Washington Policy Watch

News and perspective on public policy issues affecting Washington's economy and quality of life, brought to you by the Economic Opportunity Institute.

February 3, 2012 • 2:24 pm 0

Public sector cuts are holding back economic recovery in Washington

The latest economic forecast for Washington state, issued by Washington’s soon-to-be-former Chief Economist Arun Raha, shows we may be beginning to dig out from the recession – but public sector cuts are holding back the recovery:

The bright spots:

  • The aerospace industry added 11,500 jobs since May 2010, double the 6,000 lost during the recession.
  • Jobs are beginning to return to the software industry, which added 1,800 jobs since December 2009 – but still shy of making up for the 2,500 software jobs lost during the recession.

The downside:

  • The construction industry remains weak, and employment is flat.
  • State and local government shed 1,300 jobs in November and December, adding to the 17,000 state and local government employee jobs lost between Feb 2010 and Sept 2011.

So overall, signs in the private sector seem to be trending positive – but it’s also clear public sector cuts are holding back the state’s recovery.

public sector vs private sector job change

This point is not lost on Ezra Klein, who points out in the Washington Post that government layoffs are acting as a drag on our national economic recovery:

As Isaac Shapiro and Josh Bivens of the Economic Policy Institute have found, the rate of private-sector job growth during this recovery has actually been comparable to that after the 1990 and 2001 recessions. What makes the current recovery different is that, unlike after past recessions, the unemployment rate is getting battered by government layoffs this time around.

To rebound quickly and rebuild our state economy, Washington legislators need to stop the bleeding by making robust investments in our state infrastructure. Ending corporate tax breaks and maintaining investments of $2 billion in education, health care, and services would help do just that, and result in 9,000 to 17,000 additional private and public sector jobs.

Learn more: A Jobs and Economic Recovery Plan for Washington »

Filed under: state economy, , , , , , , , , , ,

February 1, 2012 • 11:42 am 2

Bills to cut Washington’s minimum wage get hearing in Olympia

Rep. Cary Condotta

In yesterday’s “Labor and Workforce Development Committee“ Washington’s best-in-the-nation minimum wage was under attack yet again.

The latest offensive came in the form of three bills, introduced by Rep. Cary Condotta, which would:

  1. reduce the minimum wage for tipped workers,
  2. lower automatic cost-of-living adjustments (COLA) that track inflation, and
  3. suspend the minimum wage COLA when unemployment is above 7.5%.

Rep. Condotta, for his part, argues in favor of the bills because “the cost of labor is driving [restaurants] out of business.” His evidence to back up this statement, as he points out, is not empirical, but rather “on the ground” experience: “We can talk about theories and we can listen to all the think tanks talk about what they have to say – I’m on the ground,” said Rep. Condotta at the hearings.

Perhaps Rep. Condotta doesn’t rely on the empirical evidence because it doesn’t support his theory. Recent research proves there is no significant impact on employment numbers resulting from minimum wage increases.

In addition, Rep. Condotta’s statement that the cost of labor is driving restaurants out of business is inaccurate. The cost of labor – the minimum wage – is stable and rises with inflation. But commodity costs such as dairy, coffee and food have far outpaced inflation, and Rep. Condotta himself points out “restaurants are facing a 9% increase in food costs.” Certainly increased costs are cutting into employers bottom lines, but they’re cutting into everyone else’s too!

See, it’s not just business owners who are paying higher costs for bread, milk and butter – so is everyone else. Rising commodity prices – which are borne by everyone – should not be used as a surrogate for cutting the minimum wage, especially when costs for food, health care and gas are rising. That’s poor economic theory, and a recipe for more economic insecurity for working people.

Those who argue for a reduction in the minimum wage would do well to remember that employees are customers, too. Nearly every dollar of the minimum wage is pumped back into the economy because few workers can afford to save – creating a multiplier effect that ripples throughout the local economy. When the minimum wage is cut, economic activity also decreases.

People earning minimum wage don’t have wiggle room in their finances - their proverbial “belts” have already been tightened. Cutting the wages of the people struggling to get by will only hurt our economy, and likely lead to more working people utilizing government assistance to make ends meet.

Filed under: minimum wage, , , , , , ,

February 1, 2012 • 9:10 am 1

Tax the rich: They need services too

From the Everett Herald | By John Burbank:

We’ve had a lot of talk about the privilege of the top 1 percent, and how they are grabbing more and more of our national income. Once, productivity increases were proportionally shared between corporations and workers. Now they’re mostly grabbed by companies and their top executives, while workers are left with decreased retirement savings, increased health-care costs and depressed wages.

This shift in prosperity and prospects didn’t just happen. It’s the result of conscious policy-making, including tax decreases for the wealthy, government policy that turns a blind eye to corporate union-busting, and “free trade” agreements that export jobs out of our country.

The result may appear to be manna from heaven for the wealthy, but that too is an illusion, because the wealthy need a civil society to prosper, too. They need good roads and a rail system to deliver materials to factories, and to distribute the products of these factories. They need fully functioning ports to export raw materials to factories they’ve established in China and import consumer goods to sell to Americans.

The wealthy need skilled workers for high tech and remaining industrial production — so they need good schools, community colleges and universities that are accessible to middle class students. And because workers don’t work so well when they — or their kids — are ill or injured or sick, the wealthy benefit from health coverage for the many.

Gated communities, private planes and private elite schools don’t fit the bill. The wealthy might think they can live in isolation and privilege, but the reality is, they can’t escape from the downsizing of the middle class. It hurts them too.  Read the rest of this entry »

Filed under: tax and budget, , , , , ,

January 24, 2012 • 8:48 am 0

We won – now what? What Race to the Top funding means for early learning in WA

Research shows that a significant portion of children’s learning and brain development occurs in the first five years.

While the Washington State Constitution (Article IX) states that “It is the paramount duty of the state to make ample provision for the education of all children residing within its borders, without distinction or preference on account of race, color, caste, or sex,” early childhood education has not been considered part of the definition of basic education.

According to the League of Education Voters, while as a state we spend about $500 million on average for each grade of K-12, we spend only $14 million dollars in state funds for each age group from birth to 5 years old on child care and early learning. When federal dollars are added, that increases to $39 million for each year. (link to LEV blog)

Fortunately for our youngest children, the federal government is making a push to support the improvement of early childhood care and education. Through the Race to the Top Early Learning Challenge Grant the federal government is making $500 million dollars available to nine winning states. Washington state was one of those nine.

This grant will provide Washington with around $60 million over four years, the primary purpose of which is to support the roll-out of a Tiered Quality Rating and Improvement System (TQRIS).

A TQRIS system contains several components under its umbrella. It is designed to clearly identify what quality looks like in licensed child care centers, licensed family homes and other early learning settings. Assessment tools are used to measure child outcomes, child care provider interactions with children, and the quality of the learning environment. Supports for training and coaching are provided. Additional supports and incentives are given to facilities. Ratings are established based on the assessment and made available to parents and communities.

The Department of Early Learning has shifted funding from many of the quality activities it has undertaken in previous years to supplement the roll-out of TQRIS. About $42 million of the federal grant will go towards quality improvement awards, training hub incentives, program evaluation, rating and monitoring, training, coaching and technical assistance.

Additional elements of the grant will support state-wide expansion of the kindergarten assessment by paying for teacher training elements and providing incentives for child care providers that already have or who gain specific levels of higher education.

Race to the top will give Washington state a much needed boost in creating an integrated system of early care and education. Perhaps that will provide some of the impetus for making a stronger commitment to funding high quality early learning programs and professionals.

Filed under: early learning, , , , , ,

All Posts: Budget and Taxes »
All Posts: Social Security »
All Posts: Family-wage Jobs »
All Posts: Government »
donate
All Posts: State Economy »
All Posts: Paid Sick Days »
All Posts: Paid Family Leave »
All Posts: Early Learning »

Twitter Updates

Follow

Get every new post delivered to your Inbox.

Join 426 other followers