Olympia Business Watch

AWB calls for fixes to workers' comp system

AWB called on state officials Wednesday to think carefully before going ahead with a proposed 7.6 percent average workers' compensation rate hike.

"You have heard how the day-to-day operations of real jobs providers in this state are affected by any increase in cost, but especially an increase in cost that is this significant at this time," said Kris Tefft, AWB general counsel and government affairs director, during a public hearing in Tumwater.

Tefft's testimony came during the middle of one of six public hearings held by the state Department of Labor & Industries on the proposed rate hike.

Many business owners also testified at the Tumwater meeting, giving first-hand accounts of their frustrations with the workers' comp system, and the damage that will come from a rate hike.

Approximately 65 people turned out for a hearing Thursday in Bellingham, and many of them echoed similar concerns, according to this report in the Bellingham Herald.

It's true that the bad economy partly explains the state's need for a rate hike, Tefft told officials.

Washington business leaders react to Boeing 787 decision

Boeing's announcement today that it would build a second 787 assembly line in South Carolina rather than Everett is disappointing and a call to action, the state's business leaders said.

"Boeing's decision underscores the changing landscape of today's worldwide business climate," AWB President Don Brunell said in a statement issued shortly after the company's announcement. He added, "It is imperative that we redouble our efforts to lure new production lines and other companies to Washington and we will continue to do our part to make sure that happens."

Steve Mullin, president of the Washington Roundtable, said Washington state faces an important challenge.

"We need to work even harder to make the changes necessary to make our state more competitive, or we will lose more family wage jobs in today's highly competitive global economy," Mullin said in a statement.

Phil Bussey, president and CEO of the Greater Seattle Chamber of Commerce, said Washington state must act decisively to protect the thousands of aerospace jobs it already has and to grow the industry.

"This isn't just about the 787 second line," Bussey said in a statement. "It's about the future of aerospace and all manufacturing, large and small, in our state."

The Washington Aerospace Partnership said the decision shows that Washington can't take its long history in aerospace or with Boeing for granted.

Its focus now is the competition with Airbus for the U.S. Air Force refueling tanker contract, the partnership said in a statement.

"To win this contract, we need to be vigilant, to challenge our state and its workers and we must continue to create an environment that is forward thinking," the statement read.

Gregoire, business leaders agree on strategy to create new jobs

Rogers Weed, director of Washington's recently re-named Department of Commerce, unveiled a list of priorities Monday that will guide the effort to create new jobs and boost the state's economy.

The priorities, which offer a preview of a full report from the Commerce Department that's due next week, drew praise from Gov. Chris Gregoire and many of the state's business leaders.

They so-called "global" priorities include:

• Competitiveness and innovation
• Education and workforce training
• More efficient regulation
• Infrastructure investment

In addition, the Commerce Department plans to zero in on four specific priorities -- building up communities by investing through community service agencies and local governments, focusing on rural areas, helping small business and focusing on industry sectors.

In a news release, Gregoire said Weed outlined "the right priorities at the right time" and called on business, labor and community groups to work together to build the state's economy.

AWB President Don Brunell also praised Weed's effort to re-define the Commerce Department, which was formerly known as the state Department of Community, Trade and Economic Development.

A job by any other color: Puget Sound corridor a "hotbed" of green jobs activity

Washington state again finds itself on another list of "best places to be," and this time, it's for jobs in the new "green" clean energy economy. Given record state and national unemployment figures, news of any jobs growth is a welcome relief.  

This month, the green research firm Clean Edge released its list of top 15 metro areas in the U.S. for clean-tech jobs, which includes jobs in fields such as renewable energy or energy efficiency. The top "hotbed" for clean-tech jobs is the San Francisco/Oakland/San Jose area. Seattle/Tacoma/Bremerton earned a seventh-place ranking, just ahead of our neighbors in Portland/Salem.

While specifics as to why each metro region was selected are not explicitly detailed, the study does say rankings were based on an array of data points, including early investment activity, an existing presence of clean-tech jobs and clean-energy patent activity. According to the study, this jobs cycle will differ from others -- like the recent dot-com build ups -- because it is a "highly dispersed phenomenon":

"No one place or region will control any one clean-tech sector. Clusters of clean-tech activity, supported by local technology development, capital flows, and supportive public policies, are springing up across the U.S. and around the world."

Other researchers in the field of clean-tech jobs appear to have a similar view.

By 2007, more than 68,200 businesses across all 50 states and the District of Columbia accounted for more than 770,000 green jobs, according to the Pew Charitable Trusts.

This is a noteworthy figure in light of employment in other established industries, such as biotech (220,000 positions) or telecomm (989,000). In their June 10 study, "The Clean Energy Economy," Pew reported that these clean-energy jobs are also a mix of white- and blue-collar positions, ranging from scientists and engineers to electricians, machinists and teachers. The field also grew by 9.1 percent between 1998 and 2007, while total jobs grew by only 3.7 percent.

Colorful news in an otherwise bleak landscape.

Brunell: High tech poised to lead Washington's recovery

Spending on information technology is expected to grow at three times the rate of gross national profit in 52 countries, and create some 5.8 million new jobs between now and 2013, according to a global study released earlier this month by the International Data Corporation.

In the U.S., spending on IT  will reach $488 billion in 2009 and will increase at almost five times the rate of GDP, the study found.

So what does it mean for Washington?

It could possibly give us an advantage over other states as the nation struggles to emerge from the recession, AWB President Don Brunell writes in his weekly column.

"While most people know that The Boeing Company is a key player in our state's economy, IT is a major force as well," Brunell write. "The Washington Technology Industry Association represents more than 1,000 member companies with more than 100,000 employees in the state -- most of them in the IT sector."

But we must maintain our advantage, Brunell writes.

That means making sure Washington's regulatory and tax policies support its existing IT sector and encourages growth.

AWB weighs in on ideas for streamlining natural resource management

A 166-page document outlining ideas for streamlining Washington's natural resource management system contains many good suggestions, said Gary Chandler, AWB vice president of government affairs.

But Chandler, writing to Gov. Chris Gregoire, cautions against using the search for regulatory efficiencies as a chance to change environmental protection laws, either by weakening or strengthening them.

"We do not ... believe this effort addresses much of the necessary regulatory reform that remains to be done following the passage of 1995's HB 1010, and would draw a distinction between the two topics," Chandler said an Oct. 16 letter.

The letter goes on to detail AWB's positions on many of the ideas, which range from major restructuring of state agencies to streamlining permitting and compliance activities.

On the idea of restructuring state agencies, AWB believes there is merit to some of the possibilities, but needs more time to fully consider how various groups would be affected and declined to take a position on which model might work best.

News of Great Recovery tempered by jobs data

Today's announcement by the Bureau of Labor Statistics that job losses in this recession are now at or near record levels surely tempers news of the Great Recovery.

According to today's report, 5.2 percent of jobs have been lost in the U.S. since the start of the recession (December 2007). Here in Washington state, we've lost 4.3 percent of total jobs, putting us in about the middle of the pack (28th), comparatively speaking. You can view the full rankings here.

Arizona showed the greatest decline, becoming the first state to have lost 10 percent of its total jobs to the recession -- a feat that has only occurred once in the past four recessions according to the Economic Policy Institute. And Michigan, reeling from the loss of manufacturing jobs, is ranked second, having lost 9.8 percent of its jobs, followed by Nevada, also affected by the downturn in construction, having lost 8.5 percent. 

Around the West, Oregon lost 7.7 percent, Idaho is down 6.6 percent and California is off by 6.5 percent, ranking them sixth, seventh and eighth respectively. Unemployment rates were still on the rise in 24 states last month and 15 states (seven in the South), had double-digit rates of joblessness.

Only Alaska (+0.6 percent), Washington, D.C. (+0.6 percent) and North Dakota (+1.4 percent) showed job growth. 

The Daily News nails it on need for workers' comp reform

On its Sunday editorial page, the Longview Daily News hit the nail on the head about the need for workers' comp reform in Washington:

Local businesses and their employees are about to get hit with significant tax bill just when they can least afford it. Daily News business writer Erik Olson reported this month that workers’ compensation insurance rates are due to increase 7.6 percent at the first of next year. That’s the biggest increase since the eye-popping 29 percent rate hike in 2003 revived talk of making fundamental changes in this state-run insurance program.

Unfortunately, that talk produced no changes. The cost of workers’ comp continues its upward march in good economic times and bad, burdening Washington employers and employees and giving pause to businesses and industries that may be looking to move into the state.

The editorial considered the distressing effect of the rate hike on two local businesses:

Brunell: What happens in Spokane won't stay in Spokane

The folks behind Spokane's grandiose Proposition 4 appear not to be in touch with reality, AWB President Don Brunell writes in his weekly column.

The proposition seeks to amend the city charter to create an expansive and expensive bundle of vague new rights, Brunell writes, everything from extending prevailing wage requirements to "affordable renewable energy."

Who will enforce these rights, Brunell asks. "Everybody!" says Envision Spokane, the group behind the proposition.

And who is going to pay for it?

The group has not even bothered to tally the cost of their wish list, Brunell says.

"There is no free lunch," Brunell writes. "Rather than saddle employers and taxpayers with a costly and ambiguous wish list, voters should reject Proposition 4 and urge their elected officials to come up with positive, workable alternatives."

Maybe Washington should look at Florida for help on workers' comp

Workers' compensation insurance rates will drop 6.8 percent next year in Florida, the state's insurance commissioner announced this week.

It's the seventh consecutive decrease in Florida's workers' comp rates, and it will save Sunshine State employers an estimated $166 million annually, officials announced.

The cheery news not only lies in stark contrast to Washington's recent announcement of a proposed 7.6 percent rate hike next year, but it also differs sharply from Florida's own not-too-distant experience.

Before a series of legislative reforms in 2003, Florida had the highest workers' comp rates in the country.

Last year, even as the nation struggled in a deep recession, Florida's workers' comp insurance rates dropped to 28th highest. The most recent reductions are expected to place Florida among the 10 lowest states in the country, according to the insurance commissioner's office.