ECONOMIC REPERCUSSIONS from the move of the Boeing brass to a more centrally located U.S. city should be more symbolic than substantial, say local economists.
“In very simple terms, we’re losing something like 500 high-paying jobs,” says Dwight Dively, the city of Seattle’s finance director. “That has an effect, but in a population of 550,000, it’s not a big number.”
Factored out over the 1.7 million jobs in the Seattle metro area (comprised of King, Kitsap, Pierce, and Snohomish counties), it’s an even smaller drop in the bucket, says economist Dick Conway.
As co-publisher of the The Puget Sound Economic Forecaster, a quarterly newsletter that spotlights local economic trends, Conway is by profession a Boeing-watcher. He notes that the local economy weathered a far more significant Boeing blow when the airplane giant cut some 25,000 area jobs between 1998 and 2000: “We withstood the loss of 25,000 jobs over a short two-year period without going into recession.”
That flurry of Boeing pink slips was a major factor in bringing the Puget Sound area’s annual employment growth rate from 5 percent in 1997 down to about 2 percent last year, Conway says, yet Puget Sound employment rolls are still growing at about twice the national average.
The conventional wisdom that the relocation of Boeing’s top dogs could presage future job cuts is mostly speculation, according to Paul Sommers of the University of Washington’s Evans School of Public Affairs. “Sixty percent of [the company’s] revenues come from airplanes, so they’re going to be in that business,” he adds.
Conway notes that Boeing just funded a major expansion of its Paine Field facility (south of Everett) after rejecting alternate sites in two other states. Leaving their new digs behind wouldn’t make economic sense, he says. “That would be a very serious move and that would be a costly move.”
As the Boeing headquarters building sits within city limits, Seattle will lose some business and occupation tax revenues, says Dively. But depending on what business eventually moves into the vacant building, the city could end up making money on the change. “The thing that’s much more interesting—and much harder to figure—is what symbolic difference this makes,” he says.
After almost two decades of economic expansion, many state residents view continuing economic growth as a fact of life, says Sommers. Washington state largely rode out the national recession of the early 1990s and probably hasn’t suffered a real regional recession since the early 1980s. “We’ve been in a really unprecedented expansion period,” comments Sommers.
Currently, such factors as falling dot-coms and the declining flow of Microsoft stock-option money into the local economy (owing to the stock market malaise) have created a “mild-to-serious slowdown” in the region, say economists. Conway also warns of two additional looming economic threats: a possible national recession and soaring regional energy prices.
But whether the situation is dire enough to discourage business start-ups and new corporate investment remains to be seen. Conway says it’s just common sense that economic bad news ripples through the economy. For example, a few rounds of major layoffs in any city will hurt retail sales and damage vulnerable industries such as the home construction market. “If you think you might lose your job, you’re not going to go out and buy a house,” he says.
And despite Boeing head Phil Condit’s vague criticism of the region’s business climate, the state’s largest employer has never had any problem getting the ear of local officials (or pocketing tax breaks from Olympia legislators). Boeing’s cry of “We want lower taxes and better roads” isn’t the sound of a company in revolt, says Conway, it’s just the usual business rhetoric.
What Really Happened (2) Cash just wants to be free
Boeing CEO Phil Condit’s statements to The New York Times make it perfectly clear that he is moving the Boeing headquarters away from Seattle for one reason: to prove to Wall Street that he can be trusted to ruthlessly serve the stock market unburdened by moral or emotional attachment to people or place.
His action should be no surprise to Seattle. For the past 30 years, the largest U.S. corporations have moved ever more aggressively to free themselves from loyalty or obligation to nation, community, and employees in the quest for ever-rising share prices.
Global corporations are creatures of money, beholden solely to the beck and call of share markets. They have neither soul nor conscience. They are incapable of guilt or compassion and their promises mean nothing. In short, they are sociopaths. Let Seattle be forewarned. Our economy and identity are best grounded not in our reputation as a headquarters for feckless global corporations but in the strength of our local independent businesses, the vibrancy of our community institutions, and the beauty of our natural environment.
David C. Korten wrote the international best-seller When Corporations Rule the World.
