Friday, June 10, 2011

Big Business and Comp; Policy Affects Small Business

WA Governor Gregoire cites that state's recent reform legislation (WorkCompCentral News - Governor Pitching Comp Reforms to Keep Boeing in State: WEST [2011-06-10]) for keeping Boeing - the state's biggest single employer with a direct payroll comprising more than 75,000 workers - in the state manufacturing its 737 jet along with other aircraft. 

By comparison, the next biggest WA employer is Microsoft with just over 40,000 workers in Puget Sound (http://www.microsoft.com/presspass/inside_ms.mspx). 

The total population of Washington according to the US Census Bureau was over 6.6 million as of 2009. That means that Boeing employs just 1.1 percent of the population. I couldn't help but wonder how a single employer could have such a huge policy impact, but then I examined the "trickle down" numbers.

While the number of workers that are directly employed by Boeing is small compared to the overall working population of Washington, the economic impact of Boeing on the state is huge, with $4.5 billion in economic activity in the state per year attributed to the aerospace company, hundreds of contracting smaller firms in the state employing thousands of others, trickle down to other small businesses in the way of restaurants, housing, and ancillary small business services (all of the Washing stats I cite are based on this document: www.washace.com/docs/BoeingEconomicContributions.pdf).

Another 10,000 jobs are in Washington that directly support Boeing business and according to the Washington Alliance for a Competitive Economy more than 10 percent of all jobs in the state are dependent on Boeing.

Aerospace jobs pay well, with the average wages being about $85,000 per year, with much of that attributed to trickle down to smaller businesses such as restaurants, lodging, dry cleaning, groceries, housing, etc.

While Boeing is self insured in Washington (Washington is one of the few remaining state run monopolistic systems) it must still follow that state's laws, so the lesson to learn, apparently, is that what's good for Big Business is good for Small Business. I'm not sure I agree on a micro-economic basis, but it's hard to argue with the overall impact that Big Business has on a small state's economy.

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