huge players,” Wilson says. “They are relatively nimble in their ability to develop programs that meet regional needs.”

Guy Occhiogrosso, president and CEO of the Bellingham/Whatcom Chamber of Commerce & Industry, hopes to see continued dedication to tax and other economic incentives for businesses to locate and remain in the region.

“This community has already done great things, especially in fighting for Alcoa. All of these (layoff) situations are different and I would say related to larger, global markets. However, whatever we can do to ensure our employers remain competitive will also make us stronger.”

Both Wilson and Hodges agree that the layoffs – while significant and serious – are largely unconnected and not indicative of a inherent weakness in Whatcom County’s economy. CH2M Hill cited the downturn in oil and gas industries for its layoffs. Alcoa likewise has been impacted by a precipitous drop in aluminum prices on the global market.

“You try to help all area businesses as much as you can, but there are larger, macro forces at play,” Hodges says. “This is the result of unfortunate circumstances.”

In fact, the overall statistical trend is encouraging. According to Anneliese Vance-Sherman, Regional Labor Economist with the Employment Security Department, Whatcom County’s unemployment rate has declined from 6.4 percent in November 2014 to 5.3 percent a year later.

“The overall trend has been one of growth. We’re seeing the number of jobs steadily increasing. The unemployment rate has consistently declined since reaching its peak in 2010 during the worst phase of the jobs recession locally,” Vance-Sherman says.

Since November 2014, Whatcom County made noticeable gains in construction and manufacturing employment. Those numbers will shift if Alcoa proceeds with 2016’s layoffs, but it might not be a harbinger of an overall downturn. Hodges points to Lynden’s Rader Farms expanding their berry processing operations into Bellingham as an indicator for long-term optimism.

“There are a number of success stories in the manufacturing sector, in this case food manufacturing. Our successes are sometimes smaller, but they add up,” Hodges says.

Wilson agrees and hopes that combined efforts will aid those currently struggling and also build the framework for an even stronger economic future.

“I’m not going to tell someone who recently lost their job not to be discouraged. My thoughts are with them,” Wilson says. “Generally speaking, though, the county is strong. We have everything from organic ice cream makers to refineries. We can remain optimistic about the outlook for Whatcom County.”

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