Seattle: Boom days are over

Seattle..coffee, dot.coms, and Boeing

by Janet Williams in Seattle

The volunteers at Northwest Harvest foodbank, in the shadow of Seattle's city centre skyscrapers, are on constant alert.

All day, they scan the anxious faces of those filing by to pick up their food parcels, on the lookout for anyone who looks hesitant, out-of-place - or unexpectedly well-groomed and smartly dressed.

"I've asked our staff not to assume that someone who looks like a donor, is a donor", says the organisation's Executive Director Shelley Rotondo, whose office overlooks the converted gymnasium where the donated food is stacked on counters.

We're seeing more and more people here for the first time

Shelley Rotondo, Harvest Foodbank

"We're seeing more and more people here for the first time, and it's important that we make them feel comfortable."

Fading boom

It's all a far cry from the heady days of the late 1990s, when the Seattle dot.coms made some into millionaires, and held out the promise of vast riches to many.

Thousands flocked to the region, attracted by high salaries and the natural beauty of the Pacific Northwest.

Massive layoffs loom at Boeing as aircraft sales slump

The city featured on the front cover of Fortune Magazine as a beacon for business.

Now the roads are congested, and the front page of the Seattle Post-Intelligencer, a daily newspaper, features a series of articles under the banner "Northwest in Recession."

It's certainly not the image of Seattle - prosperous, coffee capital of the world - as portrayed in the popular US comedy programme "Frasier".

By early 2001, the dot-coms were crashing. And then came September 11th. Few places suffered more of the financial fall-out than Seattle. Air travel slumped.

After September eleventh, it's hard to find an industry that hasn't been affected

Connie Kelliher, Machinists Union

And in response, the Seattle-based Boeing Commercial Airplanes Group announced it would lay off one-third of its workforce nationwide. In the Seattle region, that could mean redundancy notices for up to 20,000 people.

The unions are angry, believing the company is cutting too fast and too deep.

Connie Kelliher, spokesperson for the local branch of the Machinists Union, says morale among the workers is probably near a near-time low. "They don't feel there's any loyalty coming back, or any commitment to them from the company. All of them are kind of waiting for the other shoe to drop - thinking, am I going to be the one that gets the pink slip this week?"

The union provides retraining for those who are made redundant.

But life outside Boeing is not easy. "The hard part is, what do you point them to. It's a very, very hard job market right now. Usually in the downturns, it's only Boeing. But this time, after September eleventh, it's hard to find an industry that hasn't been affected." The job market is difficult for all.

The number of those who have already hit rock-bottom, and have turned to Northwest Harvest's foodbanks state-wide, has gone up more than ten percent over the last year. Ms. Rotondo believes the centres are an excellent financial barometre:

"We're like the canary in the coal mine. The foodbanks are the non-governmental agency that people turn to most in time of need."

High unemployment

The pressure on the centre's resources is likely to continue to increase.

The unemployment rate in Washington State is the second-highest in the country (after Oregon) - running at 7.1%.

State economists predict that, when the Boeing lay-offs filter into the statistics, that rate will rise to over 8%.

The recession here, they say, will be deeper and last longer than in the rest of the United States.

Nowadays, Seattle is no longer so dependent on the Boeing Company for employment.

Boeing bust

During the famous "Boeing bust" of the early 1970s - when the company laid off 64,000 people - it employed almost 19% of the region's workers. The effect was devastating. Today, Boeing provides 3.7% of the area's jobs.

But a downturn at the company known as the "Lazy B" still ripples through the local economy.

Sub-contractors and suppliers cut overtime, and let workers go. Fewer people can afford to eat out at restaurants. In turn, the restaurants buy less from their suppliers, and release dishwashers and waiters. One or two of those might well end up in the lines outside Northwest Harvest.

Ripple effect

And suddenly, everyone stops spending on luxuries. On Broadway, a shopping street running along edge of Seattle city centre, signs are appearing announcing 'Lease for Sale' or 'Closing Down Liquidation'.

"Everything took a nosedive after September the eleventh", said one young sales-clerk at a funky party-shop. "Only the basic-needs stores are making it along here. Seattle is a hard time right now, especially for people my age. I'm heading back to the Midwest."

Small specialty shops are not the only ones feeling the pinch. Christmas sales were slow throughout the city, and department stores have been running spectacular sales for months.

Microsoft prospers

But not all is doom and gloom.

Microsoft, despite its legal battles, continues to recruit and pay high wages.

The online retailer Amazon.com this week announced its first quarterly net profit.

The bio-technology industry is doing well - though it's still a relatively small-scale employer.

And Seattleites still love their coffee.

At the Hi-Spot Cafe in Madrona, Eric Houghton is busy all day dispensing tall lattes, moccas and double expressos. "It's true that everyone knows someone who's been laid off", he says. But we're still busy - even people from the East Coast come and seek us out, we're that popular."