Mandates not the solution to outsourcing

Guest Columnist

  • Friday, October 3, 2008 2:58am
  • Opinion

When legislators return to Olympia in January, some will renew their push to stop “outsourcing” by imposing a whole new set of restrictions on state purchases. Their stated purpose is laudable: Halting the flow of jobs to out-of-state or foreign companies by mandating that the state purchase only goods and services produced in Washington State.

It sounds good in theory, but it won’t work.

* State government could stipulate that it buy its coffee only from Starbucks because it is roasted and packaged in Seattle. But since coffee beans aren’t grown here and Starbucks depends on foreign suppliers, wouldn’t Starbucks be disqualified?

* Lawmakers could insist on buying from Grays Harbor Paper Co., but that company has no pulp plant in Washington and buys its pulp on the open market. So would Grays Harbor have to segregate its pulp and sell the state only product made from Washington trees?

* A number of vehicles in the state fleet are Toyota Prius. But the Prius, a cutting edge fuel efficient gas-electric car, is not assembled in Washington – it’s not even made in America. If the Legislature insists that state employees drive only vehicles “Made in Washington,” they may only be navigating Kenworth trucks, which are assembled in Renton. But then again, not all of Kenworth’s parts are “Made in Washington” and they come from around the world.

This debate can be carried to extremes, but it points out the difficulty of regulating the free flow of goods and services. And no one is talking about what it will cost for the government to police state purchases or the added money taxpayers would fork over because the state bidding is restricted to “Washington Only!”

Are lawmakers and elected officials ready to stand for election on the platform that they’ve started a whole new cumbersome and dysfunctional bureaucracy? Better yet, they raised your taxes to pay for it! Try explaining that one in a 30-second sound bite.

If the Legislature really wants to support Washington employers, there’s a better way. Over the years, state lawmakers have approved a series of mandates and imposed layer upon layer of costly government regulations. These measures make it harder to keep and attract good employers and keep jobs in our state. The fact is, Washington is a high-cost state to do business in.

Rather than try to fix the problem with yet another mandate, elected officials should repeal some existing government requirements that make it difficult for Washington employers to stay competitive.

One place to start is Washington state’s unemployment insurance (UI), the nation’s most costly system. Legislators should eliminate the abuses, implement cost-efficiencies and make it fair for the employers who pay into the system and for those who are unemployed through no fault of their own.

According to the latest WashACE Redbook, our state’s employers pay an average $854 per person in unemployment compared to the national average of $228. Unlike workers’ comp, employers pay all the UI taxes. If unions insist on high benefits for their seasonal workers, let them pay part of the tax, as they do for workers’ comp insurance.

The fact is – costs matter today more than ever. If lawmakers lower costs, Washington will have a better chance of keeping good employers and can actually encourage them to “insource.” In other words, bring more parts production inside assembly plants in places like Everett, Walla Walla or Vancouver.

Wouldn’t it be a vintage year if legislators leaving Olympia in March focused on what it takes to bring jobs back into Washington by actually reducing regulations, taxes, fees and layers of government for all of us?

Don C. Brunell is president of the Association of Washington Business.

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