A funny thing happens when you Google “Seattle economy growth.” One of the top hits is an October 2018 story from KOMO: “Seattle named third fastest growing economy in America.”
Seattle’s economy is producing some of the highest wages and growth in the nation. While that growth is uneven in terms of who benefits — KOMO’s story describes Seattle’s persistent poverty rate as a sour note in an otherwise rosy outlook — few would argue from this evidence that Seattle is in trouble.
What’s funny is that on the same page, at the top of KOMO’s trending stories list, we currently see this: “KOMO News Special: Seattle is Dying.”
So, which is it?
Small business growth is up as well. Seattle Business Magazine reports, “Metro Seattle Ranks #1 for Small Business Job Growth, While National Rate Dips.”
Seattle, with the third highest weekly wage in the nation and fourth highest gross domestic product, also ranked fourth on Business Insider’s list of strong U.S. city economies.
But homeless people are ruining tourism, right?
Apparently not. Lonely Planet named Seattle in the top 10 U.S. cities to visit, and MeetingSource ranked Seattle in their “Top 5 Convention Sites in the U.S.”
Demand for hotel rooms outpaced supply last year, and the Washington State Convention Center is turning away business because they’re overbooked.
According to Visit Seattle, our city has enjoyed record-breaking growth in tourism for nine consecutive years. In 2018, nearly 41 million people came to Seattle, up 2.5 percent from last year. Tourist spending in Seattle increased by 6 percent, reaching a record $7.8 billion.
The Port of Seattle reports that we’re on track for another record-breaking cruise ship season as well, with “1,100,468 revenue cruise passengers this year, breaking last year’s record of 1,071,594.”
In 2018, Seattle also ranked third in the nation for growth in median income. According to Census Bureau figures, Seattle families earning more than $200,000 annually now outnumber those earning less than $50,000.
Here’s the statistic that reveals where the problem lies: Four years ago, Seattle ranked sixth in the nation on the GINI Index, a measure of income inequality. But in 2017, we went to the top of the list, in a dead heat with San Francisco for most unequal city in America.
Four years ago, Seattle ranked sixth in the nation on the GINI Index, a measure of income inequality. But in 2017, we went to the top of the list, in a dead heat with San Francisco for most unequal city in America.
Seattle is not “dying.” Seattle is splitting. West Coast cities with the highest rates of inequality — Seattle, San Francisco, San Jose — are also the cities that struggle most with growing homelessness. The prosperity at the top makes the anguish in the streets all the more galling.
According to the analysts over at McKinsey & Company, the top driver of homelessness in Seattle and King County is, wait for it, the cost of housing. If KOMO was interested in solutions more than lurid sensationalism, they might have mentioned this somewhere along the way.
“Homelessness has risen in line with the fair-market rent (FMR), which in turn has increased in line with the county’s strong economic growth. During the financial crisis of 2008, when poverty and unemployment rose, homelessness was relatively stable. But when the economy took off in 2014, so did rents. Since then, the FMR has risen by more than 12 percent a year on average.”
In a rising economy, housing gets built for the affluent. Since 2011, units built for those earning 80 percent of median income or more have doubled, while units built for those earning less than 50 percent of median have halved.
McKinsey notes that the growth in homelessness in King County strongly correlates to rising rents going all the way back to 2007.
When you add in the market attrition of affordable housing stock, the results are predictable. Personal crises are more likely to knock people out of their housing. Despite gains in “exits from homelessness,” the economic vulnerability caused by rising rents means homelessness grows.
If there’s one thing the alarmist KOMO report got right, it’s this: Seattle is long overdue for change. The misery we see on our streets is morally unacceptable.
Seattle is long overdue for change. The misery we see on our streets is morally unacceptable.
We need to invest in mental health services, better treatment options, more low-barrier shelter, and lots more affordable housing.
What’s broken in Seattle is the link between who benefits from our rising economy and who gets hurt. Fix that, and we all win.
Tim Harris is the founding director Real Change and has been active as a poor people’s organizer for more than two decades. Prior to moving to Seattle in 1994, Harris founded street newspaper Spare Change in Boston while working as Executive Director of Boston Jobs with Peace.
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