Nearly five years after the start of the Great Recession, we are finally seeing the job market starting to recover. Private sector employers are cautiously adding jobs, and the technology and manufacturing sectors in particular continue to show strength. After several years of free-fall, state revenue projections are holding steady and demand for state services is actually lower than previously expected. These early signs of recovery are accompanied by predictions that Washington’s economy and job outlook should improve faster than in many other states.
But it’s certainly not time to pop the champagne. Economists have warned that job growth will come slowly, and so far they’ve been right. Neither consumers nor businesses have recaptured their pre-recession sense of optimism, nor should we expect them to anytime soon.
As our state takes its first tenuous steps toward economic recovery, now is an especially good time to thoughtfully consider the actions we should take to build a better Washington.
A year ago the Washington Roundtable — a group of senior business executives from across the state — began asking some important questions: What does a better Washington look like? What do we have to do to create it? How do we measure progress?
Our answer: A better Washington is marked by high quality of life — a state that boasts great schools, provides a safe and efficient transportation system, encourages innovation and offers excellent job opportunities. A better Washington is also a state where employers can grow and compete in the global economy.
The last five years have clearly demonstrated that Washington can’t take its economic or community vitality for granted. Instead, we must develop and embrace a common vision for our future. Without this clear understanding of where we’re going, good jobs won’t come back, too many kids won’t get the education they deserve, and long overdue investments in infrastructure won’t be realized.
That’s why the Roundtable introduced a set of 12 measures — the “Benchmarks for a Better Washington” — to help define and track our progress in making Washington a top 10 state for quality of life and innovation, while simultaneously ensuring it is not one of the most expensive for business. The yin and yang of that vision is significant: Quality and cost are equally important.
Quality of life indicators identified include private sector job growth, patents issued, high school graduation rates, student performance in math and science, bachelor’s degrees awarded, road and bridge quality, and commute times. Washington should strive to become a top 10 state in every category.
The indicators on the business cost side of the coin include electrical rates, business tax burden, unemployment insurance costs and workers’ compensation. In these areas, Washington should strive to ensure it is not among the most expensive states in any category.
Those of us who live and work here know Washington boasts many advantages. Our electric rates are the lowest in the nation. Our state is a leader in patent generation (ranking fifth nationally) and private sector job growth (ranking eighth). Our innovation-driven economy continues to produce results.
Although our state still ranks among the 10 states with the highest unemployment insurance rates and most expensive workers’ compensation benefits, reforms enacted in 2011 should improve our position in both categories over the next couple years.
But our rankings in other important areas remain disappointing or have slipped relative to other states over the past year.
Most notably, Washington’s education system does not yet compare well against other states. According to the U.S. Department of Education, Washington’s 2009 high school graduation rate was 73.7 percent, ranking 37th nationally. The more important number: 22,000 students in that class did not make it to graduation.
In 2011, 40 percent of Washington’s 8th graders scored at or above proficient on the math portion of the National Assessment of Educational Progress (the “nation’s report card”), ranking Washington in a four-way tie for 12th.
There is also cause for concern in higher education. Despite having one of the most innovation-dependent economies in the nation, our state remains 38th in bachelor’s degrees awarded per capita. It’s estimated that in six years at least 67 percent of new family wage jobs in Washington will require postsecondary education. But less than a third of young adults, ages 25-34, hold a bachelor’s degree. Our students will need better preparation and more access to postsecondary education in order to take advantage of good job opportunities.
The business community is committed to pursuing this vision for a better Washington by supporting sound public policies and making strategic investments.
We actively supported legislation this year to improve our state’s K-12 educator evaluation system. Thanks to hard work by lawmakers from both parties, Washington now has a better system to ensure that the most effective educators are in our classrooms and those struggling get the support they need to improve.
We also have worked closely with educators, parents and community leaders to develop A+ Washington, a comprehensive plan to transform public education in our state. This plan takes bold ideas — great teachers for every student, support and flexibility for teachers, new tools to hold schools accountable for results, and expanded opportunities for all students — and translates them into clear action steps.
Businesses are putting their money where their mouths are by funding Washington STEM, a nonprofit organization to drive improvements in student achievement in science, technology, engineering and math. Washington STEM has already committed more than $2 million in grants, reaching more than 500 teachers and 16,000 students statewide.
Employers also are investing in higher education. Shrinking state support has driven Washington’s public colleges and universities to raise tuition significantly in recent years. To help mitigate the impact on students, we supported development of a new endowment to provide more financial aid for students from low- and middle-income families. Microsoft and Boeing committed a combined $50 million to the endowment and the goal is to raise $1 billion by 2020.
Results are already being seen. This month some 3,000 students across the state will be notified that they will receive Washington State Opportunity Scholarships for the 2012-13 academic year.
Beyond education, local businesses are actively engaged in efforts to help the state improve its roads and bridges and reduce commute times. Business representatives played an active role in Gov. Chris Gregoire’s “Connecting Washington” task force and we are leading a coalition focused on securing new, long-term investment in our statewide transportation system.
The benchmarks represent the business community’s thinking on a balanced agenda to help move our state forward. We’ve laid out some goals and we remain committed to making them a reality. We recognize others have good ideas to bring to the table as well. Our hope is that a clear vision for our state’s future will spark collaborative efforts to build the better Washington we all want.
We are not there yet. More hard work is needed to catch up, keep up and move ahead. If Washington can achieve these goals, it will not only lead the nation out of recession, but also emerge as a state with expanded opportunity for all its citizens. The ball is in our court.
About the authors
Dean Allen is the chief executive officer of McKinstry and chair of the Washington Roundtable, a nonprofit, public policy organization composed of chief executives representing major private sector employers throughout Washington.
Brad Smith is general counsel and executive vice president for Microsoft. He serves on the Washington Roundtable’s executive committee.
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