Despite the damage that Seattle sustained with the loss of Washington mutual, commercial real-estate troubles and an unemployment rate of 8.4 percent, the available data show we’ve come through the Great Recession better than most cities and metro areas. Now we face some difficult policy choices and uncertainties.
There’s the ballot initiatives to impose an income tax on the highest earners, as well as to privatize the worker’s comp system. Seattle Mayor Mike McGinn continues to fight a rear-guard action against the deep-bore tunnel that would replace the viaduct.
These issues have powerful economic, social and moral arguments on both sides, which I will leave to the editorial page to sort out. But however voters and public officials decide, the policies — done or defeated — won’t be happening in an economic vacuum. Blessedly, Seattle isn’t at a tipping point like so many places. But it is at a fulcrum, a pivot point where every action carries extra significance.
Seattle and Washington state aren’t operating in isolation. Instead, they face a nasty slow- or no-growth economy domestically. That means other places will be even hungrier to lure away our assets, including the expansions that companies plan (e.g. Boeing and South Carolina). Internationally, what growth may come is likely to be seen in Asia; that’s a good thing for a state with already strong trade ties. But the status quo won’t remain. China, India, Singapore, et al are aggressively building research and development operations and advanced industries, including in renewable energy and other sustainable sectors, to compete for talent and capital that came here in the past.
So: Beware the law of unintended consequences. Seattle has long punched above its weight class — it’s startling for a newcomer, but perhaps long-time residents get used to it. Punched above it not only in business vitality and diversity, but also in opportunity and economic mobility for average people. It’s an environment created by a complex balance that I don’t claim to fully understand. Leaders and voters have to ask how every change in the business environment might affect that strong position for better or worse.
It won’t be easy. The world won’t let us stand still. Continued cuts to state government, especially as they hurt infrastructure and university funding, will bleed us competitively. On the other hand, would the loss of the state’s advantage in having no income tax be a disincentive to the entrepreneurial class, or even hiring at Microsoft? I don’t know. What I do know is that the decisions we make and political leadership we have at this moment in history matter more than usual.
Today’s Econ Haiku:
WTO says no
That doesn’t mean ‘whoa’