Issue Position: Jobs

Issue Position

Our citizens are enduring the slowest economic recovery since the Great Depression. Therefore job creation must be our top priority. Making it easy for small businesses to start, to grow and expand and add jobs is a must.

This means fewer restrictions on small business and job creators. We need less regulation and a more simplified and lower cost tax structure. The state's Business & Occupation (B&O) Tax is wrong. It taxes businesses on the first dollar they take in. It is a gross revenue tax, rather than a "net profit" tax.

Let's give businesses a chance to create jobs.

Look at this graph, showing the percentage of American citizens working, following two different recessions. The yellow line is our "current recovery".

"What hasn't recovered over that same period is the labor force participation rate, which today stands roughly where it did in 1977," according to a WSJ report.

A January 8, 2014 article in The Olympia Report states: "The report puts total employment at 50,000 jobs below pre-recession levels and says the percentage of the state's population who are actively looking for work has hit a 30-year low. Even the decreasing unemployment rate is almost completely attributable to people leaving the job market."

Minimum Wage

Making labor more expensive (higher minimum wage), or adding higher costs including the Affordable Care Act and other government "mandates", do not help job creators put our unemployed people back to work.

Below is a graph of minimum wages. We need to make our state one of the most competitive in the nation for job creators, so people can go back to work in our state. High minimum wages make us less competitive in the labor market, and jobs go elsewhere.

Look at this chart of minimum wages around the nation. Sadly, Washington is the most "expensive" state in the nation at $9.32/hour. Green states are higher than the federal minimum which is $7.25/hour. Washington is 28.5% HIGHER than the blue states, which equal the federal minimum. There is an even greater disparity with the red states, (lower than the federal rate), or yellow states which have no minimum wage. Is it any wonder that Washington state businesses are moving jobs to blue, red, or yellow states?

The sad result of this is that for our youth especially, those either without job skills or those with minimal job skills, their level of unemployment is among the highest in the nation. According to the Washington Policy Center, we have the sixth HIGHEST youth unemployment in the country at 29.5 percent. The national rate for youths age 16 -- 19 is 22.9 percent. How sad.

http://www.washingtonpolicy.org/publications/legislative/training-wage-bills-would-increase-job-opportunities-teen-workers

Representative Liz Pike has offered a bill that would allow for a "training wage" for young people. The reduced minimum wage is limited to 680 hours. It would apply to both part -time and full-time workers. It provides employers an incentive to give young people a chance. It gives lower skilled workers an opportunity to get those needed work skills. I support the Liz Pike bill and hope she reintroduces it in the next session.

And for skilled adults, raising the minimum wage even higher will not help. Both Bill Gates and Warren Buffett agree -- raising the minimum wage will cause job LOSSES.

Even though Seattle is proposing a $15/hour minimum wage, it is the wrong thing to do if you want to create jobs. "In an interview with CNN, Buffett noted the current minimum wage of $7.25 an hour is not a living wage, but that the tradeoff for raising it could be job losses. "You do lose some employment as you increase the minimum wage. If you didn't, I would be for having it $15 an hour."

Bill Gates is worried that as wages get too expensive, you risk that automation will begin to squeeze our simple jobs that low-end workers depend on. "Within certain limits, it doesn't cause job destruction, but if you really start pushing it, then you're just making a huge tradeoff," Gates said on the Morning Joe. But the notion that bumping wages will save taxpayers money hinges on routine jobs being available at the higher wages. Gates fears that pushing too hard on wages will encourage innovations that could soon result in even more workers sidelined from the workforce.

Starbucks CEO Howard Schultz recently warned an increase in the minimum wage could result in a reduction in the company's famously generous employee benefits. Schultz argues minimum wages should take into consideration the "total compensation" an employee receives, which in the case of Starbucks employees includes full health coverage, free food, bus passes, 401K, education assistance, stock rewards, bonuses and more--even for part-time workers.

Workman's Compensation Reform

According to a communication from Senator Ann Rivers titled "Jobs Now!";

"The truth of the situation is that Washington returns fewer workers back to the job after an injury than any other state. In fact, we have the highest number of "time-loss' days in the nation at 278 days, while our neighboring state of Oregon has on average only 65 "time-loss' days".

Clearly something is wrong.

State Senator Janea Holmquist Newbry highlighted workers' compensation as one of the key issues legislators need to tackle.

"The truth of the situation is that Washington returns fewer workers back to the job after an injury than any other state. In fact, we have the highest number of "time-loss' days in the nation at 278 days, while our neighboring state of Oregon has on average only 65 "time-loss' days".
"Nearly every stakeholder agrees that the current workers' compensation system is too costly and in dire need of substantial reform, said Holmquist Newbry. "The system simply isn't working and isn't sustainable. The Legislature's failure to adopt common-sense reform to our industrial-insurance system is yet another millstone around the neck of this sluggish, jobless recovery."
Washington, she noted, has the highest pension rate in the country, referring to the lifetime disability payments made to injured workers. One out of 20 workplace injury claims ends in a pension, and injured workers in Washington are also off the job from an average of almost 300 days, three times the national average, according to The Olympia Report. (1-8-2014)

One reason workman's comp insurance is so expensive to employers is that the benefits for the worker are among the richest in the nation. Here is a chart from the Washington Policy Center comparing a worker's "benefits per $100 of wages" between several states with aerospace jobs.

And in December, our state's Department of Labor and Industries announced that it was raising workers' compensation rates by 2.7 percent this year.

Is it any wonder that Boeing is moving jobs to South Carolina and else where? At the end of April, Boeing announced it is transferring 1,100 research engineering jobs out of Washington state and an additional 200 from Southern California to lower-pay locations. A Puget Sound Business Journal Dec. 2013 report: "Up to 1,200 Boeing technology research jobs will be leaving Washington state to points south, to new sites in Alabama, Missouri and South Carolina."

We need to reverse this trend. Our state is losing good paying jobs to states with lower regulations, lower total workman's compensation costs, lower and simpler taxes, and a more favorable overall environment for job creators.

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