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Seattle is a booming tech market, and home to the headquarters of Amazon, Microsoft, T-Mobile, Starbucks and Tableau. It’s one of the best places in the country for tech companies to do business, which is why many top companies are trading the sunny skies of California for the wetter, but equally beautiful Pacific Northwest, or opening up Silicon Valley satellite offices in the region.
After another year of employment stability, economists are optimistic about the Seattle job market, and we’ve pulled together 10 useful facts and statistics, providing some insights into how this could impact companies doing business in the Puget Sound area.
- The Bureau of Labor Statistics (BLS) reports Washington added an estimated 86,400 jobs from July 2018 through July 2019.Private sector employment in Washington rose 2.9 percent, up an estimated 82,100 jobs, and professional and business services employment increased by 19,200, with a 14,000 increase in professional, scientific and tech jobs.
In the month of July 2019 alone, Washington gained an estimated 13,400 jobs over June 2019, on a seasonally adjusted basis.
There’s no doubt that the job market in Seattle is healthy and growing.
- According to Economic and Revenue Forecast Council (ERFC) data, Washington’s employment growth in 2018 has placed it fifth in the nation up from seventh the year before.
ERFC economists predict the state’s rate of job growth will hold steady at 2.4 percent for 2019. The Seattle job market accounted for about 63 percent of the state’s net increase.
- Employment Security Department (ESD) data indicates that 77,288 new jobs will be added in 2019 in Washington.
Washington had stronger employment growth (in percentage terms) in 2018 compared to the U.S. economy, and it’s expected that will be true again for 2019.
- According to the ESD, the largest increases this year will be in tech jobs, online retail trade jobs, and professional and business services jobs.
When compared to the nationwide distribution, the Seattle job market is more highly concentrated in the industries of computers and mathematics, business and financial operations, and architecture and engineering.
Science, technology, engineering and math (STEM) jobs increased 8.2 percent in Los Angeles and 8.1 percent in Seattle from 2014 to 2018 — the fastest rates of any metropolitan areas in the U.S., according to commercial real estate firm CBRE.
High-tech companies are driving the growth in Seattle’s economy, and along with the San Francisco Bay Area and Washington, DC, Seattle is expected to remain one of the nation’s top places for tech jobs throughout 2019. The top skills in immediate demand are:
- Business intelligence
- Enterprise Resource Planning (ERP) implementation
- Cloud security
- Cloud architecture
However, a 2019 Robert Half survey reports 92% of technology leaders as saying it’s challenging to find IT talent in Seattle. In order to fill gaps, 96% of the same leaders plan on bringing on project-based IT employees and consultants.
- Health care and manufacturing jobs will play important roles in statewide economic stability.
The growth in Washington’s employment in the healthcare space is largely due to technology as a means to improve patient care and address privacy concerns. As a result, the healthcare industry is evolving and changing more dynamically than a lot of other of other industries.
- Retail employment dipped from June to July 2019.However, year over year the industry is expected to grow at a rate of 2.11 percent.
Seattle is home to several retail giants—Amazon, Blue Nile and Zulily to name a few—who were responsible for much of the 5,200 retail jobs added in 2018. 3400 of these retail jobs were in the ‘other retail trade’ category which includes online retailers.
- In the Seattle-Bellevue-Everett metro area, the July 2019 unemployment rate sat at a low 3.6 percent compared to 3.9 percent in July 2018.
In the United States as a whole, however, unemployment was 4.1% on average in July 2018, dropping to 4% in July 2019..
- The average salary in Seattle of $63,120 is higher than the national average of $50,620, but not enough to keep up with the metro area’s cost of living.
To lure people away from cities where the cost of living is lower, companies have to offer above-average salaries. However, when the cost of living is above the national average, even high salaries sometimes aren’t enough. A study from GOBankingrates.com found that residents of Seattle earn a median household income $4,727 less than the income needed to cover necessities, savings and additional expenses.
- Employees in the Seattle-Tacoma-Bellevue Metropolitan Statistical Area had an average hourly wage of $31.44 in May 2018, about 26 percent above the nationwide average of $24.98
The average hourly wage for computer programmers in the Seattle area is $62.16 compared to $43.07 nationwide. This disparity is attributed to the high demand for engineering talent in the Seattle area. Amazon, just one example, currently lists some 4,500 software development openings in the greater Seattle area. Seattle companies are not only competing for talent with traditional tech cities, but also up-and-coming areas like Vancouver, Los Angeles, and Cleveland, some of which offer lower costs of living, making them more attractive to many in the tech industry. Companies operating on the Seattle job market will need to offer higher salary numbers to stay competitive.
- It costs employers in the Pacific states of AK, CA, HI, OR, and WA an average of $41.27 per hour per employee, compared to the country’s average of $34.49.
This figure is the total of wages and salaries plus additional costs such as benefits, paid leave, insurance etc. The cost of operations will continue to challenge Seattle businesses with employee costs alone amounting to almost 20% more than the average across the country. With the high cost of office space and other operational necessities likely to remain high in Seattle, it’s going to stay one of the most expensive cities in the U.S. in which to do business. Just ask Amazon. With 53,500 local employees, the online retailer paid $9 billion to its workers last year.
There’s no doubt about it, the city is experiencing an unparalleled economic boom, fuelled largely by big tech companies’ rapid pace of new jobs in Seattle. This job growth has brought with it welcome prosperity to the region, but also challenges as the real estate required to accommodate this job growth has lagged, and transport infrastructure isn’t keeping up. People want to live in Seattle and companies want to do business in Seattle. There’s no end in sight to the city’s growth, with Amazon on the hunt for 10,000 new employees in the Seattle area by 2020 and Apple planning to employ more than 1,000 workers in Seattle by 2022.
The question remains, however, can Seattle maintain such a breakneck pace of growth? And if so, for how long?