How will the Boeing cuts affect Seattle and the surrounding regions?
BILL BEYERS: Frankly, I don't think we'll notice as much as we used to. Boeing is such a small percentage of our work force now. They haven't really contributed to our growth recently, and they've been cutting jobs on and off for some time. We are also fortunate that Washington, especially Seattle, is so diversified. We have computer services like Microsoft, biotech companies, and international trade ports, and construction is up. (Hightech has made up 11 percent of Washington's workforce in 2000.)
CHANG MOOK SOHN: In the late '60s, Boeing represented about 12 percent of our total work force. They are now at about three percent. I do think the announcement alone may have a chilling effect on consumers, who will spend less.
20,000 to 30,000 is an awful lot of people. Where will they go?
CMS: It's important to remember that it's not just 20,000 to 30,000. One Boeing job translates into about three lost jobs in the economy because of all the businesses that are dependent on Boeing. The last Boeing reductions in 1998 to 2000 were 25,000 people. Because our economy was growing so much at that time, the economy just absorbed those jobs. Because the economy has been weak lately, Boeing cuts will quicken the pace of the weakening.
Boeing workers make twice the amount of your average Washington state employee, about $62,000 per year. How will the loss of those high-income jobs affect spending in areas like downtown? What particular industries may be affected first?
BB: I think Boeing workers are more likely to spend their money in the suburban malls than in downtown Seattle. But we might soon see reduced sales in sectors like automotive and real estate.
CMS: If consumer confidence doesn't go up, you will see a decrease in people buying big-ticket items like automobiles and homes, and you will see decreases in restaurant and furniture-store business. People will be more cautious and spend less.
Any good news at all, anywhere?
CMS: Washington State has had eight recessions since World War II, and people always think it's going to last forever. But each time an economy suffers a recession, it recovers stronger than it was before.
BB: These cuts could help Boeing be more competitive with Airbus [Boeing's main rival], which would help us in the long run. Also, as far as our economy in general, the recent terrorism attacks may help our economy by bringing government dollars for surveillance and information systems to our high-tech companies.