Seattle's Forgotten Middle......

A lot of attention these days is being paid to the needs of research universities and the highest paying jobs at high tech and biotechnology companies. But the vast majority of workers in the Seattle region have worked in middle skills job with family wages and good benefits. These are the folks that have been hit the hardest by the deep recession and the folks whose wage recovery is the key to our recovery. And there simply isn’t going to be a recovery if these hard working people are unable to get the skills that are required by the jobs that are growing as the economy begins to slowly lift off.

The vast majority of jobs in the Seattle area are skilled professional and technical positions that range from health care on First Hill and throughout the city to aerospace, construction and manufacturing jobs in SODO and the Duwamish, and to office occupations such as accounting and office management in the city’s big downtown business and financial service industries.

The jobs we lost going into the recession are not the same ones that are going to get us out of it. Nobody has been hit harder by the great recession than the middle wage skilled workers in these companies and organizations. People such as John Woeck, for instance, who worked for seven years as an electrician just as his wife lost her job of 14 years, exhausted his savings, and was almost out of unemployment funding to support their three children. Vinita Vigil, enrolled at Seattle Central Community College, worked for a digital graphics company before she was laid off. She was the primary source of income for her family of five, and she was forced to sell her house.

One of the most distressing features about today’s recession is that Seattle has thousands of job openings at the same time it has high unemployment. Economists say this is because the recession accelerated the decline of some industries, such as housing construction, at the same that that others requiring far different skills, including health care, emerged stronger. Some economists predict that this disconnect is likely to grow as the economy continues to develop jobs that require specialized skills. And the difference for those who have lost their jobs could be fine-tuning of their skills in a job training program that takes six months to two years to complete.

Construction, real estate, and financial service workers have seen jobs with their expertise disappear, while skilled work in health care, accounting, fashion design and I-T remain unfilled. A State’s Workforce Training and Education Coordinating Board 2010 survey of employers indicated that the vast majority of these job openings require a post-secondary vocational certificate or degree. The survey indicated that 62% of employers hired people and 26% or 10,500 firms in King County were unable to find skilled employees.

Fortunately, there is a solution. The Community and Technical College Worker Retraining Program was designed to get people who lost their jobs in declining occupations back to work in new and growing fields. Even in the depth of the recessions, three out of four graduates were able to find work within 6 months of completing their programs.

John Woeck retrained from work as an electrician in the housing industry to job in the heating, air-conditioning and ventilation industry. He was also able to convince his employer to hire two of his classmates. Vinita Vigil was able to find work in the ….. and now has an income to support her family.

This year, in order to meet record demand from individuals and families such as the Woecks and Vigils, the state legislature bumped up funding for the program to allow the program to serve more 14,000 unemployed individuals across the state. However, the funding was for one year only and on July 1, the program will be forced to cut services nearly in half leaving thousands of unemployed workers stranded midway through their programs. This will leave thousands of jobs unfilled and perhaps create a bottleneck in the economic recovery of our region.

The Donner Party

Former Gardner Chief of Staff and entrepreneur Denny Heck once characterized the current legislative session as "the Donner Party". My take on it - a session where year after year of economic disaster and budget cuts has led to the increasing starvation of human services and education programs. Program advocates, normally allies, have resorted to eating their own in order to keep their programs alive.

Nowhere is this more true than in higher education.

The Washington Labor Council has been trying to increase unemployment benefits to long time unemployed workers who have been laid off from the recession and lived on low paying unemployment insurance for years. Last week, out of fear that community colleges were trying redirect that money to save the Worker Retraining Program, the Labor Council began to tell legislators that the worker retraining program is a disaster and a waste of money (despite evidence to the contrary). Labor's tactic is nothing new. They learned it from the Association of Washington Business, who in the mid-90s attacked the quality of the program as a way to attack the funding source which at that time was a diversion from the UI trust fund.

Organized labor and community and technical colleges have long been allies in promoting the worker retraining program, which provides unemployed workers the opportunity to train in high demand fields. Labors fears turn out to be wrong in this case. No legislative proposals to use unemployment funds for worker retraining has been proposed this year. But the damage to the program from labor's threats are severe and unemployed workers could find their program cut off midway through the year.

Advocates for the University of Washington and other public universities have decided that there best hope for minimizing cuts is to cannibalize community college funding. University trustee Craig Cole and major backer Dan Evans have began to publically attack colleges as a "the worst possible place to start a college education". Community college advocates have found themselves under attack in conversations with the Seattle Times and other Seattle downtown establishment figures after university advocates have been in to see them.

This kind of cannibalization should be no surprise in these tough times. In the end, unfortunately, all of players could end up being losers.

Tax and Spending - What did the voters vote for?

A mere few weeks ago, Washington's voters voted anti-tax on three major initiatives. They overwhelmingly voted down an income tax on upper income taxpayers dedicated to education and health care. They overwhelmingly voted for an initiative that required a 2/3 vote of the legislature on new taxes and they overwhelmingly voted to rescind the pop and candy tax the legislature imposed last session. The sum result of all these measures is a clear signal to policy-makers that they would rather see budget cuts than tax increases.

But were voters aware of what the consequences would be? Good question. The slow growing economy has stifled state revenues by as much as 20% for the next three years and making up that deficit through budget cuts alone is going to result in devastating cuts for state programs that have already been slashed each year for past three years.

For one, I'm not sure a large percentage of the voters knew what programs will end up being cut. The problem is there are not a lot of choices. About 60% of the state budget is already off limits due constitutional protection of most of the education budget as well as federal requirements on big programs like Medicaid.

What's left is basically all of higher education and social service programs like the Basic Health Plan which provides insurance for low income working families, the Security Lifeline Program which provides income supports and medical care for disabled and mentally ill clients and much of the TANF program that provides income support and child care to primarily working mothers. These social service programs are the safety net for those who have been hit the hardest by the deep recession. Programs like the community college Worker Retraining Program that provides funding for unemployed workers who have lost their jobs in declining industries to train for the jobs of future are also likely to be on the chopping block.

Many people believe that in reality we could cut spare these programs and cut the salaries and benefits of state workers more severely. The problem is, that these cuts simply don't add up to much money. Raising state workers co-pays by 20% only save a hundred million dollar or so and adding an extra 10-20 furlough days, less. The problem is that the recession's hit on the state budget is so severe and so much of the budget is off limits, that draconian cuts have to occur to virtually every area of the budget that's left.

The impact of the Eyman initiative requiring a 2/3 vote is exaggerated. While there is little chance 2/3 of the legislators will ever agree on a tax increase, the initiative still allows the legislature to send voters a choice. The legislature could clearly send the voters a referendum that would impose a tax to support key selected programs.

Initiative 1098 did not clearly offer voters a choice between taxes and program cuts. The initiative, which taxed upper income tax and dedicated the money to education and health care was very loosely crafted. Voters believed, and rightly so, that there was no requirement that the state limit revenues to those specific areas (they could cut funding from other sources).

I think it is sheer speculation to try and guess as to whether or not voters would choose between a tax increase and the destruction of the safety net. Over the past three years a lot of polling what done on this very question and the results were a toss-up. But I think it would be irresponsible to take the option off the table. The voters should have choices that they can clearly understand.

The Cold, Mean Season

Seattle's only remaining daily newspaper went on a rampage against an income tax initiative that would have imposed a 5% tax on households earning more than $400,000 or single payers over $200,000 for single (At 5%, the wealthiest 5% among us would be paying less than they do in the people's republic of Idaho, less than in Oregon and less than in California) They argued vehemently that we need to cut programs not raise taxes. And they are argued just as vehemently that we need to increase education spending and for God's sake we need more funding for the University of Washington. What's left to cut? Well, according to the Times and many Democrats and Republicans alike, government waste and special interests.

Hardly. What is left is the Basic Health Plan which provides health care to low income working families. The Security Lifeline Program which provides heath care and a very small living stipend for the mentally ill and those at the very bottom. TANF which provides income support and more importantly child care so low income mothers can actually hold a job.

Apparently, the voters agreed with the Times and voted down the income tax which would have been dedicated to health care and education. They passed an initiative that would require a 2/3 vote for any tax increases. They vote to cut taxes on candy, and pop (equal to about the funding level for the security lifeline). No taxes screamed the conventional pundits. We need to reset to a new smaller government.

Hmmm. Smaller for who? Smaller for the least fortunate among us. Smaller for the sick who have lost jobs and their health care benefits. Smaller for the mentally ill who are wandering the streets without medication. Smaller for mothers who, without child care, who can't afford to work.

It's a cold, mean season in Washington State.

How did education reform ever get so anti-teacher?

I'm amazed at how most education reform efforts seem to neglect the importance of harnessing the ideas of teachers in turning many of our troubled schools around. The generic education reform argument seems to go that teachers and the school system they work in, have gotten so bureaucratic that we have to start over. We should provide state funding for the creation of new charter schools where stripped of union contracts and complex rules, we can start to gets things moving.

To me this is terribly ironic. After all, one of the first proponents of charter schools was Albert Shanker, President of the American Federation of Teachers in 1988. Shanker's idea was that groups of teachers would be able to run their own school within regular schools and pursue innovative ways of educating disaffected students. Released from contradictory legislative dictates and complicated school district rules, teachers would be able to innovate and solve tough problems.

Shanker's idea was that a group of six or more teachers should be able to submit a proposal to start a new school. They would be able to try out different ways of teaching to reach students who weren't responding to what schools are currently doing. Proposals would be reviewed by a joint teacher and school district panel. The approved schools would be given 5 or 10 years to try out their ideas and progress in the programs would be shared with others. If a method was particularly successfull, districts could bring the new ideas to scale.

We need to turn this education reform equation around. Instead of measuring performance to reward and punish teachers, we need to harness the power of teachers to innovate and teach in new ways and bring what we learn to scale.

One Way to get the economy moving again

The Deficit Reduction Commission co-chairs have come up with a big solution to the long term budget deficit of the federal government. Their proposals simplifies tax rates but raises revenue by eliminating loopholes, it raises the retirement age, cuts Medicare and Medicaid spending, cuts the defense budget and slashes domestic spending. And most importantly it reduces the deficit from 8% to 2.2% of GDP.

This is a heavy lift but Democrats have done it before. The Clinton administration cut the Reagan/Bush deficit and left Bush II with a surplus.

And the details of a final package will not likely look like this one. But the co-chairs draft report puts a lot of major pieces on table where everyone shares the pain and lays out the parameters of the solution.

This is a big deal and could very quickly get our economy moving again for two reasons:

1) The long term solution should allow Congress to move forward on an immediate stimulus. We need a stimulus to get the economy moving. Insuring that the stimulus will be made up quickly with future cuts makes this feasible. It's all about timing. You can't cut spending now. That would be idiotic. That would lead to a double dip recession. But you have to close the deficit in the future in order to keep interest rates down and avoid inflation. So, you jump start the economy now and when it starts moving you start cutting.

2) Passage of the deficit reduction plan will assure markets that long term investments are a good bet. As our deficit grow bigger and government borrowing sops up a bigger supply of credit in the economy, we run the risk of ramping up interest rates and creating another recession.

A short term stimulus and a long term deficit reduction package are the key to avoiding a double dip recession and getting our economy moving again.

We need to pressure Congress to get this done and done quickly. Do we have the political courage to move forward?

Not a Republican tide, not 1994, not In Washington

Despite the deepest recession in 70 years, legislative Democrats evaded the sweep that impacted much of the rest of the country.

The simple fact of the matter is that while Democrats lost seats, 3 to 4 in the Senate and 4 to 5 in the House (one race in each is subject to recount), the change is far below average for off year elections for the part in power

With very few exceptions, since the founding of the state, the party of the President loses seats in the state house in the next off year election. The House is a better state weather vane since only half of Senate seats are up every two years.

At this point in time, under Democratic President Obama, House Democrats have lost 4 to 5 seats and still hold a commanding lead in the state house 57 to 41 - a sixteen vote margin.

In previous off year elections the party of the President has seen bigger losses. in 2006, the Republicans in the Bush era lost 7 seats and in 2002, 3 seats.

In the Clinton days, Democrats lost 27 seats in 1994 (1998 and 1990 appear to be anomalies probably because the previous tide was so big against the party of the President) . In 1986, under Reagan, Republicans lost 20 seats and in 1982 they lost 11 seats.

During the Carter year, 1978, Democrats lost 13 seats and in 1974 under Nixon, Republicans lost 5 seats. In 8 of the last 10 elections, the party of President has lost seats and the average is 10.4 significantly higher than 2010.

Despite the horrible recession and the off year election of the party of the President, Democrats did pretty well.