Snohomish County Executive Aaron Reardon, whose county is home to Boeing's Everett factory, advises the Washington Legislature on how not to lose the next big economic competition. The former Democratic state senator says getting the economy on track should be the No. 1 priority
AS Washington struggles through the worst economic downturn since the Great Depression, Boeing’s decision to send the second 787 production line to South Carolina was another blow we did not need.
Washington state must make a conscious decision to aggressively compete and grow our economy or risk more job losses. The path to recovery begins with the recognition that we have a problem: Washington is a very high-cost state and is not competitive.
Step one: End the blame game. Washington state has a rich history of innovation and our economic success is because of the historic partnerships between labor and business. Moreover, our independent, Northwestern identity has always allowed for balance in our politics. Traditionally, our goals have been rooted in our enduring values of hard work, community and opportunity. Today, our state’s political environment looks more like the Potomac than the Puget Sound. The finger-pointing is counterproductive and does nothing to further our objective to grow our economy.
Step two: Finish what we start. In 2003, when we competed for the “7e7” we embraced the mantra of “not losing Boeing on my watch.” We assessed our strengths and weaknesses, we identified the pros and cons of doing business in Washington, and we eliminated barriers while increasing opportunities for competition. A Democratic former governor worked hand in glove with the Democrats and Republicans in the Legislature to make Washington the winner in a national competition.
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This victory was the result of partnership taking precedence over partisanship, including a unified Boeing and International Association of Machinists. Between 2004 and 2008, we created nearly 23,000 new aerospace jobs throughout the state of Washington. Unfortunately, the changes and pledges made in 2003 to make Washington competitive enough to land the initial 787 were not continued:
• Changes made in 2003 to reduce Washington’s unemployment insurance costs were repealed in 2005.
• Changes identified to reduce Washington’s workers’ compensation costs were never acted upon.
• Needed investments in work-force training never took place.
In addition, a hyperpartisan political culture swept through Olympia, keeping lawmakers locked in a state of paralysis, denial and blame.
Step three: Know the rules of the game. Policymakers need to accept that we are engaged in a national and in many ways a global competition to attract capital investment and jobs. The cost of doing business and how Washington compares with other states matters.
Critics claim this approach is a race to the bottom. Amazon, Dendreon and Microsoft are headquartered here, yet each has made decisions to locate facilities and jobs elsewhere after considering Washington’s cost of doing business. Combine that with the number of jobs our state has lost in recent years, the location of Boeing’s second 787 assembly line, and it’s obvious that Washington is already a participant in that race.
Let’s be clear: The goal is not to be the lowest-cost state in the country. However, we must make certain Washington is not the most expensive. We can’t afford to be the outlier that is disqualified from consideration because policymakers just don’t get it. Policymakers must remember that our focus on creating a competitive state is not for the sole purpose of helping business, but for the purpose of creating good jobs for our citizens and tax revenues to support our government services.
Step four: Play as a team and play to win. Washington state does not have a unified commitment to competitiveness and economic development. That fact became painfully obvious in the partisan rhetoric following the release of the governor’s 2010 supplemental budget.
Democrats criticized Republicans because they oppose increasing taxes to fund needed services while Republicans criticized Democrats for arguing against further spending cuts. Neither side is talking about the need for economic development. The No. 1 priority in Olympia must be getting this economy back on track. Creating new jobs and growing the economy is the most effective means to increase tax revenues and decrease the demand for government services.
The loss of the second Boeing 787 line is a symptom of the greater problem. It is the proverbial “canary in the coal mine.” Washington has fallen off the map when it comes to economic development. Olympia cannot remain paralyzed by the enormity of the challenges we face. Changes must be made to compete for and win new jobs.
This session, the Legislature and governor must signal a greater commitment to economic development. They must:
• Make sure Washington is in the middle of state costs for Labor & Industries, Employment Security and other areas;
• Enact reasonable tax exemptions for new-economy jobs;
• Maintain state investments in education and higher education;
• Commit more of the governor’s time to making it happen.
How many good-paying jobs with benefits do we have to lose before we decide to change?
Aaron Reardon is the executive for Snohomish County, home of Boeing’s Everett factory. During the state’s efforts to secure the Boeing 7e7 in 2003, he was a state senator representing the 38th Legislative District.