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The WMS Case for Manufacturing in Washington State

A Case for Manufacturing in Washington State
"Manufacturing spawns more economic activity and related jobs than does any other economic sector. It is the heart of an innovative process that powers the U.S. economy to global leadership."
- Joel Popkin, President of Joel Popkin & Company

Manufacturing is important to Washington state

• Manufacturing represents 13% of all employment in the state, representing 300,000 workers and 16% of total wages, second only to the service sector.
• Much of the state's service sector is driven by needs created by manufacturing and their employees.
• The state's economy is dependent on the competitiveness of manufacturing.
• Manufacturing contributes $26.6 billion to Washington's GSP.
• The median hourly wage in 2000 was $18. Average manufacturing wages in 2001 exceeded $48,000, the highest of all major industry groups.
• Manufacturing represents 17.2% of the state's $2 billion B&O tax revenues ($352.5 million).
• King County manufacturing accounts for 144,168 jobs (2000). Each manufacturing job accounts for 1.5 to 3 jobs in the region's economy.
• Washington exported $29.8 billion in manufacturing in 2000.

Washington Manufacturing Needs Help

• With low-cost energy now a thing of the past, Washington offers few advantages as a manufacturing location.
• Between June 2000 and June 2003, manufacturing employment declined by more than 44,600 jobs.
• In the future, Washington will gain or lose thousands of family-wage manufacturing jobs, depending on:
  • the performance of its current manufacturers
  • the ability of government to be a supporting partner
• Washington manufacturing is facing increased competition from overseas manufacturers and manufacturers in other states.
• Washington manufacturing has experienced significant employment loss compared to other business sectors.
• Washington has the highest rate of new business startups but also the highest number of business closures.

Why Small Manufacturers (less than 500 employees) Are Important

• The competitiveness of larger manufacturers depends on smaller manufacturers to survive.
• In some Washington communities, the local manufacturing plant is the economic basis of the community.
• 99% of Washington firms engaged in manufacturing employ less than 500 employees.
• 63% of all manufacturing employees work for firms that employ less than 500 employees.
• 78% of Washington exports were with small firms of less than 100 workers.
• o Small manufacturers account for more than 99% of all employees.
• Small manufacturers account for 47% of sales in the nation.
• Small manufacturers generate 55% of all innovations.
• Small manufacturers generate the bulk of new jobs, accounting for 75% of net job creation annually.

Washington Manufacturing - A Decade of Change

Table 1 - Sample of Manufacturing Employment by County*

County	1990	June 2000	Change	Growth
State	358,442	313,600	-44,842	-12.5%
King	171,450	131,600	-33,850	-19.7%
Snohomish	48,663	48,100	-563	-1.2%
Pierce	21,651	21,400	-251	-1.2%
Spokane	19,360	18,200	-1,160	-5.9%
Clark	16,716	16,300	-416	-2.5%
Yakima	9,671	11,700	+2,029	+20.9%
Cowlitz	10,220	7,950	-2,270	-22.2%
Whatcom	8,638	8,700	+62	+0.71%

Table 2 - Percent of Industry Employment by Size of Firm*

# Employees	1990	2000	Change
1-9	16,217 - 4%	16,459 - 5%	242
10-19	15,245 - 4%	16,190 - 5%	945
20-49	30,710 - 8%	32,080 - 9%	1,370
50-99	31,407 - 9%	35,528 - 10%	4,121
100-249	46,915 - 13%	54,596 - 16%	7,681
250-499	33,272 - 9%	31,005 - 9%	-2,267
500-999	25,888 - 7%	36,754 - 11%	10,866
1000+	166,218 - 45%	123,301 - 36%	-42,917
Total	365,872 - 100%	345,913 - 100%	-19,959

Note: Totals may not equal 100% due to rounding.

Table 3 - Manufacturing in Washington State*

SIC	Industry	Firms	Jobs	Payroll	Average Wage
	Manufacturing	9,169	345,830	$16,281,288,440	$47,079
20	Food Processing	863	40,942	$1,307,193,883	$31,928
22	Textile Mill Products	48	1,057	$36,690,714	$34,712
23	Apparel	429	6,428	$148,714,480	$23,135
24	Lumber & Wood Products	1,636	32,191	$1,221,875,190	$37,957
25	Furniture & Fixtures	224	4,713	$138,156,601	$29,314
26	Paper & Paper Products	139	15,527	$809,712,230	$52,149
27	Printing & Publishing	1,355	23,646	$831,943,544	$35,183
28	Chemicals	249	6,059	$702,178,751	$115,890
29	Petroleum & Coal Products	34	2,195	$149,987,350	$68,331
30	Rubber & Plastic Products	254	9,936	$316,759,235	$31,880
31	Leather & Leather Products	25	332	$7,356,374	$22,158
32	Stone, Clay, Glass	365	8,937	$326,130,115	$36,492
33	Primary Metals	115	10,937	$510,022,609	$46,633
34	Fabricated Metal Products	661	14,502	$488,863,922	$33,710
35	Ind. Machine & Comp. Equip.	1,031	24,552	$1,315,332,894	$53,573
36	Elec. & Electrical Equip.	349	19,867	$858,112,774	$43,193
37	Transportation Equipment	679	101,026	$5,949,036,570	$58,886
38	Instruments	307	14,480	$834,335,228	$57,620
39	Misc. Manufacturing	406	8,503	$328,885,980	$38,679

*All graph material obtained from the Social and Economic Science Research Center - Puget Sound Division.