By Richard S. Davis
Nearly 17 percent of the state’s workforce — one in six of us — is either unemployed or underemployed. So much for the recovery.
Nationally, it’s one in seven, about 15 percent. That’s according to the most recent quarterly report from the Bureau of Labor Statistics. The official unemployment rate reports total unemployed as a share of the civilian labor force. The broader measure cited above (U-6 in BLS speak) adds in the number of people working part-time for economic reasons, discouraged and “marginally attached” workers who are ready and available for work, had looked for employment in the last year but, for whatever reason, not in the last four weeks.
Bad as that is, it understates the problem because it doesn’t account for the shrinking of the workforce as older job seekers drop out altogether.
A variety of factors may explain the high underemployment here. People often move to attractive regions without a job and accept part-time employment until something better comes along. Seattle still retains a cool factor. Some who come with a job will be accompanied by a partner without one. Seasonal patterns play a role. Newer to this recession is the plight of recent graduates poured into an economy without room for them; they often stick around in part-time jobs they once viewed as temporary.
Here’s the jobs record. Although the state has added 115,000 jobs since the recession’s low, we’re still nearly 91,000 below the pre-recession peak.
Gov. Jay Inslee said in his inaugural address, “Our top priority today, tomorrow, and every day for the next four years, is jobs.”
Last week, he released a jobs plan. He emphasizes STEM (science, technology, engineering and math) education, targeted tax credits for start-ups and high-growth industries. Still short on specifics, the plan continues Inslee’s campaign concentration on key industries, including: aerospace, life sciences, clean energy and technology. Even if he’s identified the right clusters, the success of any given business within the sector is uncertain. Which is why analysts often warn against plans that have government picking winners and shunning losers.
Although lawmakers generally gave the Inslee announcement a tepid response, few will quarrel with its major themes: attention to STEM education, regulatory streamlining, transportation improvements, and reducing business costs. It’s an agenda that’s been around a while. Bills are already moving through the legislature and employers cite the same priorities.
His proposal combines approaches that benefit all business — improved education, regulatory reform, transportation — with targeted investments and tax incentives that benefit a select few. The former is more defensible and more likely to win legislative approval.
Inslee spoke of “fierce global competition” for jobs in his inaugural. You don’t have to look that far. Some of the most intense competition is among the states. Oklahoma, Nebraska, Kansas, Indiana, New Mexico, and Louisiana are pursuing fiscal reforms that include a sharply reduced reliance on income taxes. In most of these states business costs are already lower than they are here.
Kansas Gov. Sam Brownback wants to do more. He told the Wall Street Journal, “We’ve got a series of blue states raising taxes and a series of red states cutting taxes. Now let’s watch and see what happens.”
Right now the red states are looking pretty good, even where they are not having a natural resource boom. The job migration to Texas and the Southeast inspired policy changes in the heartland to attract investment. While it will take time to see the payoff, early indications are positive.
The competition involves anything that affects the cost of creating a job. In Olympia, that includes workers’ compensation, paid leave mandates, and the minimum wage. The state’s reddish Senate proposes cutting costs; the blue House resists. Liberal lawmakers have dusted off income tax and capital gains tax proposals. Yet the sound and fury signifies little, as the chambers launch their missiles expecting them to be shot down somewhere over the rotunda. But we shouldn’t miss this opportunity to improve the general business climate.
With the stark divisions in the Legislature, a strong gubernatorial presence can be decisive. If Inslee’s serious about job creation, he will want to head off efforts to make it costlier to create a job here.
Richard S. Davis is president of the Washington Research Council. His email address is email@example.com