In contrast to state and national trends, household median income in Spokane County fell last year, says online data compiled by the Community Indicators of Spokane Initiative.

Whether the decrease is statistically significant remains to be seen, says Patrick Jones, executive director of Eastern Washington University’s Institute for Public Policy and Economic Analysis. 

Countywide annual median household income in 2015 was $48,525, a 3.5 percent decrease compared with $50,249 the prior year. However, median income was up both statewide and nationally, increasing by 4.5 percent and 3.9 percent, respectively. 

The Institute for Public Policy and Economic Analysis leads the Community Indicators of Spokane Initiative, a resource that collects data from various sources for community and economic trends, including income, economic activity, real estate, labor force, and poverty. 

Median household income is the middle point of income for families in a geographical area, meaning half of the families in the area have income higher than the middle point and half have less.

Jones says there are three factors to consider that can affect changes in median income data: wage income, transfer  payments, and investment income. 

Transfer payments include Social Security, government subsidies, and other federally funded benefits. Investment income includes investment payments, dividends, capital gains, and other profit made through investments.

Wage income was up 3.3 percent in Spokane County last year over 2014, Jones says, so “we could assume one or both of the other factors didn’t increase, or have decreased relative to 2014.” 

Additional factors to consider are a possible decline in the number of hours worked by members within each household, or a lack of new jobs being created in the area, Jones says.

“This year, we didn’t add as many workers to the total payroll in the county as we did statewide,” he says. “Data shows we only created about 250 new net jobs, and for the size of our economy, with a total of over 200,000 jobs, that’s a small number. It could be a significant reason for the decrease in median income.”

Jones says that because median income is based on census survey data, there is a certain margin of error, but it is still the preferred indicator of economic health in the area. 

“When you’re dealing with areas that have high-earning outliers, the median is still the most typical indicator how the community is doing because it avoids the influence of those outliers.”

He says the changes are large enough this time that they can be considered outside Spokane County’s margin of error (plus or minus $1,500), which would mean they’re statistically different from 2014.

For the second year in a row, median household income in the city of Spokane rose at a higher rate last year than the overall county.  Median household income in the city of Spokane for 2015 was $44,350, up 1.5 percent from a year earlier. 

Comparatively, median household income in the city of Spokane Valley fell in 2015 for the third straight year, although it had been consistently higher than in the city of Spokane over the past decade. 

In 2015, the median household income in Spokane Valley was $43,296, down 5.4 percent from a year earlier.

Jones says this could be due to several factors. There could be fewer people working in Spokane Valley, or growth of wages simply could be higher in the city than in Spokane Valley. 

“We don’t know for certain, but if you look at the data on highest-paying jobs in the community, the city of Spokane does tend to have a larger number of jobs in those sectors.” 

Data show the four top-earning sectors in the area to be manufacturing, government, health care, and retail. 

While wages in health care went up considerably in the last year, the remaining categories showed only slight increases.

Jones says this could contribute to Spokane Valley’s lower median household income, as proportionally that area has more manufacturing and retail jobs, while the city of Spokane has a higher concentration of health care, government, and high-paying professional and tech services jobs. 

“Median household income is going to depend on what kind of economic activity is in your mix as a city,” says Jones. 

He says the outer ring of the city, including some parts of southern Spokane Valley, Colbert, Five Mile, and the far South Hill, tend to be among the highest income-earning ZIP codes. 

The decrease in Spokane County household income again places it below the $50,000 mark, and well below the state and national median household incomes, which—as mentioned earlier—both increased again last year. Statewide, annual median household income was $64,129 in 2015, while the U.S. median household income was $55,775.

Doug Tweedy, Spokane-based regional economist with the Washington state Employment Security Department, says the margin of error could be affecting county data on median household income.

“At the national level and state levels, you have a greater sample size with a lower error rate. As you get down to the county level, that error rate increases,” he says. 

Tweedy says overall it’s still unclear what other factors may be causing the Spokane-area decrease in median household income.

“When we talk about median household income, wages account for 58 percent, investments 20 percent, and transfer payments 22 percent,” he says. 

“What we do know right now from county businesses is that jobs and total payroll are both up. We’ll have to take a closer look at the 2015 decrease to be able to determine what data set is affecting it.”

Data show that the Spokane County annual average unemployment rate was 6.4 percent in 2015, down from 6.9 the prior year. 

Tweedy says the average unemployment rate is continuing to trend downward slightly, with the first eight months of 2016 showing a 6.6 percent unemployment rate, compared to 6.7 percent for the same period last year.