How Can We Supercharge Clallam County’s Economy?

Raising the Bar: How to Attract Jobs That Truly Grow Our Local Economy

I reached out to Colleen McAleer, Executive Director for the Clallam Economic Development Council, and asked her if she would pen an article for Clallam County Solutions. Always a busy woman, she no less obliged. Below is her article, in its entirety. Economic development and prosperity are key to improving our community, and I’m thankful for Colleen and the EDC’s work to create a better future.
- Danny Steiger

How Can We Supercharge Clallam County’s Economy?

by Colleen McAleer - CEDC Executive Director

When we think of our economy, we can think of our community as if we were a large family. If I pay my son $20 to mow our lawn, our family’s wealth did not increase. We merely circulated the $20 within our family. However, if my son mows my neighbor’s lawn and makes $20 our family just became $20 wealthier. Conversely, if we are always paying our neighbors to mow our lawn, we are sending our money out, our net wealth is decreasing.

Another fundamental concept to understand is what drives our county’s average annual wage and how important that number is for our future growth. When we create new jobs that pay less than our county’s full-time equivalent average, our average goes down. By contrast, if we create new jobs that pay higher than our county’s average wage, the average goes up.

Not rocket science, but those two functions are more critical than most people realize.

An example of a company that would maximize our county’s overall wealth is one that

- gets all of their supplies and equipment within the county
- sells all of their finished products outside the county
- is privately owned and where owners live and spend inside the county, and
- where the employees are paid well over the county’s average wage and the employees receive a strong benefits plan.

The government publishes every county’s average wage through the Quarterly Census of Employment Wages (QCEW). The last full year of data published was for 2023.

Clallam County’s annual wage was $52,503 in 2023 or $25.24 per hour. Businesses look at this number and its trend over the years to determine if they want to enter a community. If that number has trended up, compared to other areas, then the business knows the county’s economy is expanding and growing, allowing room for them to profitably enter that economy. If the number is relatively flat, then they look at other locations to expand or locate.

Of course, there are many other indicators companies consider, but by and large retailers and housing developers use this metric as a primary driver along with population.

One common measure used for area income can be confusing or lead to false conclusions about our economy. Our County’s average wage is different from Area Median Household Income also referred to as “AMI”. Area Median Household Income is published by Housing and Urban Development (HUD). This figure is based on the number of people in a household. You would think a household of one person would equal the average annual wage, but it does not. The AMI for one person in 2023 was $58,500 or 11.4% higher in Clallam County than the average annual wage. Why is that? Because we have a lot of one-person households that are retired that are receiving retirement savings, social security and pensions that are more than the average annual wage, so they pull that number up. In 2024 the AMI for a one-person household jumped to $64,300 but the average annual wage is nowhere near that pay.

What we really need to focus on is our working population’s average wages and those private sector businesses that can pay above-average wages. We know that to afford rent and just get by today you need to make $28 per hour plus benefits, which we call a prosperity wage. That’s our target. That’s the path to improving the wealth in Clallam County. Those sectors that pay enough to increase our region’s average annual wage for people without a specialized degree are construction, maritime, and forest products.

If we successfully focus on growing existing businesses and attracting high-wage private businesses, then the retail, service and multifamily housing sectors that generate a lot of local sales taxes and housing will follow.

As an example, hotels chains look specifically at occupancy rates Monday-Thursday nights when considering expansion into new communities. Hotel chains know they can fill their rooms on weekends with tourists. They rely on weekday overnight stays from business activity to ensure their revenues meet their targets.

Multifamily developers look at median income rates to see if tenants could generally afford their rents and they look at trends to ensure they will be able to increase their rents. Retailers do the same thing when they decide where to locate when looking to expand.

The retail, service and tourism sectors generally pay on average a wage lower than the QCEW Average Annual Wage for Clallam County due to limited hours, seasonality and lack of benefits. As an example, when a Walmart enters a community initially there are an additional 200-300 new jobs, and the municipality receives a large amount of sales tax from the construction of the store. However, according to a UC Irvine study, that Walmart store opening leads to a 2.7% reduction in retail employment in the community and over a 20-year period the economic output of the community drops by $13 million. In addition, Walmart employees receive $6.2 billion annually in public assistance (food stamps, Medicaid, subsidized housing, etc.) according to a study by the Americans for Tax Fairness study, yet Walmart’s annual gross profit in 2024 was $158 billion, a 7% annual increase. Where did those profits from the two Walmart’s in Clallam County go? They did not stay in Clallam County. This is an example of Net Negative Wealth Impact.

Every job is important to every person and family. My intent is not to demonize Walmart. They provide goods at very reasonable prices to consumers. But if we want to improve our economy, we need to target high-wage businesses, knowing that growth in service jobs will follow, but without dragging down our economy.

We must focus on businesses that provide a Net Positive Wealth Impact to Clallam County.

Our beautiful environment has spurred our steady but slow population growth due to in-migration of primarily retirees. While retirees do bring their wealth and spending, they don’t raise our average wage or provide sustainable economic growth. We must find higher-paying wages for our existing workforce and graduating students.

What is Clallam EDC doing to improve Net Positive Wealth in Clallam County?

We know our economy was largely built over the decades on the forest products sector. We have created a Natural Resources Innovation Center that supports our highest private average annual wage sector – forest products. These companies create jobs that meet all the criteria to maximize local Net Positive Wealth. We are helping to reframe the thinking of the industry by accelerating the development of natural resource businesses and jobs that pay a prosperity wage. We are currently doing this through the Clallam Forest Product Innovation Program, a $5.2 million program comprised of 12 closely related projects that offer job growth through innovation and sustainability. We are convening industry members to replace old, restrictive narratives with a new context that leverages innovations and stronger collaboration. We are asking our industry leaders “are we focused upon the future context or the past? What are the trends, where are we going, and are potential partners collaborating?”

We at Clallam EDC support the expansion of amenities and services in our community, and the jobs that come with them. But these jobs should not form the core of our economic strategy, which would further endanger our average wages and send the wrong signal to businesses considering expansion here. Instead, let’s focus on those higher wage opportunities, which will in turn drive expansion in our service economy, benefiting workers at all levels.

In partnership with Peninsula College and EDC Team Jefferson, we are hosting a public Economic Futuring Event on June 4^th to discuss these issues and collaborate with business leaders and elected officials to work in concert to change our trajectory. This will be a public meeting, and all are welcome to attend. Contact info@clallam.org and we will email you a link to register for the 4-hour event.

Note of disclosure: Danny Steiger is the sitting Board President for the Natural Resources Innovation Center.

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