“Location is a choice.” That was the message Boeing Commercial Airplanes CEO Scott Carson delivered to hundreds of business and community leaders during a luncheon last November. In that address, Carson made clear that our state cannot take its largest employer for granted.
This is no stunt. It’s reality. The competition to land the next line of Boeing planes, and to continue being home to a major portion of Boeing’s workforce, is real. Kansas, South Carolina and Alabama are already building aerospace worker training facilities in hopes of luring the aerospace giant.
Our state economy remains highly dependent on aerospace. It accounts for 15 percent of gross state product. Every Boeing job creates three additional jobs in supplier companies and other industries such as service, retail and real estate. Take Boeing out of Washington and thousands of non-Boeing jobs go with it. A soon-to-be released economic impact analysis from the Washington Research Council makes it clear: if Boeing leaves Washington — whether it’s a relatively quick withdrawal or a phased workforce reduction — our state economy loses more than 375,000 jobs. Without Boeing, everything here gets worse, from employment to housing values and retail sales, not to mention civic leadership and charitable contributions.
Gov. Chris Gregoire has taken a step toward recognizing the importance of the competition for Boeing. Last month, she appointed Bill McSherry, a seasoned policy analyst, to serve as her special adviser on aerospace issues. She is convening elected officials, business, civic and labor leaders statewide to deliver a competitive package to the 2009 Legislature that will help keep Boeing jobs in Washington.
This is not a tough nut to crack. Washington state successfully competed for and won the final assembly of the 787 back in 2003. Unfortunately, some of the reforms used to win then were repealed two years later. Since then, the states that lost have clearly been gearing up for round two.
The competitive and business cost challenges a company like Boeing faces are apparent. If lawmakers act promptly on a couple essential, commonsense issues, they can improve the business climate for Boeing and for thousands of other small and large businesses.
Here’s what they need to do:
n Budget responsibly and hold the line on tax increases. Faced with a multi-billion deficit, state lawmakers must make a series of difficult budget decisions in the coming weeks — the same kinds of decisions city and county governments and nearly every business and family across this state are making. Some lawmakers are calling for tax increases, saying the budget cannot be balanced without them. Forget about it. Employers and families are struggling. The vast majority of voters oppose tax increases, and rightly so. Higher taxes will hurt working families, exacerbate the state’s economic problems and stall recovery.
n Reduce business costs. In a global economy where companies can operate anywhere, location decisions often come down to cost. And Washington is more expensive than its competitors. Washington businesses shoulder 51 percent of the state and local tax burden. Unemployment insurance taxes for employers here are the second highest in the nation. Worker’s compensation benefits are the third highest. And, Washington is one of very few states with a gross receipts tax. To keep Boeing, or any other manufacturer or large employer, our state must reduce employer costs as compared to other states. It’s too easy to move jobs elsewhere if we don’t.
Gov. Gregoire has said Washington will have to compete for current and future Boeing jobs and she’s preparing a proposal. The 2009 Legislature must take a series of specific actions in the coming weeks. But the quest cannot end there. Keeping the state competitive is a relentless effort. It isn’t accomplished with one swing of the bat. We must all work together — business, labor and government alike — taking nothing for granted and ensuring Washington is a place where employers, families and individuals can compete and thrive.
The jobs at Boeing and other manufacturers can’t be replaced overnight. And, more likely, they would be replaced by lower paying jobs with lower benefits. These are not the jobs we want and they certainly aren’t the jobs we want for our children. The choice is clear: Olympia must do the right thing and fight for the jobs we have and the future we want.
John Stanton is chair of the Washington Roundtable, a nonprofit, public policy organization composed of chief executives representing major private sector employers throughout Washington. Aaron Reardon is Snohomish County executive.
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