When it comes to whether our state can continue to maintain and attract good-paying jobs, some of our elected leaders seem to have self-image problems that simply aren’t based in reality.

The recommended therapy is simple: Stop believing the politically motivated, demonstrably untrue rhetoric within the state that suggests this is a bad place to do business. Instead, start looking at what national business publications and public policy organizations -- which don’t have an agenda or vested interest in the outcome -- are saying about us. And finally, work together to build on our considerable business-climate advantages to make Washington an even more attractive place for businesses and industries.

This is the first of a series of articles, "Outside the Echo Chamber" from the Washington State Labor Council, which aims to regain some perspective about our state's business climate and examine the successes we can build upon as business, labor and government leaders work together to maintain and increase the number of good-paying jobs in this state, particularly in the aerospace industry. 

THE BOEING COMPANY’S decision to add a second 787 assembly line in South Carolina instead of Washington has set off a frenzy of hand-wringing speculation among public officials and opinion-makers about whether our state is competitive enough to keep Boeing and other family-wage jobs in the long term. (For its part, Boeing said the decision was not a reflection of Washington’s business climate but was based on the company’s desire to avoid work stoppages by expanding into a state that actively discourages union membership.)

In this context, it’s easy to understand why Washington’s business lobbying organizations -- and the various corporate-funded think tanks and public policy organizations in the state -- have seized upon this fear as an opportunity to pursue their agenda. Despite the company’s own assertions to the contrary, they seek to blame Boeing’s decision on our state’s "unfriendly" business climate. They do so with a clear agenda: to cut business taxes and regulations. That’s what they do. The day business lobbying groups decide taxes are low enough and regulations are fair enough is the day they go out of business.

Does that mean their gripes should be ignored? Of course not. Their concerns are sometimes legitimate and deserve to be addressed. But it does mean that sweeping claims that Washington has a poor business climate or isn’t competitive with other states, should be taken with a grain of salt. Given the potential public policy implications of such sentiments, these declarations call for independent analysis and scrutiny.

IS IT TRUE? Is our state a bad place to do business? As it happens, the answer you get from outside the state is very different from what we’re hearing on the inside.

(A 2009 study by Deloitte Consulting suggests Washington fairs poorly when compared to other states competing for aerospace industry jobs. This study can’t be considered independent, given that Boeing is one of Deloitte’s major clients. Deloitte received more than $100 million in fees from Boeing while "consulting" for the state. Despite this clear conflict of interest, Deloitte was also hired by the state in 2003 to recommend how to secure 787 assembly work. Deloitte successfully recommended that its client get a $3.2 billion tax break. So it came as no surprise in 2009 when Deloitte’s study recommendations conformed precisely with Boeing’s legislative agenda. It simply cannot be considered an objective analysis of the state’s business climate.)

They say we have comparatively low business taxes, a lighter regulatory burden, a highly skilled and highly trained workforce, excellent higher education, and for those reasons and many others, our state economy outperforms those of other states.

What follows is a sampling of those national rankings, including how Washington compares with West Coast neighbors Oregon and California, plus South Carolina, North Carolina, Kansas and Texas, which are the states identified in the Deloitte study as our chief competitors for aerospace jobs: (The titles link to those publications' and organizations' analyses.) 

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Washington – 2nd North Carolina – 5th Texas – 8th Oregon – 10th Kansas – 15th South Carolina – 25th California – 38th

Forbes Magazine's "Best States for Business" 

Washington ranked near the top in many categories, including access to skilled labor, regulatory environment, and growth prospects. We have risen from 12th to 2nd in the past four years. Forbes also recently ranked Washington No. 1 in retaining our college graduates in jobs in the state as opposed to the “brain drain” many other states are experiencing where graduates move elsewhere.

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Washington – 4th Texas – 5th South Carolina – 11th Kansas – 33rd Oregon – 34th North Carolina – 38th California – 47th

The Small Business & Entrepreneurship Council’s 2009 Business Tax Index

This Virginia-based group advocates for lower business taxes across the nation and ranks states "according to the costs of their tax systems for entrepreneurship and small business."  Among the taxes included in the assessment are income, property, inheritance, unemployment, and various consumption-based taxes, including state gas taxes.  (The state with the lowest taxes ranks 1st.)

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Washington – 9th Texas – 11th Oregon – 14th South Carolina – 26th Kansas – 32nd North Carolina – 39th California – 48th

The Tax Foundation's 2010 State Business Tax Climate Index

The conservative Tax Foundation intends this index to be a "tool for lawmakers" in assessing how their business tax climates compare with other states and points out, "States with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth." (The state with the lowest taxes ranks 1st.)

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Washington - 1st Texas – 4th Oregon – n/a California – n/a South Carolina – n/a North Carolina – n/a Kansas – n/a

U.S. News and World Report's "7 Best States to Start a Business"

This ranks which states where the best for entrepreneurship and starting a business. (Only the top seven states are listed.)  In ranking Washington No. 1, U.S. News and World Reports cites our tech-intensive economy, low taxes, and the highly productive manufacturing workforce and high wages. (That's right, folks, high wages aren't just a higher cost of doing business, they get spent and circulated in the state economy -- and that's good for the state's businesses.)  The report also notes that Washington state leads the nation in value added per production hour -- the difference in value between inputs in the production process and the value of units as finally sold.

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Washington – 2nd California – 8th Oregon – 15th Texas – 18th North Carolina – 24th Kansas – 31st South Carolina – 34th

The Kauffman Foundation's State New Economy Index

As it "works to harness the power of entrepreneurship," this nonpartisan public policy group poses the question, "To what degree does the structure of state economies match the ideal structure of the New Economy?"  It measures "knowledge jobs, globalization, economic dynamism, transformation to a digital economy, and technological innovation capacity."

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Washington – 8th Oregon – 11th Kansas – 14th Texas – 24rd North Carolina – 30th California – 32nd South Carolina – 45th

The 2009 State Competitiveness Report of the Beacon Hill Institute at Suffolk University

This measures a wide range of variables, from fiscal policy to business development, to compare states' ability "to attract and retain business and to provide a high standard of living for its residents over the long run." 

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Washington – B Kansas – C California – C Oregon – C South Carolina – C North Carolina – D Texas – F

The Corporation for Enterprise Development's Development Report Card for the States

CFED is a nonpartisan, best-practices think tank, whose sponsors include Bank of America and Wal-Mart. It assigns letter grades using "67 measures to provide a relative, state-by-state assessment of economic development." It's Performance Measure "captures the 'return' on public and private investment: employment, income, the distribution of each within the population, stewardship of finite natural resources, and social conditions.

Washington – A Oregon – A Kansas – B California – C North Carolina – C Texas – D South Carolina – D

In the same report, CFED assigns a grade for Development Capacity, which measures "conditions and inputs that firms need to profit" in the future, including "an education system that provides students with skills for 21st century jobs, physical infrastructure, and financial, natural, and technological resources."

Washington – A Kansas – A California – C Oregon – C Texas – D North Carolina – D South Carolina – F

And finally, CFED’s new Asset and Opportunity Scorecard assesses states' performance in terms of "financial security, business development, homeownership, health care, education, and tax policy and accountability."

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U.S. Department of Labor's Union Density Rankings

Washington – 4th (19.8%) California – 6th (18.4%) Oregon – 10th (16.6%) Kansas – 36th (7.0%) Texas - 46th (4.5%) South Carolina – 48th (3.9%) North Carolina – 50th (3.5%)

Here at the Washington State Labor Council, this is one of our favorite rankings.  In the context of the above-listed rankings, it dispels the myth that having a strong, vibrant labor movement is bad for business.  Washington is among the most heavily unionized states; about one in five workers are union members.

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YES, THERE ARE A FEW business climate rankings that don’t rate Washington so highly. For example, Site Selection magazine’s annual survey of corporate site seekers didn’t place Washington among its Top 25 states for 2009. And of course, this magazine’s rankings are cited by business lobbying groups within Washington state. Meanwhile, with every new positive assessment of our business climate, state business groups go into "damage-control" mode by picking apart each study’s methodology and explaining why these national groups just don’t understand the unique burdens state and local governments place on businesses in our state.