While the overall perception among urbanites might be that Washington state is enjoying a robust economy, the disparity between the economic health of urban and rural communities is widening.
A recent jobs report published by the Association of Washington Business identifies concerns that contribute to urban/rural economic gap, but also highlights what we think are important ideas to help rural economies from falling further behind.
The report points out that rural communities lag behind urban centers in the areas of job growth, employment rate, and median wages, among other economic disparities.
The most expensive need identified in the report to help close that gap is billions of dollars worth of long-term road, bridge, and other infrastructure improvements statewide.
Meantime, we believe the report’s recommendations regarding tax fairness, regulatory reform, and rural broadband should be closer to within reach.
AWB counts Spokane County among eight urban counties in Washington state, while all other Eastern Washington counties are among the 31 considered rural.
Job growth in urban areas increased by 1.5 percent between 2012 and 2016, while the average job growth rate in rural counties was barely half that. Similarly, AWB says there’s a pronounced wage gap between rural and urban counties.
To help reduce the jobs and wage gap, the state should apply tax incentives fairly across the manufacturing sector statewide so that manufacturers in rural areas are on the same playing field as far as tax breaks that urban-based Boeing Co. and other aerospace manufacturers have enjoyed since 2003.
Gov. Jay Inslee vetoed a legislative attempt last year to do just that. He was wrong. The same job-retention rationale for granting aerospace tax breaks should be used for manufacturers statewide.
While nearly a quarter of the state’s jobs are based in rural areas, living-wage manufacturing jobs there are falling further behind health care, social assistance, retail trade, agriculture, and educational services job sectors.
The comparatively high tax burden Washington state businesses pay is compounded by a high degree of state regulation—disadvantages the AWB says are magnified in rural areas. One state-controlled area that we agree should be revisited is the workers compensation system. AWB claims that despite an attempt at reform in 2011, the Washington state workers compensation system remains one of the most expensive and administratively complex in the nation.
On this front, the state should do more to see that cost savings intended by the so-called reform are realized, or allow businesses to explore other options to the compulsory state system.
Another contributor to the gap between the urban and rural economies is the disparity in broadband access. AWB estimates that 200,000 to 400,000 rural residents across the state have no broadband access, including many residents in Lincoln, Adams, and Ferry counties, among several other rural Eastern Washington counties.
With the internet’s growing role in commerce, education, and everyday life, reaching all of the state with broadband is critical to leveling the field for access to a number of digital technologies that urban residents take for granted.
Improving tax fairness, the regulatory climate, and broadband access will help slow the urban/rural divide in the near term, as we grapple with major statewide infrastructure funding and improvements that will benefit commerce in the future.