So, once again, here is the mission statement we are proposing for the Department. It’s evolved some from the beginning of the summer when we started with “Retain the jobs we have today and create new ones.” One of the good pieces of feedback from the summer was “What about the quality of the jobs, does that matter?” The answer Is “yes, it does.” So we’ve evolved to “Grow and improve jobs.” We think measuring “Grow” will be pretty straightforward, but the “Improve” part will take a bit more thinking. It’s pretty likely improve will include caring about the income level per job, both on average and by segment of the employment base. We also think we should care about how jobs are distributed between urban and rural settings as we’ll discuss more shortly. And we also think it’s reasonable to set a goal that our job and business bases should mirror the diversity of our state’s population over time. So these are other “improve” metrics that we are looking at.
There were 40,900 jobs shed from Q2 2009 to Q2 2010, and 30,867 jobs added, creating a net loss of10,033 jobs. Consistent with our last review of the data, the construction and related sectors made up a large component of these losses—construction and specialty contractors contributed 34.6% of gross job losses from Q2 2009 to Q2 2010. Overall, the medium wage jobs segment contributed 54.6% of gross jobs losses during this period, followed by high wage jobs (36.1%) and low wage jobs (9.3%).
This slide helps illustrate the increasing role of information and communication technology across other sectors. The 787 uses four times as many lines of code as a 777.
Private investment number is a conservative number based on press releases from providers and negotiated agreements as a result of provider mergers. One of these agreements ( CenturyTel/Qwest $80) is currently being challenged by the provider.The federal amount represents grants AWARDED. Chelan County PUD has decided to return it’s $25 million grant from the USDA for broadband.
Figures 4-6 represent estimates of hourly earnings by state and the U.S. There is no data for earnings on a quarterly basis, so we did some manipulations to come up with estimates of total hours worked and total earnings per quarter to get a quarterly estimate, using monthly data on average hourly wage, monthly employment, and hours worked per week. One limitation to this approach is that we do not correct for workers holding two or more jobs.
Growing and Improving Jobs in Washington
Washington State Department of Commerce<br />Growing and Improving Jobs in Washington<br />Rogers Weed<br />Director<br />May 26, 2011<br />
Agenda<br />State economy update<br />Thoughts on competitiveness<br />What is the state doing about jobs?<br />Short-term<br />Medium-term<br />Long-term<br />
Commerce Mission: Grow and improve jobs<br />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<br />Global Priorities<br />Competitiveness<br />Education/ Workforce Training<br />Efficient & Effective Regulation<br />Infrastructure Investment<br />Specific Priorities<br />Community Capacity<br />Rural Focus<br />Sector Focus<br />Small Business<br />Commerce Strategic Plan available at www.commerce.wa.gov <br />3<br />
Source: Yahoo! Finance; data through May 2011<br />Stock Market Rebounding<br />
GDP growth faltered in the first quarter<br />Source: BEA, data through 2011 Q1, first estimate<br />
Non-farm Workers, Washington StateExcluding military and sole proprietors<br />202,233 jobs lost<br />170,800 jobs<br />Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES); calculations by Washington State Department of Commerce<br />
Unemployment Rates by CountyNot seasonally adjusted, April 2011<br />Source: Washington State Employment Security Department <br />Statewide unemployment rate in April: 9.1% (down from adjusted April. 2010 of 9.8%)<br />U.S.: 9.0% (down from Apr 2010 rate 9.8%)<br />
Year-over-Year Job GrowthCompetitor states<br />Data source: U.S. Bureau of Labor Statistics<br />
Low, Medium, and High Wage Jobs3 month moving average (3-mma), through April 2011<br />Medium wage group might be stabilizing, but still early. Still year-over-year losses in construction-related sectors<br />Data source: Washington State Employment Security Department<br />
Sectors with Largest Losses Q2 2009 to Q2 2010<br />Note: 2010 Q2 estimates based on preliminary June 2010 data, and is subject to revision.<br />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<br />
Home prices are once again headed down<br />Feb. 2011<br />U.S. is down 3.3%<br />Seattle is down 7.4%<br />Source: S&P/Case-Shiller; data through February 2011<br />
Competitiveness Studies<br />1-10<br />11-25<br />26-50 or bottom half<br />Four in bold together compare over 90 measures<br />
Rankings depend on…<br />…what factors are measured<br />(some important ones such as regulatory environment are not measured)<br />…how they are measured<br />…how they are weighted<br />…small changes in absolute values<br />…competitive set (U.S states, metros, & global)<br />13<br />
Washington’s competitive strengths <br />Private economy<br />Employment growth, 1999-2009 (4th, Porter)<br />Per capita personal income (9th, Climate Study)<br />Median household income (10th, Climate Study)<br />Foreign exports (2nd, Climate Study)<br />Manufacturing value-added (1st, New Economy Index)<br />Innovation and technology<br />Patents/10,000 employees (2nd, Porter)<br />Growth in patents (1st, Porter)<br />Other inputs<br />Electricity costs (1st, Climate Study)<br />Capital<br />Venture capital (3rd, New Economy Index)<br />Infrastructure<br />Broadband (15th, New Economy Index)<br />15<br />
Washington’s competitive strengths (cont.) <br />Workforce<br />Scientists and engineers (2nd, New Economy Index)<br />High tech jobs (9th, New Economy Index)<br />Educational attainment, Bachelors+ (11th, Climate Study)<br />Education<br />UW & WSU (41 & 111 out of 191 ranked, US News)<br />Regulation and law<br />Regulatory environment/state management (5th, Forbes)<br />State + local taxes per $1000 personal income (21st lowest, Climate Study)<br />Quality of life<br />State Parks and Recreation (5th, Climate Study)<br />State Health Index (11th, Climate Study)<br />16<br />
Improving our competitiveness<br />Private economy<br />Traded employment in strong clusters (33rd, Porter)<br />Unemployment rate, December 2010 (31st, Porter)<br />Innovation and technology<br />E-government (27th, New Economy)<br />Commercialization of IP & patents<br />Capital<br />Foreign direct investment (31st, New Economy)<br />Small business credit access<br />“Valley of death” funding for tech start-ups<br />Education<br />Fourth grade reading (27th, Climate Study)<br />High school graduation rates (33rd, Manhattan Institute)<br />Engineering & science degrees, 18-24 yr olds (37th, WA Tech Alliance)<br />17<br />
Improving our competitiveness (cont.)<br />Regulation and law<br />Regulatory streamlining for small business<br />Workforce<br />Unemployment insurance (43rd, Climate Study)<br />Worker’s compensation premiums (25th, Climate Study)<br />Retiring aerospace workers/Staying globally competitive<br />Infrastructure<br />Interstate miles in poor condition (33rd, Climate Study)<br />Urban Roadway Travel Time, Seattle-Everett-Tacoma (68th of 90, Climate Study)<br />Extending broadband to underserved areas<br />Local infrastructure financing tools<br />Quality of Life<br />Housing affordability, Seattle area (204th out of 225, Climate Study)<br />18<br />
Competitiveness Summary<br />Strengths<br />Growing jobs and income, high wage/high skill workforce<br />Strong technology/innovation performance; globally competitive companies<br />Low-cost power<br />Areas to improve<br />Education<br />Transportation infrastructure<br />Sector/cluster support - e.g. aerospace workforce<br />19<br />
What is the state doing about jobs?Short-term (next 6-12 months)<br />Capital budget spending<br />Implementing Federal Recovery Act spend<br />Business climate reform<br />
<ul><li>All funds from the 2003 and 2005 gas tax increases are committed.
2011 Governor-proposed budget request - program total with select</li></ul> mega-projects highlighted<br />74% of highway<br />program dollars are contracted to the private sector.<br />$6 B of the $15.5 B in Nickel and TPA will be delivered through our design-build program. <br />54% of the design effort for Nickel and TPA was delivered by consultants.<br />21<br />Source: WSDOT Capital Program Development and Management Office<br />WSDOT highway construction program<br />
State Capital Budget and Estimated Jobs12-year history<br />Dollars in Millions<br />43,032 Jobs<br />
Commerce Capital ProgramsNew Appropriations 2009-11 vs. 2011-13<br />
ARRA: 10,970 jobs created/saved Over $7.9 billion to Washington<br />Click to pop up<br />investments by County<br />
Workers’ compensation reformA more sustainable program for employers and workers<br />Statewide provider network<br />Focus on highest quality care, treatment options, FY12-15 savings $164 million<br />Centers of occupational health & education<br />Expands number of specialized treatment facilities, FY12-15 savings $55 million<br />Washington Stay-at-Work program<br />Subsidies for immediate transition or light-duty work, FY12-15 savings $111M<br />Prior disability awards<br />Prior awards deducted from pension award, FY12-15 savings $133M<br />Cost of Living adjustments frozen for one year <br />Reduces premiums to employers & workers, FY12-15 savings $124M<br />Rainy Day Fund<br />Protects employers from huge swings in economy, no fiscal impact<br />Structured settlement option<br />Choices for eligible workers, reduces future rate increases, FY12-15 savings $545M<br />
Unemployment Insurance Tax Reduction<br />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<br />Reduces 2011 unemployment taxes paid by businesses by $300 million<br />Frees up needed cash to retain and hire workers <br />Provides temporary increase in unemployment benefits for out-of-work Washingtonians and flexibility to workers who train for a new job<br />Changes qualify WA to receive $98 million in federal incentive funds for modernizing our UI system<br />
What is the state doing about jobs?Medium-term (~12-36 months)<br />Higher-Ed/CC Investments<br />Washington State Export Initiative<br />ADOs/Business Development<br />Washington Technology Center + SIRTI, now Innovate Washington<br />STARS Program<br />Innovation Partnership Zones (IPZ)<br />Leaning Government<br />State Small Business Credit Initiative<br />
What is the state doing about jobs?Long-term (36+ Months)<br />Early Learning and K-12 Investments<br />Washington Economic Development Commission innovation strategy<br />Targeting broad trends in WA’s favor<br />Rise of Asia<br />Clean energy transition<br />Increasing role of software<br />
WEDC Innovation Strategy<br />Goal: Make Washington the most attractive, creative and fertile environment for innovation in the world by 2020<br />Public <br />Impact<br /> Business Performance<br />World’s Greatest Innovation Ecosystem<br />Investment & <br /> Entrepreneurship<br />Infrastructure<br />Talent & Workforce <br />
High, Medium, and Low Wage JobsBiggest year-over-year gains and losses, 3-mma, April 2011<br />Data source: Washington State Employment Security Department<br />
Rise of AsiaShare of global GDP, current international dollar<br />IMF Forecast, 2011-2016<br />Difference of 39.6 per points<br />Difference of <br />71.7 per points<br />Data source: International Monetary Fund (IMF), World Economic Outlook database, April 2011.<br />
The Economist on Asia-Pacific<br />Since 1995, Asia’s economy (real GDP) has grown more than twice as fast as that of America or Western Europe<br />Adjusting for currency differences, three of the world’s four biggest economies (China, Japan and India) are in Asia<br />Asian stock markets now account for 34% of global market capitalization, ahead of the US (33%) and Europe (27%)<br />Asia was the world’s biggest market for automobiles (35%) and mobile phones (43%) last year<br />Asia has accounted for 2/3 of world increase in energy demand since 2000<br />In 2009, 40% of global capital investment took place in Asia, more than in the US and Europe combined<br />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<br />Asia accounted for over half of world output in 18 of the last 20 centuries.<br />
Transition to Clean EnergyBillions KW hours, Estimated (2009) and Forecast<br />*Municipal solid waste and landfill gas<br />Data source: U.S. Energy Information Administration, Annual Energy Outlook, 2011<br />
Potential Growth in Clean Energy InvestmentsG-20 Countries, 2010 to 2020<br />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.<br />In 2010, China invested a record $243 billion in new clean energy projects.<br />Source: Pew Charitable Trust, Global Clean Power: A $2.3 Trillion Opportunity <br />
U.S. Venture Capital Investment in Clean Technology<br />Source: National Venture Capital Association<br />
Increasing relevance of software<br />37<br />Aerospace: lines of software code in aircraft:<br />Boeing 777: about 2 million lines of code<br />787 Dreamliner: more than 8 million lines of code<br />Software x manufacturing = CAD + CNC machining<br />Software x agriculture = image scanning to select fruit<br />Software x clean technology = smart grid<br />Software x life sciences = bioinformatics <br />Software x movies = video games<br />Software x investing = program trading/hedge funds<br />
Broadband Investment<br />38<br />Building out more education opportunity and economic development in rural communities<br />Federal Government, through ARRA, is investing more than $243 million in Washington for broadband infrastructure, adoption and education<br />Statewide, private providers have committed another more than $500 million in network investment in past few years<br />
Average (Nominal) Private Earnings per Hour, Q2 2009 and Q2 2010<br />Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES); calculations by Washington State Department of Commerce<br />
State Fiscal Health Rankings – Top 15<br />Legend: 1 = Best 2 = Neutral 3 = Negative<br />Source: “The Tragedy of the Commons,” Meredith Whitney Advisory Group<br />