Dr. Hart Hodges presented economic data of trends in professional technical services at a national, state and loval level, including trends of what is and is not working. These trends highlight demographic, economic and other changes affecting the way communities recognize their leaders and how leaders communicate. Hart Hodges is a professor of economics at WWU and the director of Western’s Center for Economic and Business Research. He is also a partner at Waycross Investment Management Company. In the classroom Hart teaches health economics and environmental economics, as well as the traditional core courses. At the Center, he focuses on applied business economics and connecting the university to the business community in the region. He also enjoys being active in the private sector as a registered investment advisor and fiduciary. He received his PhD from the University of Washington, masters in environmental management from Duke University, and his BA from Williams College. Hart is active in the community, currently serving on the boards of the NW Workforce Development Council and NW Economic Development Council.

1. 2014 Economic Forecast:
Leadership’s Role in a Changing Economy
Technology Alliance Group for Northwest Washington
January 29, 2014
Hart Hodges
Western Washington University

2. Sources:
•
•
•
•
•
•
Washington Dept. of Employment Security (for state and
local employment and wage data)
US Bureau of Economic Analysis (GDP data)
Washington Office of Financial Mngt (population figures)
JP Morgan and Washington Office of Forecast Council
(forecast estimates)
The Economist magazine (graphics related to 3-D printers)
Other slides show authors and publication dates – citations
available upon request.

3. Economics
Demographics
Institutions/
Leadership
Technology

4. What to Do ?
Autor and Dorn, 2008

5. Employment Change 97 - 06
Employment Category (white
collar jobs)
High skilled
% Change
24.6
lawyers, engineers, etc.
Medium skilled
-30.1
computer support
Low skilled
sales rep, drafter, exec. asst.
Crino, Review of Economic Studies, 2010
1.5

6. Percentage Change in Employment, 1980 - 2010
120
100
Percent
80
60
40
20
0
High skill
Upper middle
Lower middle
Low Skill

7. Percentage Change in Real Wages, 1980 - 2010
40
35
30
Percent
25
20
15
10
5
0
High skill
Upper middle
Lower middle
Low Skill

8. 1975q1
1976q3
1978q1
1979q3
1981q1
1982q3
1984q1
1985q3
1987q1
1988q3
1990q1
1991q3
1993q1
1994q3
1996q1
1997q3
1999q1
2000q3
2002q1
2003q3
2005q1
2006q3
2008q1
2009q3
2011q1
2012q3
Nonfarm Jobs (1,000s)
146,000
126,000
116,000
10,000
106,000
96,000
8,000
86,000
6,000
76,000
66,000
4,000
$ (billions)
Structural vs. Cyclical ? (Inflation ?)
16,000
156,000
14,000
136,000
12,000

9. Bio-chemistry and
Health Care
Education?
Retail?
Transportation
(especially with
energy boom)

10. What do these changes mean for the local
economy?
What disruptions can we anticipate… and
when?
Note: the changes described so far do not
explain the sort of inequality in wealth we
are seeing today…
What is driving the inequality?

11. Global Forecast – Modest Growth

12. Global Forecast – Modest Growth

13. Metrics for U.S.
2012 Actual
2013 Expected
2014 Forecast
Annual Percent Change
Real GDP
2.4
2.0
2.2
Non Farm Jobs
1.6
1.6
1.6
Housing Starts
20.5
27.6
12.0
CPI
2.9
1.7
1.3
Rate (%)
Unemployment
Rate
8.5
7.8
7.1
10 Yr Treas. Yield
1.8
3.0
3.5+
30 Yr Fixed Mort.
4.0
3.5
4.4

14. Washington Outlook
2014 Forecast (US)
2014 Forecast (US)
Annual Percent Change
Real Per Capita Income
1.8
1.7
Non Farm Jobs
1.8
1.6
Manufacturing
0.7
0.8
Service Providing
1.8
1.6
Housing Units Authorized
CPI
- 0.7
1.2
(Seattle)
1.3
(U.S.)
Rate (%)
Unemployment Rate
6.85
7.14

15. General Trends:
Recent population growth
Whatcom County: roughly 1%
Washington State: roughly 1%
Annual job growth since Aug ‘09
Whatcom County: roughly 1.8%
Washington State: roughly 1.7%
Retail Sales
Whatcom County: slightly higher growth

16. Looking past the aggregate trends:
Population growth
Growth differs by age cohort by county
Job growth
Very different job mix in major metro
areas versus more rural areas
Resulting in wage growth disparity
Retail Sales
Distribution of activity within the county
invites important questions

17. Local Employment Growth
• Roughly the same as the state…
3,050,000
88,000
3,000,000
86,000
2,950,000
84,000
2,800,000
80,000
2,750,000
78,000
2,700,000
76,000
2,650,000
74,000
2,600,000
Aug-13
Mar-13
Oct-12
May-12
Dec-11
Jul-11
Feb-11
Sep-10
Apr-10
Nov-09
Jun-09
Jan-09
Aug-08
Mar-08
Oct-07
May-07
Dec-06
Jul-06
Feb-06
Sep-05
70,000
Apr-05
2,500,000
Nov-04
72,000
Jun-04
2,550,000
Jobs - Whatcom
82,000
2,850,000
Jan-04
Jobs - Washington
2,900,000

18. Aug-13
Mar-13
Oct-12
May-12
Dec-11
Jul-11
Feb-11
Sep-10
150,000
Apr-10
Nov-09
Jun-09
Jan-09
Aug-08
Mar-08
Oct-07
May-07
Dec-06
Jul-06
Feb-06
Sep-05
Apr-05
Nov-04
Jun-04
Jan-04
Jobs in Retail Trade
160,000
11,500
155,000
11,000
Whatcom
10,500
145,000
10,000
140,000
Seattle
135,000
9,500
130,000
9,000

19. Sep-13
May-13
Jan-13
Sep-12
May-12
Jan-12
180,000
Sep-11
May-11
220,000
Jan-11
Sep-10
May-10
Jan-10
Sep-09
May-09
Jan-09
Sep-08
May-08
Jan-08
Sep-07
May-07
Jan-07
Sep-06
May-06
Jan-06
Sep-05
May-05
Jan-05
Sep-04
May-04
Jan-04
Jobs in Professional & Business Services
230,000
8,500
Seattle
8,000
210,000
7,500
200,000
7,000
190,000
6,500
Whatcom
6,000
170,000
5,500
160,000
5,000
150,000
4,500
140,000
4,000

20. Immigration and Emigration
Cohort
25 - 29
30 - 34
35 - 39
Etc.
60 - 64
65 - 69
2002
2007
2012

21. Change in Cohort Size: 2007 - 2012
Cohort
WA State
King
Whatcom Jefferson
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
65 - 69
70 - 74
3
3
-3
15
3
2
2
5
0
0
3
6
-1
-4
1
2
-1
-4
-3
6
-1
-4
2
11
-2
-6
3
15
-4
-9
-2
12
-9
-11
-8
-7

22. Job Mix: Cause or Result?
Professional & Technical Service Jobs
10
9
King County
Percentage of Total
8
7
Whatcom
6
5
4
3
2
1
0
2005-2012
2005-2012

23. Job Mix – Major Metro vs. Small Metro
King
Whatcom
20
18
16
Percent of all Jobs
14
12
10
8
6
4
2
0
Const
Mfg
Retail
Info
Prof & Tech
Accom
Health
Govt

24. Wage Mix – Major Metro vs. Small Metro
King
Whatcom
25
Percent of all Wages
20
15
10
5
0
Const
Mfg
Retail
Info
Prof & Tech
Accom
Health
Govt

25. Are the trends in this recovery robust – or
temporary?

26. Economics
Demographics
Institutions/
Leadership
Technology

27. Leadership in business:
• What has changed?
• Is the landscape more competitive;
does it require a different approach?
Leadership in the community:
• What is needed for leadership given
the technical, demographic and
economic changes

28. Thank you !
Hart.Hodges@wwu.edu
Center for Economic and Business Research
Western Washington University