Transcript What is the state doing about jobs?

Washington State Department of Commerce
Growing and Improving Jobs in
Washington
Rogers Weed
Director
May 26, 2011
Agenda
• State economy update
• Thoughts on competitiveness
• What is the state doing about jobs?
• Short-term
• Medium-term
• Long-term
Commerce Mission: Grow and improve jobs
Key metrics:
1. Overall job growth and for high, medium and low wage jobs;
2. Income per job, hourly; 3. Growth in income per job; all vs. other states
Global Priorities
Competitiveness
Education/
Workforce Training
Efficient &
Effective
Regulation
Infrastructure
Investment
Sector Focus
Small Business
Specific Priorities
Community
Capacity
Rural Focus
Commerce Strategic Plan available at www.commerce.wa.gov
3
Stock Market Rebounding
Source: Yahoo! Finance; data through May 2011
GDP growth faltered in the first quarter
Source: BEA, data through 2011 Q1, first estimate
Non-farm Workers, Washington State
Millions of Workers
Excluding military and sole proprietors
2.97
3.0
202,233 jobs
lost
2.9
170,800
jobs
2.8
2.7
2.6
2.4
2003 Q1
2003 Q2
2003 Q3
2003 Q4
2004 Q1
2004 Q2
2004 Q3
2004 Q4
2005 Q1
2005 Q2
2005 Q3
2005 Q4
2006 Q1
2006 Q2
2006 Q3
2006 Q4
2007 Q1
2007 Q2
2007 Q3
2007 Q4
2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2.5
Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES);
calculations by Washington State Department of Commerce
Unemployment Rates by County
Not seasonally adjusted, April 2011
Source: Washington State Employment Security Department
Statewide unemployment rate in April: 9.1% (down from adjusted April. 2010 of 9.8%)
U.S.: 9.0% (down from Apr 2010 rate 9.8%)
Year-over-Year Job Growth
Competitor states
2007 Q4 2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
2010 Q2
2010 Q3
2010 Q4
TX 3.2%
2011 Q1
TX 2.4%
WA 2.6%
TX 3.0%
TX 2.0%
OR 1.7%
CO 2.3%
WA 2.2%
TX 2.4%
MA 1.3%
ID 1.2%
ID 1.8%
CO 2.0%
WA 1.4%
VA 1.1%
CA 1.2%
NC 1.7%
NC 1.3%
CO 1.3%
TX 1.3%
MD 1.1%
WA 1.1%
OR 1.1%
MA 1.0%
MA 0.7%
TX 1.9%
MA 1.1%
WA 1.0%
VA 1.1%
MA 1.0%
OR 0.6%
NC 0.4%
WA 0.9%
NC 0.8%
OR 0.7%
MA 0.8%
VA 0.8%
ID 0.5%
VA 0.3%
CO 0.7%
MD 0.7%
CA 0.3%
MD 0.7%
MD 0.5%
VA 0.5%
MD 0.1%
MA 0.3%
VA 0.7%
NC 0.2%
NC 0.6%
CA 0.4%
MD 0.4%
OR 0.0%
VA 0.1%
TX 0.9%
TX 0.4%
ID 0.3%
ID 0.1%
CO 0.6%
CA (0.2%)
ID (0.4%)
NC (0.5%)
MA (0.7%)
TX (1.1%)
TX (2.8%)
MD (3.4%)
MD (3.1%)
TX (2.0%)
NC (0.0%)
WA (0.0%)
CO (0.3%)
CA (0.4%)
MD (0.5%)
CO (0.7%)
VA (2.5%)
MD (3.1%)
TX (3.7%)
TX (3.5%)
MD (2.1%)
MA (0.1%)
OR (0.3%)
OR (0.6%)
VA (0.7%)
MA (2.6%)
VA (3.4%)
VA (3.9%)
VA (3.6%)
VA (2.2%)
MD (0.1%)
CA (0.5%)
ID (0.8%)
WA (1.1%)
MD (2.7%)
MA (3.7%)
MA (4.1%)
MA (3.8%)
NC (2.3%)
VA (0.2%)
CO (1.1%)
CA (1.5%)
MD (1.2%)
CO (2.8%)
WA (4.5%)
CO (5.5%)
NC (4.5%)
MA (2.3%)
ID (0.5%)
NC (2.1%)
WA (3.1%)
CO (4.7%)
WA (5.5%)
WA (4.9%)
ID (2.9%)
WA (1.0%)
OR (2.9%)
NC (4.6%)
NC (5.7%)
NC (6.2%)
ID (5.0%)
WA (3.0%)
OR (1.1%)
CA (2.9%)
CA (4.8%)
CA (6.3%)
OR (6.9%)
CO (5.0%)
OR (3.2%)
CA (1.8%)
ID (3.1%)
ID (5.1%)
OR (6.6%)
CA (6.9%)
OR (5.6%)
CO (3.7%)
CO (2.0%)
OR (5.5%)
ID (6.7%)
ID (7.1%)
CA (6.0%)
CA (4.0%)
Data source: U.S. Bureau of Labor Statistics
Low, Medium, and High Wage Jobs
3 month moving average (3-mma), through April 2011
Medium wage
group might be
stabilizing, but still
early. Still yearover-year losses in
constructionrelated sectors
950,000
900,000
850,000
800,000
Low Wage ($25,845)
Medium Wage ($47,645)
750,000
High Wage ($77,577)
700,000
Average annual wage
in parenthesis as of
Q1-Q3 of 2010
Data source: Washington State Employment Security Department
2011:04
2010:09
2010:02
2009:07
2008:12
2008:05
2007:10
2007:03
2006:08
2006:01
2005:06
2004:11
2004:04
2003:09
2003:02
2002:07
2001:12
2001:05
2000:10
2000:03
650,000
Sectors with Largest Losses
Q2 2009 to Q2 2010
Wage Group
NAICS Industry Description
Code
Change in
Change in
Contribution
Employment Employment to Total
(# jobs)
(%)
(Gross) Job
Losses
High Wage
336
Transportation Equipment Manufacturing
-3,300
-3.6%
8.1%
522
Credit Intermediation and Related Activities
-2,733
-5.9%
6.7%
423
Merchant Wholesalers, Durable Goods
-2,033
-3.2%
5.0%
541
Professional, Scientific and Technical Services
-1,267
-0.8%
3.1%
238
Specialty Trade Contractors
-9,567
-9.3%
23.4%
236
Construction of Buildings
-4,567
-11.2%
11.2%
531
Real Estate and Rental Leasing
-2,500
-5.2%
6.1%
333
Machinery Manufacturing
-1,033
-8.2%
2.5%
722
Food Services and Drinking Places
-2,200
-1.1%
5.4%
624
Social Assistance
-1,033
-1.7%
2.5%
446
Clothing and Clothing Accessories Stores
-367
-1.6%
0.9%
813
Membership Associations and Organizations
-200
-0.4%
0.5%
Medium Wage
Low Wage
Note: 2010 Q2 estimates based on preliminary June 2010 data, and is subject to revision.
Data sources: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES); and Quarterly Census of Employment and
Wages (QCEW, for wage data) calculations by Washington State Employment Security Department (ESD) and Washington
State Department of Commerce
Home prices are once again headed down
Feb. 2011
U.S. is
down
3.3%
Seattle is
down
7.4%
Source: S&P/Case-Shiller; data through February 2011
Competitiveness Studies
Year
2010
2010
2010
2009
2010
2010
2010
2010
2010
2010
2010
2010
2011
Index/Report
New Economy State Index
Forbes
Small Business & Entrepreneurship Council
Corporation for Enterprise Development (CFED)
Tax Foundation
Beacon Hill
CNBC
WA State Economic Climate Study
American Legislative Exchange Council/Laffer
Moody's Cost of Doing Business Study
CEO Magazine
WEDC Innovation Benchmarks
Michael Porter/NGA on States & Clusters
Four in bold together compare over 90 measures
1-10
11-25
26-50 or bottom half
Overall Rank
2
5
5
5
9
14
15
10 to 18
24
29
30
4th out of 6
1 to 45
Rankings depend on…
• …what factors are measured
(some important ones such as regulatory environment are not measured)
• …how they are measured
• …how they are weighted
• …small changes in absolute values
• …competitive set (U.S states, metros, & global)
13
Washington’s Economy
Schematic Representation
Innovation &
Technology
Outputs
Private
Perceptions
Workforce
Education
Quality of Life
Capital
-Energy -Land
Infrastructure
Regulation and Law
14
Private
goods &
Services
General
Other inputs
Public
Traded
Labor
utilization
Inputs
Washington’s competitive strengths
Private economy
•
•
•
•
•
Employment growth, 1999-2009 (4th, Porter)
Per capita personal income (9th, Climate Study)
Median household income (10th, Climate Study)
Foreign exports (2nd, Climate Study)
Manufacturing value-added (1st, New Economy Index)
Innovation and technology
• Patents/10,000 employees (2nd, Porter)
• Growth in patents (1st, Porter)
Other inputs
• Electricity costs (1st, Climate Study)
Capital
• Venture capital (3rd, New Economy Index)
Infrastructure
• Broadband (15th, New Economy Index)
15
Washington’s competitive strengths (cont.)
Workforce
• Scientists and engineers (2nd, New Economy Index)
• High tech jobs (9th, New Economy Index)
• Educational attainment, Bachelors+ (11th, Climate Study)
Education
• UW & WSU (41 & 111 out of 191 ranked, US News)
Regulation and law
• Regulatory environment/state management (5th, Forbes)
• State + local taxes per $1000 personal income (21st lowest, Climate
Study)
Quality of life
• State Parks and Recreation (5th, Climate Study)
• State Health Index (11th, Climate Study)
16
Improving our competitiveness
Private economy
• Traded employment in strong clusters (33rd, Porter)
• Unemployment rate, December 2010 (31st, Porter)
Innovation and technology
• E-government (27th, New Economy)
• Commercialization of IP & patents
Capital
• Foreign direct investment (31st, New Economy)
• Small business credit access
• “Valley of death” funding for tech start-ups
Education
• Fourth grade reading (27th, Climate Study)
• High school graduation rates (33rd, Manhattan Institute)
• Engineering & science degrees, 18-24 yr olds (37th, WA Tech Alliance)
17
Improving our competitiveness (cont.)
Regulation and law
• Regulatory streamlining for small business
Workforce
• Unemployment insurance (43rd, Climate Study)
• Worker’s compensation premiums (25th, Climate Study)
• Retiring aerospace workers/Staying globally competitive
Infrastructure
• Interstate miles in poor condition (33rd, Climate Study)
• Urban Roadway Travel Time, Seattle-Everett-Tacoma
(68th of 90, Climate Study)
• Extending broadband to underserved areas
• Local infrastructure financing tools
Quality of Life
• Housing affordability, Seattle area (204th out of 225, Climate Study)
18
Competitiveness Summary
• Strengths
• Growing jobs and income, high wage/high skill workforce
• Strong technology/innovation performance;
globally competitive companies
• Low-cost power
• Areas to improve
• Education
• Transportation infrastructure
• Sector/cluster support - e.g. aerospace workforce
19
What is the state doing about jobs?
Short-term (next 6-12 months)
• Capital budget spending
• Implementing Federal Recovery Act spend
• Business climate reform
WSDOT highway construction program
•All funds from the 2003 and 2005 gas tax increases are committed.
•2011 Governor-proposed budget request - program total with select
mega-projects highlighted
74% of highway
program dollars
are contracted
to the private
sector.
$6 B of the
$15.5 B in Nickel
and TPA will be
delivered
through our
design-build
program.
54% of the
design effort for
Nickel and TPA
was delivered by
consultants.
Source: WSDOT Capital Program Development and Management Office
21
State Capital Budget and Estimated Jobs
12-year history
Job figures include direct and indirect construction jobs
Dollars in Millions
5,000
56,604 Jobs
4,500
4,000
47,433 Jobs
3,500
3,000
35,033 Jobs
43,273 Jobs
43,032 Jobs
29,745 Jobs
2,500
2,000
1,500
1,000
500
2001-03
2003-05
2005-07
Debt Limit Bonds
2007-09
Other Funds
2009-11
2011-13
Commerce Capital Programs
New Appropriations 2009-11 vs. 2011-13
Program
Housing Trust Fund
2009-11 Appropriation
2011-13 Appropriation
$179,000,000
$50,000,000
Community Capital Facilities
86,596,000
35,859,000
Jobs Act
50,000,000
Community Dev. Block Grant
34,830,081
Public Works Trust Fund
30,666,235
324,585,000
Temporary Public Works Grant Program
44,597,000
Drinking Water Assistance Program
42,131,000
48,000,000
CERB/Other Economic Development
10,753,000
5,000,000
Energy Program
44,045,000
5,500,000
491,952,081
499,610,235
Total New Appropriation
ARRA: 10,970 jobs created/saved
Over $7.9 billion to Washington
Click to pop up
investments by County
Workers’ compensation reform
A more sustainable program for employers and workers
• Statewide provider network
• Focus on highest quality care, treatment options, FY12-15 savings $164 million
• Centers of occupational health & education
• Expands number of specialized treatment facilities, FY12-15 savings $55 million
• Washington Stay-at-Work program
• Subsidies for immediate transition or light-duty work, FY12-15 savings $111M
• Prior disability awards
• Prior awards deducted from pension award, FY12-15 savings $133M
• Cost of Living adjustments frozen for one year
• Reduces premiums to employers & workers, FY12-15 savings $124M
• Rainy Day Fund
• Protects employers from huge swings in economy, no fiscal impact
• Structured settlement option
• Choices for eligible workers, reduces future rate increases, FY12-15 savings $545M
Unemployment Insurance Tax Reduction
• Reduces and caps the shared-cost portion of
unemployment taxes in 2011 by drawing down our
UI Trust Fund…one of the healthiest in the nation
• Reduces 2011 unemployment taxes paid by businesses by
$300 million
• Frees up needed cash to retain and hire workers
• Provides temporary increase in unemployment benefits for
out-of-work Washingtonians and flexibility to workers who
train for a new job
• Changes qualify WA to receive $98 million in federal
incentive funds for modernizing our UI system
What is the state doing about jobs?
Medium-term (~12-36 months)
• Higher-Ed/CC Investments
• Washington State Export Initiative
• ADOs/Business Development
• Washington Technology Center + SIRTI, now Innovate
•
•
•
•
Washington
STARS Program
Innovation Partnership Zones (IPZ)
Leaning Government
State Small Business Credit Initiative
What is the state doing about jobs?
Long-term (36+ Months)
• Early Learning and K-12 Investments
• Washington Economic Development Commission
innovation strategy
• Targeting broad trends in WA’s favor
• Rise of Asia
• Clean energy transition
• Increasing role of software
WEDC Innovation Strategy
Goal: Make Washington the most attractive, creative and fertile
environment for innovation in the world by 2020
Public
Impact
Business
Performance
World’s Greatest Innovation Ecosystem
Talent & Workforce
Investment &
Entrepreneurship
Infrastructure
Thank You
High, Medium, and Low Wage Jobs
Biggest year-over-year gains and losses, 3-mma, April 2011
Sector
Credit Intermediation and Related Activities
Heavy and Civil Engineering
Telecommunications
Building Material and Garden Supply Stores
Education Services
Membership Associations and Organizations
Specialty Trade Contractors
Construction of Buildings
Wood Product Manufacturing
WAGE GROUP
High Wage
High Wage
High Wage
Low Wage
Low Wage
Low Wage
Medium Wage
Medium Wage
Medium Wage
Professional, Scientific and Technical Services
Transportation Equipment Manufacturing
Hospitals
Admin and Support and Waste Mgmt and Remediation
Food Services and Drinking Places
Clothing and Clothing Accessories Stores
Ambulatory Health Care Services
Support Activities for Transportation
Machinery Manufacturing
High Wage
High Wage
High Wage
Low Wage
Low Wage
Low Wage
Medium Wage
Medium Wage
Medium Wage
Data source: Washington State Employment Security Department
ABS CHANGE Y/Y CHANGE
-1,000
-2.3%
-800
-4.6%
-600
-2.4%
-1,133
-4.3%
-533
-1.1%
-433
-0.8%
-3,367
-3.7%
-600
-1.7%
-533
-4.1%
8,233
3,100
2,900
7,867
3,700
2,500
1,633
900
767
5.2%
3.5%
4.0%
6.0%
1.9%
11.1%
1.2%
5.2%
6.6%
Rise of Asia
Share of global GDP, current international dollar
90%
80%
79.4%
IMF Forecast, 2011-2016
70%
60%
58.9%
50%
Difference of
71.7 per points
40%
Advanced
economies
Difference of
39.6 per points
Developing Asia
30%
19.3%
20%
10%
7.7%
0%
Data source: International Monetary Fund (IMF), World Economic
Outlook database, April 2011.
The Economist on Asia-Pacific
• Since 1995, Asia’s economy (real GDP) has grown more than twice as fast as that of
America or Western Europe
• Adjusting for currency differences, three of the world’s four biggest economies
(China, Japan and India) are in Asia
• Asian stock markets now account for 34% of global market capitalization, ahead of
the US (33%) and Europe (27%)
• Asia was the world’s biggest market for automobiles (35%) and mobile phones
(43%) last year
• Asia has accounted for 2/3 of world increase in energy demand since 2000
• In 2009, 40% of global capital investment took place in Asia, more than in the US
and Europe combined
• 8 of the top 10 IPOs in 2009 were Asian firms – more than twice as much IPO capital
was raised in China/Hong Kong last year as in the US
• Asia accounted for over half of world output in 18 of the last 20 centuries.
Transition to Clean Energy
Billions KW hours, Estimated (2009) and Forecast
450
400
350
300
Wind
250
Biomass
200
Geothermal
Solar
150
MSW/LFG*
100
50
0
2009
2020
*Municipal solid waste and landfill gas
Data source: U.S. Energy Information Administration, Annual
Energy Outlook, 2011
2030
2035
Potential Growth in Clean Energy Investments
G-20 Countries, 2010 to 2020
• The Pew Charitable Trust
(2010) forecasts more
than $2.3 trillion will be
invested in clean energy
projects in the G-20
between 2010 and 2020.
• In 2010, China invested a
record $243 billion in
new clean energy
projects.
Source: Pew Charitable Trust, Global Clean Power: A $2.3 Trillion Opportunity
4.5
300
4.0
250
3.5
3.0
200
2.5
150
2.0
1.5
100
1.0
50
0.5
0.0
-
Total dollar amount
Source: National Venture Capital Association
Number of deals
Number of Deals
Billions USD
U.S. Venture Capital Investment in Clean
Technology
Increasing relevance of software
• Aerospace: lines of software code in aircraft:
• Boeing 777: about 2 million lines of code
• 787 Dreamliner: more than 8 million lines of code
• Software x manufacturing = CAD + CNC machining
• Software x agriculture = image scanning to select fruit
• Software x clean technology = smart grid
• Software x life sciences = bioinformatics
• Software x movies = video games
• Software x investing = program trading/hedge funds
37
Broadband Investment
• Building out more education opportunity and economic
development in rural communities
• Federal Government, through ARRA, is investing more
than $243 million in Washington for broadband
infrastructure, adoption and education
• Statewide, private providers have committed another
more than $500 million in network investment in past
few years
38
Average (Nominal) Private Earnings per Hour,
Q2 2009 and Q2 2010
$30
$25
$20
$15
$10
$5
$0
Q2 2009
Q2 2010
Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES); calculations by
Washington State Department of Commerce
State Fiscal Health Rankings – Top 15
State
Rating
Economy
Fiscal Health
Housing
Taxes
Texas
Positive
1
1
1
1
Virginia
Positive
1
1
2
2
Washington
Neutral/Positive bias
2
2
1
1
North Carolina
Neutral/Positive bias
2
2
1
2
Pennsylvania
Neutral
2
2
1
2
Maryland
Neutral
1
3
2
3
Massachusetts
Neutral
2
3
2
2
Florida
Neutral/Negative bias
2
1
3
1
New York
Neutral/Negative bias
2
2
1
3
Georgia
Neutral/Negative bias
3
2
3
2
Michigan
Negative
3
2
3
1
Ohio
Negative
3
2
2
3
Illinois
Negative
3
3
3
1
New Jersey
Negative
2
3
2
3
California
Negative
3
3
3
3
Legend: 1 = Best 2 = Neutral 3 = Negative
Source: “The Tragedy of the Commons,” Meredith Whitney Advisory Group