Latest In Focus

 

Above is the latest episode of our In Focus podcast. In it, Kriss and I talk about:

You may subscribe to our In Focus and Policy Today podcasts here.

The impacts of a bad reputation

U.S. Labor Secretary Tom Perez talked recently about how a good reputation can trump a good location when it comes to trade. Washington’s ports had enjoyed an advantage due to their location as a good access point to and from Asia, but the result of the West Coast ports work slowdown may be that that they are seen as unreliable.

Indeed, the Puget Sound Business Journal writes that

The biggest East Coast ports had 10.2 percent more growth than the biggest West Coast ports in the fourth quarter of 2014, compared to a 1.6 percent difference from the year before. . . .

Some of that diverted cargo will never come back.

“With each labor event, some diverted cargo has not returned, and this seems to be the case for some West Coast ports coming out of this most recent contract negotiation,” according to Fitch [Ratings].

Additionally, the story notes,

The Port of Seattle is mostly just a pit stop as goods make their way around the country.

While the Port of Seattle doesn’t track exactly how much cargo shipped through the harbor moves outside the state, most of it is shipped elsewhere, said spokesman Perry Cooper.

When cargo isn’t staying in Washington state, shippers have less incentive to use Washington state ports when others are more reliable.

In a 2013 report, we looked at the competition faced by our ports and noted that

31 percent by value and 13 percent by weight of all goods exported through Washington ports originated outside of the state of Washington.

On the question of how long it will take for port activity to get back to normal, the PSBJ story says, “it will take no more than three weeks to clear backlog at the ports of Seattle and Tacoma.”

The Wall Street Journal writes about one way to get freight moving:

Port terminals are developing new ways to organize cargo at the docks and systems for getting that cargo moving off the docks as quickly as possible. Software developed by a local technology startup called Cargomatic, a sort of Uber for moving cargo around the Los Angeles region, serves as one creative solution.

Reputational damage at the ports

As an addendum to my earlier post on the deal at the ports, NPR has a good interview with U.S. Labor Secretary Tom Perez. On the impacts of the slowdown, he says,

There is so much collateral damage occurring. . . . You are playing with fire because, yes, the West Coast ports have the advantage of location, location, location. But you know what — location, location, location is not enough if you have a bad reputation, reputation, reputation. . . . In 2015 businesses have options.

Deal reached at the ports, but normalcy may be a long way off

On Friday, the Pacific Maritime Association and the International Longshore and Warehouse Union came to an agreement on a new contract, averting a full shutdown of West Coast ports. A major slowdown had been ongoing for the past several months, which we have written about previously. According to the Los Angeles Times,

The agreement, which still needs approval from union members and individual employers, should start easing severe congestion that’s been building for months at the nation’s busiest ports, in Los Angeles and Long Beach, along with other major gateways.

Details of the proposed five-year contract for about 20,000 West Coast dockworkers were not released. The dockworkers have been without a contract since July. The two sides had been negotiating since May.

The dispute caused businesses across the nation to lose money because imports were trapped on boats and exports trapped on land.

“We heard from small-business owners, large-business owners, farmers who couldn’t get their produce or their meat to market,” U.S. Labor Secretary Thomas Perez told reporters in San Francisco, where he joined contract talks this week to push for a settlement.

“This is now in the rear-view mirror,” Perez said. “A significant potential head wind for this economic recovery has been removed.”

When will things be back to normal? According to the Ports of Seattle and Tacoma,

Operations at our terminals resumed Saturday evening. We are uncertain how long it will take to move the remaining cargo on our docks and awaiting vessels, and to assess the effects this has had on our gateway.

The Seattle Times notes that

It will take six to eight weeks for West Coast ports to recover from the cargo backlog, according to the Port of Oakland and the National Retail Federation, which represents stores that resorted to stockpiling seasonal merchandise in warehouses and shifting to East and Gulf Coast ports. The backlog swelled as the two sides quarreled over a new deal.

KUOW has a good interview on the impacts of the slowdown, including the importance of the ports to keeping Seattle and Tacoma competitive.

Remainders: liquor, apples, jobs

As we wrap up the week, here are some items of interest:

  • The Office of Financial Management released a paper on the impacts of I-1183 (liquor privatization). Sample line from the report: “Thus, pre-privatization, the LCB mission was achieved: to induce and maintain a liquor market characterized by allocative inefficiency, inhibiting full market demand.”
  • Jon Talton on UW President Michael Young moving to Texas A&M: “Young was said to be impressed by the willingness of Texas lawmakers to invest in higher education.”
  • NPR has a map showing the most common job in each state from 1978 to 2014. Watch as Washington’s most common job moves from secretary to software developer.

Podcast: Policy Today

 

Above is the first episode of our new podcast.

In it, Lew, Kriss and I talk about the recent revenue collections report, the December employment report, and the port slowdown.

For more on these topics, see these blog posts:

You can subscribe to the podcast here, or watch the blog for future episodes. Let us know what you think.

Opportunity Washington: Priorities for Shared Prosperity

Yesterday Opportunity Washington: Priorities for Shared Prosperity was launched. Opportunity Washington was developed by the Washington Alliance for a Competitive Economy (WashACE), which is a partnership of the Association of Washington Business, Washington Roundtable, Washington Research Council and Enterprise Washington.

Opportunity Washington is “a roadmap for expanding Washington’s culture of opportunity to individuals, families, employers, and communities in every corner of the state.” The main priorities are:

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Alaska Airlines CEO Brad Tilden helped launch Opportunity Washington at the AWB Legislative Summit in Olympia. See here for AWB’s take.

Close to our hearts here at the Research Council is (surprise!) the research behind the initiative. See here for the full report, which “identifies a long-term policy framework that state leaders should pursue to build on current strengths, address areas for improvement, and ensure Washingtonians have access to rewarding life and career opportunities.”

Progress on Government Reform

In December, Governor Inslee reported on the progress of the Lean/performance management program, originally conceived at MIT and instituted by the legislature to create savings and efficiencies in the delivery of government services. This interesting reform initiative has progressed due in no small measure to over $6m worth of pro bono training efforts by many Washington businesses, including Research Council members Alaska Airlines, Premera Blue Cross, and The Boeing Co.

22,000 state employees, among them over 9,000 managers, have received training in lean management implementation, giving one hope of cultural and structural improvements within the agencies that could pay big dividends down the road. To date OFM is making modest claims of success, including $5.92 million in savings, $27.4 million in costs avoided, and $3.16 million in additional revenue.

One metric in the report that particularly caught my eye—with my driver’s license due for renewal soon—in 2013 “Washingtonians saved more than 1 million hours of wait time at driver licensing offices compared to 2012.” To study and perhaps celebrate other successes, you can view the full report  here.

 

 

Seattle businesses win when the Seahawks do

Some interesting data points in this TechFlash story on the economic impact of Seahawks playoff games:

  • About half of the attendees come from outside of King County.
  • Hotel occupancy rates are usually 50 to 60 percent on January weekends. “But when the Seahawks hosted home playoff games last year, occupancy rates jumped above 90 percent.”
  • Visit Seattle estimates that “visitors are expected to spend a total of about $6 million more than usual this month. That’s the equivalent of one or two large, city-wide conventions coming to town.”

As the story closes, “So football fan or not, that’s one reason to keep cheering on the Seahawks.”

Related: This week PubliCola questioned the practice of Seattle Metro buses displaying the Seahawks logo. Perhaps, given the economic impact of the games, Metro isn’t just showing civic pride but also good business sense.

New WRC president

We are pleased to announce that Lew Moore has been hired as our new president. The press release is below:

 

WASHINGTON RESEARCH COUNCIL HIRES NEW CHIEF EXECUTIVE

The board of the Washington Research Council, a non-profit, non-partisan public policy research organization, is pleased to announce the hiring of Lew Moore as its new president.

With decades of public policy experience at the federal and state levels, Mr. Moore brings a strong history of consensus building, academic research, and a rich understanding of Washington state issues that are confronting large and small businesses alike.  He succeeds the Research Council’s longstanding former president, Richard Davis.

“After many years of strong leadership by Dick Davis, the board is excited about the opportunity under Lew Moore’s leadership to expand the Research Council’s capacity to educate policy makers, the media, and general public about policy issues that impact our region’s competitiveness,” said board chair, Susan Champlain.

The Washington Research Council’s membership is comprised of many small, medium, and large businesses. With priorities around education funding, tax policies, climate, trade, and host of other issues confronting legislators during the upcoming legislative session, the Research Council will continue its role as a significant voice in educating lawmakers on the potential impacts of these important policies.

“Our region has so much going for it today,” stated Lew Moore. “We need to make sure our policymakers have solid, well-researched information in making decisions which will impact the ability to grow and create jobs.  I look forward to strengthening the Research Council as a leader in the effort to foster prosperity and expand opportunities here.”