Nix the minimum-wage hike
Joseph Phillips, Dean, Albers School of Business and Economics, Seattle University
I am skeptical that state government can do much to jump-start employment in the short run. Given the current state budget, there are not many tools available, and the role of the state is to create an environment that supports job growth over the long term.
My idea is to kill the 37-cent increase in the minimum wage, which took effect January 1 and raised it to $9.04 per hour. Wow! How can the dean of the business school at a Jesuit university recommend such a thing? What about social justice?
Well, Washington has the highest minimum wage in the nation, well above the federal minimum wage of $7.25 per hour. Number two in the nation is Oregon, with a minimum wage of $8.80. Washington employers have already seen healthy increases in unemployment insurance premiums, health care costs and workers’ compensation. At some point, it adds up and discourages employment. We need a minimum-wage law, but set it too high and it stops helping those it is designed to help.
Find common ground
Phil Bussey, President and CEO, Seattle Metropolitan Chamber of Commerce
For the past year, representatives from a diverse set of regional constituencies have been working to find common ground around job creation and economic development. They don’t always see eye to eye, yet they have agreed to a shared vision for sustainable prosperity and have committed to nine actions.
Their agenda includes no-brainers such as supporting Washington’s bid for the Boeing 737 MAX. Aerospace is vital to our state economy. We can and must do all we can to grow this vital industry.
At the same time, participants have agreed to tackle some of the region’s most insoluble issues, like breaking down the infamous “Cascade Curtain” and putting a price on process. They’ll advance new measures, such as making multiculturalism visible and prominent; creating a strategy to expand our role as “America’s global city,” and deploying a regional pride campaign.
Keep aerospace strong
J. Tayloe Washburn, Co-chair, Washington Aerospace Partnership
Boeing announced in June 2011 that it will build a new airplane, the 737 MAX, but until recently it had not said where the company will build it. This “unknown” represented one of our most serious economic challenges in many generations. Washington state is fortunate that Boeing decided in November to build the MAX in Renton. Still, we must recognize the size of this opportunity, what’s at risk and take steps to make a compelling business case to keep the MAX and future Boeing models here. While Boeing resolved its issues with the Machinists union and committed to building the MAX in Renton, Washington state must take the steps to keep and grow its aerospace cluster and the tens of thousands of jobs it generates.
Aerospace manufacturing is a part of the DNA of Washington state. We do it better than anywhere else in the country. Yet we face intense competition from other states that want what we have. Washington has taken and will take swift, bold action to ensure we land the 737 MAX line.
During excruciating economic times, the governor spent her entire allotment of Workforce Investment Funds—$3 million in all—to enhance our aerospace training programs to ensure that Boeing and our 650 aerospace suppliers have the trained workforce needed to be successful, and also continued to fund more than $20 million in core aerospace training in our community and technical colleges. We need to “grow” more engineers and trained machinists right here in Washington. We all have a stake in this decision, which is much bigger than the 737 MAX. It’s about the future of a diverse and strong Washington economy.
Finance small business
Howard Schultz, Chairman and CEO, Starbucks
Waiting for Washington, D.C., to act is not a plan of action. Create Jobs for USA will help our country and our economy by pooling contributions from Starbucks customers and partners, and channeling 100 percent of the money raised into a nationwide fund to support small-business lending. It starts with the premise that we can help put Americans back to work if we thaw frozen channels of credit.
Create Jobs for USA is not charity. It is a peer-to-peer job creation initiative that will draw its power from millions of Americans who come to Starbucks every day for community and coffee. Every customer who contributes $5 or more to the fund receives a limited-edition wristband with the word “indivisible” on the clasp, demonstrating that we’re all in this together. Starbucks is partnering with the Opportunity Finance Network, a nationally recognized nonprofit organization, to make sure that all funds raised are directed to businesses and organizations that will hire in local communities across America. The Starbucks Foundation is seeding the fund with $5 million.
It’s time to remember that there is no greater force than the will of the American people. Let’s pull together. Let’s pull our neighbors, our friends and our fellow Americans into opportunity with us.
Excerpted from Howard Schultz’s Letters to America.
Say yes to infrastructure
Grant Degginger, Shareholder, Lane Powell PC
1. Make tax increment financing available in Washington.
Tax increment financing (TIF) is a method of using future property tax collections within a designated area to pay for infrastructure improvements necessary for new development. Washington is one of only a handful of states that do not have TIF in their economic development toolboxes.
The Legislature should authorize a robust TIF program—with meaningful participation by the state—to help local governments attract new investment. To date, the Legislature has authorized pilot projects with limited state financial commitments. It’s time for Washington to get in the game and use this time-tested method of delivering the infrastructure necessary to attract major job-creating investments.
2. Deliver a statewide transportation package.
Mobility for people and freight is crucial to attracting and keeping jobs. Washington has major unmet transportation needs, particularly in the state’s urban corridors. The gas tax is not indexed for inflation. Collections continue to decline with the advent of more fuel-efficient cars, electric vehicles and changes in commuting patterns. We must reach a consensus on transportation priorities and agree upon a finance package to promptly deliver the projects, including mass transit.
Use tax incentives
James Jiambalvo, Dean, Michael G. Foster School of Business, University of Washington
Employment in Washington state will increase if the demand for labor increases. To stimulate demand, I recommend the use of major tax incentives to attract strategic businesses to our state. A strategic business is one that’s a better fit with our state than others such as Mississippi and South Carolina that are already offering tax incentives. Enterprise Seattle is focused on information technology, aerospace, life sciences, international trade/logistics and clean technologies.
That’s a great list to focus on. All of these industries take strategic advantage of our location, our infrastructure, and the expertise of our current businesses and our major universities. It’s time for our state to put out the welcome mat with tax incentives that make us hypercompetitive. Don’t think it can’t be done. Consider that Utah was able to persuade Goldman Sachs to expand its operations to Salt Lake City in 2000. The office is now the company’s second-largest in North America! Goldman Sachs in Utah?
Inspiring, isn’t it?
Don’t forget tourism
Christine Masse, Partner, Miller Nash LLP
With Washington possessing natural beauty and a world-class metropolitan hub, it’s no surprise that tourism is the state’s fourth-largest export industry. Tourism is absolutely crucial to our economy, providing 3.8 percent of all jobs in Washington. Annually, visitors here spend $14.2 billion, and the hospitality industry generates $4.3 billion in payroll earnings and $1 billion in state and local tax revenue.
Last February, however, the Washington State Tourism Commission closed because of budget cuts. In its place, a consortium of industry leaders developed the Washington Tourism Alliance (WTA) with the goal of taking over a number of the commission’s former activities. Together with the WTA, Washington’s business and political leaders must make a concerted effort to promote the endless travel opportunities within the state to provide additional income to local businesses, generate tax revenues for the state and help in the creation of new jobs.
These efforts should focus not only on foreign visitors—many of whom know little about the state outside Seattle—but also on domestic travelers. There are immense opportunities right now to woo people who, in better economic times, might otherwise travel farther afield. Washington’s hospitality industry fits every travel budget, activity and interest.
By recognizing the importance of hospitality in our state, business and political leaders will play a vital role in giving it the economic and legislative attention it deserves.
Boost small-business exports
Rick Larsen, U.S. Representative, 2nd Congressional District
A great way to create jobs in Washington state is to help our small businesses export their products overseas. Approximately one in three jobs in Washington is tied to foreign exports. That’s why I recently established a District Export Promotion Program (425.252.3188) to help link small businesses with local, state and federal resources that will help them sell their products in other countries. My office assists small businesses in connecting with agency trade specialists and with district export experts who can answer their questions and evaluate their proposals. We also work with the U.S. Commercial Service, the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration, and with private industry partners to conduct export training seminars for small businesses.
I recently was able to connect a local wood-products company with the appropriate federal agencies and industry organizations to resolve a labeling dispute for its products entering the Canadian market. Not only did the product make it to Canada, but the company is also now working with its new contacts to ensure that future sales are shipped on its own trucks instead of through a foreign shipping company, providing for even more Washington-based jobs.
I am committed to helping small businesses export their products—not their jobs—overseas.
Make buildings greener
Brian Geller, Executive Director, Seattle 2030 District
The Seattle 2030 District is America’s first high-performance building district, a new public/private partnership combining 21st-century technology and old-fashioned relationships with a goal of increasing sustainability in buildings, which account for roughly half of all U.S. energy use. A great byproduct of this effort will be more jobs and a more vital downtown Seattle.
Architects, engineering companies and property owners representing 23 million square feet of building space in downtown Seattle have set targets for reducing energy use, water use and transportation emissions dramatically by the year 2030. Meeting these targets will require some landlords to make significant investments to upgrade their buildings, including such things as heating and air conditioning, thereby generating new jobs even as they improve efficiency. The new efficiencies will help to increase the profitability of the buildings while also boosting their value.
Progress toward these goals will be tracked on an online dashboard that will aggregate results across 1,159 properties, and details will be shared on how successful landlords reached the targets. Seattle 2030 District members receive discounts of up to 35 percent on building equipment purchases. The District will help attract new tenants who want to be associated with the city’s cutting-edge “green” credentials. This represents a new economic model for the building industry in which direct competitors work together to achieve the common goal of creating a downtown Seattle that is the national leader in sustainability.
Support postsecondary education
Elson Floyd, President, Washington State University
With most of our fastest-growing industries requiring skilled workers with postsecondary credentials, by 2018, an estimated 67 percent of all jobs in Washington will require some postsecondary education. States with higher levels of educational attainment have the best opportunity to capture those jobs. Unfortunately, here in Washington, our state allocations for higher education are falling while tuition levels are rising. We run the risk of making colleges and universities inaccessible to more and more students. So where will those graduates come from? What will be the social impact if Washingtonians do not have access to the education they need? Will businesses decide to leave Washington to move closer to where the qualified workers live?
If we do not educate the workforce of the future here, we risk losing industry to other states that rise to that challenge. And that will have a dramatic impact on our state’s quality of life. We are on the verge of dismantling a public higher education system that has been carefully built by generations of Washingtonians. Washington cannot afford this level of disinvestment in the future of our state.
Excerpted from a speech given on November 1, 2011.
Show some backbone
Jim McDermott, U.S. Representative, 7th Congressional District
The country is focused on jobs and the United States’ competitive position, but there is a real difference of opinion across the country on what path to take. Some argue that the best way to create jobs is to eliminate taxes and regulations and to focus solely on reducing the deficit. I don’t agree and I don’t think history does, either.
While the deficit needs serious attention, a balanced budget and smaller government won’t create jobs. We are in a short-, medium- and long-term crisis on the jobs front. The unemployment rate in Washington is 9.3 percent. Across the nation, nearly 14 million people are out of work. Even people with jobs don’t have much money to spend; over the past 30 years, median wages have barely outpaced inflation.
Without demand, businesses are sitting on record amounts of cash; they won’t spend unless it’s a good investment. So, what’s the solution? We should do what we did when we were most successful in the past, such as in the period of investment following World War II. We need to invest in education and infrastructure and work to fix the housing market. These investments will pay off enormously. A downturn, even a severe one, is not the time to be timid. It is exactly the time when we should invest in people and the future.