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Monday, April 10, 2006

Is Seattle Attracting Good Jobs?

Some of the recent discussions in the comments have centered on job growth in Seattle. In a comment on the most recent post, T.S. made the following claim:

The job situation is misleading. While there may be low unemployment, which is good, the newly created jobs are simply not high-paying enough to support the current housing market. Unless all the jobs being created are executive positions, that is, which I don't think is the case.
This comment reminded me of an article that was still in my inbox and hadn't been posted yet. The headline is When it comes to attracting CEOs, Seattle's not as pretty as she used to be.
At a recent meeting attended by local investors, a principal with a Seattle-based venture capital firm described the challenge he faces convincing top CEO types to move to Seattle to lead his ventures. His primary competition seems to be Silicon Valley, where a robust venture market chases the same business leaders.

Ask a typical Seattleite, though, and he'd be surprised the contest is even close. Seattle or Silicon Valley? He'll tell you that the Silicon Valley is all about expensive homes, snarled freeways and an embarrassingly low espresso-stand-per-capita ratio. Bad schools, smog and crime, too. Offered a choice, any CEO-for-hire would accept the invitation to Seattle without a thought, right?

It turns out not to be so anymore. According to our local venture firm principal, traffic is becoming a major Achilles' heel for our region — to the point where it spooks some CEO targets away before they get to the interview. After all, CEOs measure the same things anyone would: affordability of housing, lifestyle, quality of schools for their kids, commute distance to work, etc. Apparently, our traffic is nastier now. In the beauty contest to attract CEOs, it looks like Miss Silicon Valley is leading.
Perhaps we can concede the traffic mess to Miss Silicon Valley. But we must have the other parts of the contest won, right? How about affordable housing? Surely we have expensive California beat on that one.

Well, not so much anymore. Our rising housing prices have now put Seattle neck and neck with our competitor to the south. Call this part of the contest a draw.

How about schools? We all know about the crowded and underfunded California public schools.

Guess again. Seattle's schools just aren't what they used to be, apparently.
Let's also not forget the power of our delightful estate tax to drive away business leaders. Remember, the hard facts show that wages in our area are either growing very slowly, or actually decreasing. Where are the hard numbers that demonstrate Seattle's supposedly booming economy? Sheer numbers of new jobs are nice and all, but if they all pay less than the median there's no way that new jobs are going to sustain the housing growth we've seen.

Sure, we all love Seattle, but what does Seattle have to attract strong businesses and keep them here? Does Mr. Hoban's point extend beyond just CEOs to good, smart people in general, and even whole businesses? I think it does.

(Tom Hoban, Snohomish County Business Journal, 04.2006)


meshugy said...

I think article might explain Seattle's attractiveness for businesses and high wage earners.

"College graduates chase jobs, culture to big cities, AP analysis shows"

meshugy said...

A few quotes:

"Seattle was the best-educated city in 2004 with just over half the adults having bachelor's degrees. Following closely were San Francisco; Raleigh, N.C.; Washington and Austin, Texas."

"'The largest predictor of economic well-being in cities is the percent of college graduates,' said Ned Hill, professor of economic development at Cleveland State University. To do well, he said, cities must be attractive to educated people."

The Tim said...

Patience, patience, my friend. I'm getting to that article. It's next on my list and I even have the post half-written.

Anonymous said...

Let's not kid ourselves, here -- Seattle is not a "big city." Seattle is, as Dan Savage once described it, "Dubuqe, Iowa, putting on airs."

In my experience, Seattle has nothing to offer culturally, when compared to real cities (e.g. New York, Boston, Chicago, Miami, LA, etc.), coupled with most of the costs and inconveniences of big city life. And now, with housing prices that rival those of California, I can't see any reason to live here.

This college graduate is moving far, far, away as soon as he gets the chance....

Anonymous said...

The traffic thing is SO old news.

Boeing gave it as one of there top reasons for relocating headquarters to Chicago several years ago.

Did Seattle leaders hear that? No.

There is no hope for that city. They have proved time and time again that they are not interested in RAPID mass transit.

Clogged bus lanes for all! Whoopee! Great incentive for giving up your car.

Anonymous said...

This is no surprise. If you want to be a player in high finance, you want to be in New York. If you are in high tech, you want to be in Silicon Valley.

Anonymous said...

The Tim said...
Patience, patience, my friend. I'm getting to that article. It's next on my list and I even have the post half-written.

Mon Apr 10, 04:03:06 PM PDT

Complaining and scaremongering, T.E.?

meshugy said...

This is interesting:

"Coastal housing markets still way overvalued"

Seattle/Tacoma is ranked as "fair value." Maybe including Tacoma balanced out the Seattle's bubble?

Seems like every economist has a different formula for figuring out what the "real" value of real estate is. And they all come up with radically different results.

Eleua said...

I stopped by an open house on Sunday. The RE lady told me that we are immune to a bubble burst because Washington is supposed to add 100,000 new jobs every year for the next 15 years.

How does she know? What jobs? 1,500,000 new RE agents/builders/lenders? Is everyone going to open a coffee shop? Just how many eco-tours can the area absorb?

Economic forcasters, when forcasting good times, never see the gaping chasm we always fall into.

6 years ago, every stock pimp on the globe was saying go NAZ. I was told that I would be ruined if I tried to short the NAZ (granted, I came close from '98-early '00). Fast forward a few years, and you have the NAZ at 800. 5100 to 800, and that is with 50% margin caps.

RE is around 125% margin.

20 cents on the dollar by 2010. You heard it here first.