In early June, the financial website WalletHub released its rankings of “Best and Worse State Economies” and Washington led the field of 51 as best by a healthy margin.
WalletHub economists viewed the states from three key dimensions — economic activity, economic health and innovation potential. Then the analysts from Dartmouth and Carthage colleges and the University of Texas-Austin looked at 28 key indicators of economic performance and strength when comparing all 50 states and the District of Columbia. The data ranged from GDP growth and startup activity to share of jobs in high tech industries.
Washington’s overall score was 77 compared with second place Utah with 73. The only other state to crack 70 points was Massachusetts. Each indicator was measured on a 100-point scale.
When it came to highest GDP growth, Washington was the leader and was in the top five when it came to most exports per capita, highest change (most improvement) in nonfarm payroll, highest percent of jobs in high tech industries, and, most independent patents per 1,000 working age populations. Only in highest unemployment rate was Washington ranked in the bottom five.
Much of the research was well underway when the COVID-19 pandemic swept across the world and hit the U.S. three months ago. Before the pandemic lockdown, our state’s jobless rate was 3.8 percent which was slightly above the national average. By April, Washington’s unemployment rate shot up to 15.4 percent (national average 14.6) with nearly 611,000 people without jobs.
Adding salt to our wounds, the state’s Employment Security Department learned its data was less than secure. Thieves walked off with as much as $650 million in fraudulent claims, or as much as one of every $8 paid in benefits during the pandemic, Seattle Times writer Paul Roberts reported. He added the state has recovered $333 million as of June 4.
The pandemic lock down hit small businesses hard, particularly those owned by minorities. For example, in mid-June, the Wall Street Journal reported the number of active black business owners fell by 41%.
WSJ published data from economist Robert Fairlie, University of California, Santa Cruz, who wrote the number of working business owners plummeted from 15 million in February 2020 to 11.7 million in April. That 3.3 million is a stunning 22% drop.
“No group was immune to negative impacts of social distancing policy mandates and demand shifts,” Fairlie added. Minority business owners were hit hardest. About 441,000 black, 658,000 Latino, 1.1 million immigrant and 1.3 million women businesses disappeared. For women, one of four businesses closed.
Fairlie said most industries “with the exception of agriculture” were hit hard with hotel and leisure down 35% and nearly one-quarter of restaurants closed. Only time will tell if those businesses reopen when the lock downs completely lift.
If the pandemic wasn’t bad enough, many inner city businesses have been looted, ransacked and burned in the civil unrest sparked by the tragic death of George Floyd in Minneapolis.
In Seattle, for example, protesters took over a section of Capitol Hill making the police department’s east precinct its headquarters. Protests, mostly peaceful, continue across the nation despite attempts to correct problems with policing procedures.
In the end, the looting and rioting needs to stop. In the end, we must find ways to immunized against COVID-19 and its mutations. And, in the end, as a nation, we have to have effective law enforcement which protects all of us.
For Washington to remain one of the best places for economic growth and in which to live and raise a family, we must have safe streets where shop owners and factories, schools and government leaders can survive and thrive.
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.