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President's Column

Monday, February 8

2016 Redbook offers data-driven snapshot of state’s economic competitiveness

In business, you can get left behind just by sitting still.

Look at Blockbuster video or Borders books. And remember the Palm Pilot? Or the Atari game console?

Business schools study these failures as cautionary tales, of course, but there are lessons for state governments, as well.

As Washington lawmakers work through this short, election-year legislative session, they would be wise to keep at least one eye on the competition as they consider issues like climate policy, minimum wage and education funding.

One way they can do that is to read the 2016 Competitiveness Redbook.

The Redbook, produced annually by a coalition of employer groups known as the Washington Alliance for a Competitive Economy or WashACE, is a data-driven handbook that compares Washington state’s competitiveness with other states in 58 categories, everything from personal income to real estate affordability.

The Redbook does not assign an overall rating to each state the way some business magazines or websites attempt to rank the best states for business. Rather, it lays out the data and allows the users to draw their own conclusions.

In reviewing the 2016 data, it’s apparent that Washington state is doing well in a number of measures. The state saw strong employment growth during the past year, adding 346,000 non-agricultural jobs and ranking fourth in the nation.

This is one of the bright signs noted by Gov. Jay Inslee in his State of the State address in January, but it worth noting the growth is concentrated in pockets, particularly in and around Seattle, and isn’t yet widespread.

Washington also has the lowest cost electricity in the nation for industrial and residential customers and seventh-lowest for commercial customers, an important competitive advantage that we have held for years — but should not take for granted.

Exports and high-tech fuel much of the economy, according to the Redbook. Washington ranks ninth-highest in the country in high-tech employment and the sector’s employees earn the third-highest average wage in the nation.

And Washington once again ranks No. 2 in the nation for exports per capita and No. 3 in the nation for total exports.

But there are weak spots stand out when reviewing the Redbook data, as well.

Education is one of them. According to the latest figures, Washington is 45th in the nation in higher education enrollment and we remain a net exporter of college-bound high school graduates.

Washington remains a high-cost state for business, too. Workers’ compensation and unemployment insurance costs are among the highest in the nation.

And Washington employers pay more than their fair share of taxes. At the time of the 2016 Redbook publication, Washington ranked eighth-highest in the nation with employers paying just over 54 percent of all state and local taxes.

Since then, newly published data shows we’re going in the wrong direction. Private employers now pay 58 percent of all state and local taxes, according to a new report from the Council on State Taxation.

Washington is a great place in which to live and work. There are many compelling reasons for employers to locate here.

But the data in the 2016 Redbook doesn’t sugarcoat the truth that we have lots of room for improvement.

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