Economy of Spokane, Washington

Main article: Spokane, Washington
The Spokane commercial district

The economy of Spokane plays a vital role as the hub for the commercial, manufacturing, and transportation center as well as the medical, shopping, and entertainment hub of the 80,000 square miles (210,000 km2) Inland Northwest region.

Spokane’s economy has traditionally been natural resource based—heavily dependent on extractive products produced from farms, forests, and mines—however, the city’s economy has diversified to encompass other industries, including the high-tech, healthcare, and biotech sectors.

The Spokane area is considered to be one of the most productive mining districts in North America. In the late 19th century, gold and silver were discovered in the Inland Northwest, leading to intensive development of mines in the region. The expansion and growth of Spokane abruptly stopped in the 1910s and was followed by a period of population decline due to economic factors.

The first permanent European settlement in the Spokane area and Washington state came with the fur trade, with the westward expansion and establishment of the North West Company’s Spokane House in 1810. The Spokane House was the center of the fur trade between the Rockies and the Cascades for 16 years.

Economic history

Trade

The explorer-geographer David Thompson, working as head of the North West Company's Columbia Department, became the first European to explore the Inland Empire (now often called the Inland Northwest).[1] Crossing what is now the U.S.–Canadian border from British Columbia, Thompson wanted to expand the North West Company further south in search of furs. After establishing the Kullyspell House and Saleesh House trading posts in what are now Idaho and Montana, Thompson then attempted to expand further west. He sent out two trappers, Jacques Raphael Finlay and Finan McDonald, to construct a fur trading post on the Spokane River in Washington and trade with the local Indians.[2] This post was established in 1810, at the confluence of the Little Spokane and Spokane rivers, becoming the first enduring European settlement of significance in Washington state.[1] Known as the Spokane House, or simply "Spokane", it was in operation from 1810 to 1826.[3] Operations were run by the British North West Company and later the Hudson's Bay Company, and the post was the headquarters of the fur trade between the Rocky and Cascade mountains for 16 years. After the latter business absorbed the North West Company in 1821, the major operations at the Spokane House were eventually shifted north to Fort Colville, reducing the post's significance.[4]


Mining boom

Pyromorphite specimen from the Bunker Hill Mine


The 1883 discovery of gold, silver, and lead in the Coeur d'Alene region of northern Idaho lured prospectors.[5] The Inland Empire erupted with numerous mining rushes from 1883 to 1892.[6] Mining and smelting emerged as a major stimulus to Spokane. At the onset of the initial 1883 gold rush in the nearby Coeur d'Alene mining district (which generally encompasses present day Stevens, Ferry, and Pend Oreille counties and northern Idaho), Spokane became popular with prospectors, offering low prices on everything "from a horse to a frying pan".[7] It would keep this status for subsequent rushes in the region due to its trade center status and accessibility to railroad infrastructure.[8][9]

Spokane became an important rail and shipping center because of its location between mining and farming areas.[10][11] In the early 1880s, gold and silver were discovered in the Inland Empire; as a regional shipping center, the city furnished supplies to the miners who passed through on their way to the mineral-rich Coeur d'Alene, Colville and Kootenay districts.[5] The mining districts are still considered among the most productive in North America.[12] The Coeur d’Alene district of Shoshone County (also known as Silver Valley) in northern Idaho has produced more silver than any other mining district in the United States, and is historically one of the top three silver districts in the world in total silver produced.[12] The district competes with Potosi in Bolivia and Pachuca-Real del Monte in Mexico for the title of greatest silver district, each having produced more than a billion troy ounces of silver.

Spokane Stock Exchange

The Peyton Building was one of the many buildings the Spokane Stock Exchange once occupied

During the mining boom, Spokane had its own stock exchange, the Spokane Stock Exchange, which began trading mining shares on January 18, 1897.[13] The exchange originally consisted of 32 members and listed 37 stocks of mines across northeastern Washington, northern Idaho and southern British Columbia.

Logging, forestry, and agribusiness

Spokane Sash and Door Company Flats


After mining declined at the turn of the 20th century, agriculture and logging became the primary influences in the Spokane economy.[14] The lumber industry in Spokane began with the city's founding in 1871 when Downing and Scranton built Spokane's first business, a sawmill. As with the mining industry, lumberjacks and millmen working in the hundreds of mills along the railroads, rivers, and lakes of northern Washington and Idaho were provisioning themselves in Spokane.[15] The population explosion and the building of homes, railroads, and mines in northern Idaho and southern British Columbia fueled the industry.[14]

Before the construction of the railroads that connected the region, Spokane’s lumber supply was largely imported from North Idaho, especially St. Maries, Idaho; lumber would be rafted 25 miles north on the St. Joe River and Lake Coeur d'Alene and then rafted down to Spokane’s mills via the Spokane River.[16] Although overshadowed in importance by the vast timbered areas on the coastal regions west of the Cascades, and burdened with monopolistic rail freight rates and stiff competition, Spokane became a noted leader in the manufacture of doors, window sashes, blinds, and other planing mill products.[17] Rail freight rates were much higher in Spokane than the rates in coastal seaport cities such as Seattle and Portland, so much so that Minneapolis merchants could ship goods first to Seattle and then back to Spokane for less than shipping directly to Spokane, even though the rail line ran through Spokane on the way to the coast.[18][19] Despite this, the city became noted for processing and distributing dairy and orchard products and for producing products milled from timber. By the early 20th century Spokane was primarily a commercial center rather than an industrial center.[20]



The surrounding area, especially to the south, is a productive agricultural region known as the Palouse. The growth of the Inland Northwest's rural counties was the result of the governmental and private efforts to irrigate and develop farmlands in the region. These programs, especially the Big Bend Project, resulted in an estimated 2,000,000 acres of arable farmland worth an estimated value of $50,000,000 in 1920.[21] A number of award winning wineries and microbreweries also operate in the Spokane area.[22][23] The largest brewery in Spokane is the No-Li Brewhouse.

Stagnation

Central Steam Plant built in 1916

Expansion abruptly stopped in the 1910s and was followed by a period of population decline,[24] due in large part to Spokane's slowing economy. Control of regional mines and resources became increasingly dominated by national corporations rather than local people and organizations, diverting capital outside of Spokane and decreasing growth and investment opportunities in the city.[24]

During this time of stagnation, unrest was prevalent among the area's unemployed, who became victimized by "job sharks", who charged a fee for signing up workers in the logging camps. Job sharks and employment agencies were known to cheat itinerant workers, sometimes paying bribes to periodically fire entire work crews, thus generating repetitive fees for themselves.[25] It is around this time in Spokane that the first of many nationwide free speech fights conducted by the Industrial Workers of the World (IWW) or "Wobblies" had begun, spread, and garnered national attention.[26] With grievances concerning the unethical practices of the employment agencies, they initiated a free speech fight in September 1908 by purposely breaking a city ordinance on soapboxing.[26]

The Industrial Worker began publication in Spokane in 1909

The 1920s and 1930s saw the similar, but less drastic slow growth of the 1910s, and this change of outlook forced city boosters to market the city as a quiet, comfortable place suitable for raising a family rather than a dynamic community full of opportunity.[27] The Inland Northwest region was heavily dependent on natural resources and extractive goods produced from mines, forests, and farms, which experienced a fall in demand.[28] The situation improved slightly with the start of World War II as aluminum production commenced in Spokane due to the area's cheap electricity (produced from regional dams) and the increased demand for airplanes.[28]

After decades of stagnation and slow growth, Spokane businessmen headed by King Cole formed Spokane Unlimited, an organization that sought to revitalize downtown Spokane.[29] Early but modest success came in the form of a new parking garage in 1965, The Parkade. Soon, focus to revitalize the economy focused on improving Havermale Island in downtown Spokane, which was dominated by railroad depots and warehouses. A recreation park that would showcase the Spokane falls was the preferred option, and the organization successfully negotiated with the railroad companies to free up the island property and relocate their rail lines.[30] In the 1970s, Spokane was approaching its one-hundredth birthday, and Spokane Unlimited hired a private firm to start preparations for a celebration and fair.[30] In a report delivered by the firm, the proposal of a world's fair was introduced, which culminated in Expo '74.

Economy diversification

The historic Schade Brewery

The growth witnessed in the late 1970s and early 1980s was interrupted by another U.S. recession in 1981, in which silver, timber, and farm prices dropped.[31] The period of decline for the city lasted into the 1990s and was also marked by a loss of many steady family-wage jobs in the manufacturing sector. Although this was a tough period, Spokane's economy had started to benefit from some measure of economic diversification; growing companies such as Key Tronic and other research, marketing, and assembly plants for technology companies helped lessen Spokane's dependence on natural resources.[31]

Mining, forestry, and agribusiness continue to be important to the local and regional economy, but Spokane's economy has diversified to include other industries, including the high-tech and biotech sectors.[31] Economic development in Spokane focuses on six industries: manufacturing, aerospace, health sciences, information technology, clean technology, and digital media.[32] Sizable companies with locations in the Spokane region include, BlueStar Technologies, Ciena, Cisco, F5 Networks, Goodrich Corporation, Honeywell, Itron, Kaiser Aluminum, Telect, and Triumph Composite Systems.[32] Spokane's downtown was the site of a 100-block wireless "HotZone" network—one of the largest of its kind in the country, which was seen as symbolic of its dedication to the development of technological opportunities and resources.[33][34] As of 2010, the HotZone was falling into disrepair[35] but local firms have stepped in to continue its operation.[36]

Regional services

SP 4449 south of Cheney, WA

With the arrival of the Northern Pacific Railroad in the late 19th century, Spokane became a transportation hub for the Inland Northwest region.[10] After the arrival of the Northern Pacific, the Union Pacific, Great Northern, and Chicago, Milwaukee, St. Paul and Pacific railroads, Spokane became one of the most important rail centers in the western United States, being the site of four transcontinental railroads.[10][37] Spokane became an important rail and shipping center because of its location between the Rocky Mountains and the Cascade Range and between mining and farming areas (namely the Silver Valley and the Palouse).[11] As a regional shipping center, the city furnished supplies to the miners who passed through on their way to mine in the Coeur d’Alene as well as the Colville and Kootenay districts.[5] Spokane is still a major railway junction for the BNSF Railway and the Union Pacific Railroad and is the western terminus for the Montana Rail Link.[38] Spokane, eastern Washington and northern Idaho are also served by air through the Spokane International Airport at Geiger Field (GEG). Spokane International Airport is the second largest airport in the state of Washington and is recognized by the Federal Aviation Administration as a small hub.[39]

As the metropolitan center of the Inland Northwest as well as southern British Columbia and Alberta, the city serves as a commercial, manufacturing, transportation, medical, shopping, and entertainment hub.[40][41] The city is also the hub for the service industries, and the wholesale and retail trade center of the 80,000 square miles (210,000 km2) Inland Northwest region.[32] In 2010, the Spokane metropolitan area had a gross metropolitan product of $19.48 billion.[42]

Due in part because Spokane is the largest city between Seattle and Minneapolis and because it lies along the route to many regional attractions, tourism is on the rise in the area.[43] Spokane can be a "base camp" for activities such as river rafting, camping, and other activities in the region.

Head offices

Spokane and its metropolitan area is the headquarters to some notable companies, such as Fortune 1000 company Potlatch Corporation, which operates as a real estate investment trust (REIT) and owns and manages timberlands located in Arkansas, Idaho, Minnesota, and Oregon,[44] financial services provider Sterling Savings Bank,[45] Also computer equipment manufacturer Key Tronic,[46] auto manufacturer Commuter Cars,[47] gold mining company Gold Reserve,[48] newspaper publisher Cowles Publishing Company and local utility, Avista Utilities have their head offices in Spokane. Advocacy groups and associations that have their main offices in the city include the business arm that administers the People to People Student Ambassador Program, Ambassadors Group,[49] and the American Exploration and Mining Association.[50]

Other company headquarters in the Spokane metropolitan area include the technology companies Itron and Telect in Liberty Lake, Washington,[51][52] computer game developer Cyan Worlds in Mead, Washington,[53] and retailer Mountain Gear in Spokane Valley, Washington.[54] Marine equipment manufacturer, EZ Loader Boat Trailers[55]

Leading industries

The Spokane Empire State Building

From 2005 to 2007, the leading industries in Spokane for the employed population 16 years and older were educational services, and health care, and social assistance, 25 percent, and retail trade, 12 percent.[56]

The top five employers in Spokane are the State of Washington, Spokane Public Schools, Providence Sacred Heart Medical Center and Children's Hospital, the 92d Air Refueling Wing, and Spokane County.[57] The health care industry is a large and increasingly important industry in Spokane, the city provides specialized care to many patients from the surrounding Inland Northwest and as far north as the Canadian border. According to the US Department of Labor, Bureau of Labor Statistics, Spokane ranked #4 in the country for metropolitan areas with the highest published employment concentrations and wages of this occupation.[58] Other industries include construction and mining, manufacturing, transportation, communication and networking utilities, finance, insurance, real estate, and government. Furthermore, all branches of the U.S. armed forces are represented in Spokane County. The largest military facility in the area is Fairchild Air Force Base.

Economic development

The local and state government are undertaking steps to develop the economy of the Spokane region. At the local level there is The Spokane Area Economic Development Council, which works with businesses to locate and utilize local and state business incentives. Also, advocating for regional economic growth in workforce, industry, manufacturing, public policy, and healthcare is Greater Spokane Incorporated, a joint organization consisting of the former Chamber of Commerce and the former Economic Development Council.[59] Innovate Washington, a business incubator seeks to help and develop Spokane companies for success.[60] In an effort to further attract companies, area community and business leaders created the "Terabyte Triangle", a sizable area downtown with high bandwidth fiber optic infrastructure in many buildings and wireless connectivity.[61]

A number of companies have located or relocated to the Spokane area, drawn by the easy access to raw materials and lower operating costs, such as cheap hydroelectric power.[62][63]

See also

References

  1. 1 2 Stratton (2005), p. 19
  2. ↑ Oldham, Kit (January 23, 2003). "The North West Company establishes Spokane House in 1810". Essay 5099. HistoryLink. Retrieved December 13, 2008.
  3. ↑ Phillips (1971), pp. 134–135
  4. ↑ Meinig (1993), p. 69
  5. 1 2 3 Stratton (2005), pp. 28
  6. ↑ Kensel (1969), pp. 88–89
  7. ↑ Kensel (1969), p. 85. According to the Spokane Falls Review December 1, 1883 edition.
  8. ↑ Kensel (1969), pp. 85–89
  9. ↑ Secretary of the Spokane chamber of commerce, John R. Reavis tells of Spokane's significance to the Inland Northwest region as a distributing center in his 1891 Annual Report, writing: "By reason of her geographical position and railroad connections Spokane is fitted as no other city is, or ever can be, to be the distributing center of all that country within a radius of 150 miles, and in some instances territory much farther away. There is no point 150 miles from Spokane that is not at least 225 miles from any other city of 10,000 population. We have about us a territory of 60,000 square miles in extent, to every point of which we are nearer than any other city, to every point of which we have better railroad connections and easier grades than any other city...Never was a city more intimately knit to its surrounding territory than Spokane, and never was one more free from a legitimate rival in trade... [Reavis, John R. (1892). First Annual Report of the Secretary of the Chamber of Commerce of Spokane for the Year 1891. Pacific Northwest Collections, University of Washington Libraries. Spokane, Washington: W. D. Knight. pp. 6–7, 10–12.]
  10. 1 2 3 Stratton (2005), pp. 32
  11. 1 2 Schmeltzer (1988), p. 41
  12. 1 2 Higgs, Robert (June 2, 2004). "Coasian Contracts in the Coeur d'Alene Mining District". Working Paper #52. The Independent Institute. Retrieved March 6, 2009.
  13. ↑ Arksey, Laura (2009-02-28). "Spokane Stock Exchange". Essay 8883. HistoryLink. Retrieved 2008-12-13.
  14. 1 2 Kensel (1968), p. 25
  15. ↑ Kensel (1968) p. 31
  16. ↑ Kensel p. 25–26
  17. ↑ Kensel (1968), p. 28–29, 31
  18. ↑ Durham (1912), p. 598
  19. ↑ In 1892, the Interstate Commerce Commission agreed with the city after it filed a complaint about these practices, but that decision was struck down by a federal court. In 1906, Spokane sued under the newly passed Hepburn Act, and won on July 24, 1911. (Durham, pp. 599–603)
  20. ↑ Kensel (1969), pp. 96–97
  21. ↑ Spokane Chamber of Commerce, c. 1920.Tourist’s Guide to Spokane and Environs. Pacific Northwest Collections, University of Washington Libraries. Spokane, Washington: Chamber of Commerce. pp. 2-3.
  22. ↑ Schmeltzer (1988) p. 93
  23. ↑ "Regional Wineries". Spokane Regional Convention & Visitors Bureau. Retrieved 2008-12-13.
  24. 1 2 Stratton (2005), p. 35
  25. ↑ Reider, Ross (June 22, 2005). "IWW formally begins Spokane free-speech fight on November 2, 1909". Essay 7357. HistoryLink. Retrieved December 19, 2008.
  26. 1 2 Stratton (2005), p. 152
  27. ↑ Stratton (2005), p. 35–36
  28. 1 2 Stratton (2005), p. 38
  29. ↑ Stratton (2005), pp. 211-212
  30. 1 2 Stratton (2005), pp. 215
  31. 1 2 3 Schmeltzer (1988), p. 87
  32. 1 2 3 "Spokane: Hub of the Inland Northwest" (PDF). Greater Spokane Incorporated. 2008. Retrieved 2008-12-16.
  33. ↑ "Spokane, Wash. - Wanted: Technology Companies". Best Places for Entrepreneurs. The McGraw-Hill Companies Inc. 2006. Retrieved 2009-03-04.
  34. ↑ Riley, Kate (2004-07-24). "New spunk, new mayor spur Inland Empire's capital". The Seattle Times Company. Retrieved 2009-02-04.
  35. ↑ "Spokane may drop free wireless Internet service", June 1, 2010. Spokesman-Review. http://www.spokesman.com/stories/2010/jun/01/hotzone-cooling-down/
  36. ↑ "Free Downtown Wi-Fi Returning", July 2, 2010. Spokesman-Review. http://www.spokesman.com/stories/2010/jul/02/in-brief-free-downtown-wi-fi-returning/
  37. ↑ Schmeltzer (1988), pp. 44
  38. ↑ "Hot Spots: Spokane, Wash.". Trains. Retrieved December 14, 2008.
  39. ↑ "Spokane International Airport". Spokane International Airport. Retrieved December 13, 2008.
  40. ↑ "About Spokane". City of Spokane. Retrieved 2008-12-14.
  41. ↑ Meyers, Jessica (2007-07-30). "Should Spokane learn to 'speak Canadian?'". The Spokesman-Review. Retrieved 2008-12-13.
  42. ↑ "GDP & Personal Income". United States Department of Commerce: Bureau of Economic Analysis. Retrieved October 30, 2014.
  43. ↑ Schmeltzer (1988), pp. 88
  44. ↑ "FAQs". Potlatch Corporation. Retrieved 2008-12-13.
  45. ↑ "Corporate Profile". Sterling Financial Corporation. Retrieved 2009-03-09.
  46. ↑ "Contact Us". Key Tronic. Retrieved 2009-02-06.
  47. ↑ "Contact us". Commuter Cars Corporation. Retrieved 2009-02-06.
  48. ↑ "Company". Gold Reserve, Inc. Retrieved 2009-02-28.
  49. ↑ "Contact". Ambassadors Group. Retrieved 2009-02-28.
  50. ↑ "American Exploration and Mining Association". American Exploration and Mining Association. Retrieved October 11, 2014.
  51. ↑ "About Itron". Itron. Retrieved 2009-01-12.
  52. ↑ "Contact Us". Telect, Inc. Retrieved 2009-02-24.
  53. ↑ "Cyan Worlds Profile". Cyan Worlds, Inc. Retrieved 2009-02-06.
  54. ↑ "About Mountain Gear". Mountain Gear, Inc. Retrieved 2009-02-06.
  55. ↑ "EZ Loader". EZ Loader Boat Trailers, Inc. Retrieved 2009-02-06.
  56. ↑ "American FactFinder". United States Census Bureau. Retrieved 2008-01-31.
  57. ↑ "Top Employers". Greater Spokane Incorporated. Retrieved November 10, 2011.
  58. ↑ "Healthcare". Greater Spokane, Incorporated. Retrieved 2009-02-10.
  59. ↑ "About Us". Greater Spokane Incorporated. Retrieved 2008-12-14.
  60. ↑ "Innovate Washington". Innovate Washington. Retrieved September 13, 2014.
  61. ↑ Harrell, Lisa (June 29, 2001). "Rating the terabyte triangle". Spokane Journal of Business. Retrieved September 24, 2014.
  62. ↑ Tatge, Mark (2007-04-23). "Paradise, Slightly Dry". Best Places. Forbes.com LLC. Retrieved 2009-02-10.
  63. ↑ Lydgate, Chris (May 2006). "The Buck Stopped Here". Mansueto Ventures LLC. Retrieved 2009-02-10.

Bibliography

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