Amazon.com just tip of Seattle boom

Seattle is living, celebrating and backlashing against the Amazon Boom.

In this boom-and-bust city, it’s always tempting to assign one cause to a historic upswing. Sometimes it’s even true: the boom after the Great Seattle Fire, Klondike Gold Rush boom, Boeing booms (and busts).

Humans respond to shorthand. We look for a simple cause to credit or blame. This can be especially profitable for politicians.

And make no mistake: This is one for the history books.

Seedy, sleepy South Lake Union transformed into a pathbreaking urban-technology campus. Forests of new skyscrapers. King County and Seattle turning in some of the top population growth in the country.

As of February, total nonfarm employment for the Seattle-Bellevue-Everett metropolitan division reached nearly 1.6 million, a record. The velocity is as impressive as the late 1990s, although it hasn’t run as long (yet).

I suspect that much more is behind this than Jeff Bezos’ big baby.

In slow-growth America, the relatively small number of surging large metropolitan areas are benefiting from a complex set of forces, and most of them are happening far above the level of municipal or state policy.

Begin with recent history. Although Seattle lost Washington Mutual, it weathered the worst downturn since the Great Depression with its diverse economy intact and ready to catch the unusual recovery that followed.

For example, almost all the metro’s large companies enjoyed excellent balance sheets and massive amounts of cash on hand. These giants don’t just support employment and small-business vendors, but they have also benefited from a bull market pushing up their stock prices.

Unlike so many Sun Belt regions, ours was not overly dependent on single-family- house construction. The downturn was cushioned by continued demand for workers at Boeing and its contractors.

Thanks to the Federal Reserve’s easy-money policies, the post-recession world was flooded with capital. Investors were searching for yield in a very low-interest-rate world. They came to the most promising places, including Seattle.

This abundance of capital wasn’t limited to its most visible totems, high-rise apartments. With Seattle seen as one of the world’s top locations for startups, angel and venture capital streamed in.

The tilt of the recovery toward the very rich acts as an accelerant. Seattle’s median household income was $65,277 in 2013 compared with a national average of $53,046. In Redmond, it was $96,183.

Some of the beneficiaries of this wealth are no doubt toffs living off their rents and voting with the Koch brothers. But a substantial number are using their gains from the stock boom to reinvest in an attractive local economy.

Don’t forget China. Although its economy has been slowing, China is Washington’s largest export destination, and merchandise trade has kept growing. Boeing expects China to become its largest customer for commercial airplanes.

Wealthier Chinese are investing in houses here, especially on the Eastside, and Chinese capital is helping fuel construction. Online giant Alibaba is recruiting here and may pick Seattle for its U.S. headquarters.

Another factor: Seattle is cheaper than the Bay Area.

Cheap will only get you so far. But we attract an abundance of top talent from around the world, not least thanks to the well-regarded computer-science program at the University of Washington.

Seattle also has assets the young techies want: a vibrant downtown, authentic in-city neighborhoods, tolerance and closeness to nature in a spectacular natural setting.

As a result, Seattle and its most livable suburbs are attracting a who’s who of Silicon Valley and San Francisco, including Facebook, Google and Apple. This cost differential is one of the most important stealth drivers of today’s boom.

Finally, Seattle is among the elite “technopolis” metros at a time when tech-company valuations are astronomical and the now quaint-sounding term “high-tech” drives every industry.

Twenty-first century America so far lacks revolutions such as the steam locomotive, electricity or the automobile that also provide abundant employment and higher living standards.

Instead, economists worry about the continued lackluster growth in the U.S. economy and hole in demand that remains from the recession. “Secular stagnation,” in other words a structural, long-term problem that won’t be fixed by the business cycle, has been popularized by former Treasury Secretary Larry Summers.

Back to places such as Seattle: They are best positioned to benefit from evolutions off previous breakthroughs. Software to smartphones and tablets to cloud computing, etc. Metros at the front of this chain of value will benefit in otherwise tough times.

Of course, Amazon is a huge force. But it’s hardly the only one. Millions of decisions by investors, hedge funds, private equity, shareholders, top executives, site-selection experts, young STEM hotshots, empty-nest boomers and more are at work. And Seattle is at the right place at the right time.

This success doesn’t fix inequality or rebuild the middle class. It arguably makes the situation worse. Yet a less prosperous city would not risk the $15 minimum wage.

As with this Seattle boom, the causes of the American socio-economic crisis are diverse.

And you know which one will end first.