Recession Reaches Washington: A State Response

Report | February 12, 2009 | By Marilyn Watkins

Executive Summary

During the first half of 2008 Washington’s economy slowed but looked relatively healthy compared to the rest of the United States. In September, as job losses accelerated nationally, Washington, too, began shedding jobs. By December 2008, Washington had 54,800 fewer jobs than twelve months earlier. Announcements of layoffs by major employers in January 2009, including Microsoft, Boeing, and Starbucks, indicate the state has not yet hit bottom.

The recession has caught up with Washington. It is more important than ever that the state avoid drastic spending cuts that could feed the downward spiral. The 2001 recession provides clear evidence of public policies not to follow. The federal government enacted tax cuts focused on the wealthy. Washington State relied primarily on cuts in public services to balance the budget. With these policies, Washington, along with much of the country, endured a three‐year job slump. Job levels of 2000 were not attained again until 2004.Once economic growth resumed, most of the benefits went to the wealthiest while the majority of families struggled. In the current recession, President Obama’s strategy to invest in infrastructure and a range of services shows more promise.

Unfortunately, Washington State appears poised to repeat the mistakes of the last recession by slashing public services– and jobs –which could deepen and prolong the effects of the recession locally.


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Posted in State Economy