Improving Washington state's business climate

Small business owners have spoken, and their message is clear. It is time for policymakers to take action to improve the state’s business climate.
Across Washing-ton, business owners are wondering why our economy is stagnating while the rest of the country seems to be moving toward economic recovery. One answer came in the form of the 2003 Statewide Small Business Conference, where business owners identified the best solutions for improving Washington’s business climate.

The conference was hosted by Washington Policy Center and was co-sponsored by more than 60 business organizations, including every major chamber of commerce. The gathering last month at the SeaTac Hilton provided a rare opportunity for small business owners from around the state to discuss ways to remove the barriers to business success erected by local, state and federal bureaucracies.

And those barriers are not hard to identify. State regulations form a dizzying web of conflicting and burdensome regulations that the average person can‚t begin to comprehend. The tax burden, with its complicated reporting and confusing rates, poses another major hurdle for struggling business owners. Together, the load of taxes and regulations are smothering economic growth, particularly for small businesses.

The recommendations developed by small business owners at the conference offer a workable agenda for reform – one that local and state policymakers can use to help Washington join the economic recovery now gathering momentum across the nation. The success of small business and the prosperity of our region depend on the ability of state leaders to implement meaningful reform.

One key area badly in need of fixing is the state’s costly workers’ compensation system. A better claims process, lower administrative costs and intelligent program management could offset the expensive rate increases planned for 2004. The unemployment insurance system is also ripe for reform. The legislature made some improvements during the 2003 session, but the state’s high benefits levels still work as a powerful disincentive for able-bodied recipients to find work quickly.

Workplace regulations are another area where small businesses need relief. The Department of Labor and Industry’s new ergonomics rule, one the agency issued without the direction of the legislature, is viewed by business owners as unnecessary and highly burdensome. Greater workplace safety is already being accomplished through private initiative the state’s aggressive, top-down approach could actually reverse much of the progress that is being made to improve worker health and safety. Repealing the rule is a top priority for small businesses.

In addition, the state’s high minimum wage, which will automatically jump to $7.16 an hour (the highest in the nation) on January 1st, prices unskilled workers out of the job market, forces small businesses to avoid new hiring and makes it harder for young workers to get valuable on-the-job experience.
At the conference small business owners specifically noted the sharply rising cost of health insurance. They said they want to see non-economic damages for medical liability capped at a reasonable level to help reduce health care costs. Legalizing basic health insurance, without all the state-imposed mandates and restrictions, is another essential step toward reviving the market for accessible, affordable health care.

These and many other recommendations were presented during the conference, each highlighting how government policies hamper small business success and profitability. The full results of the conference will be summarized in an upcoming Washington Policy Center report, “An Agenda for Reform,” to be published later this year and presented to policymakers to consider during the 2004 Session.

Until then, business leaders, policymakers and ordinary citizens need to recognize the importance of small business to our economy. Small businesses provide most of the jobs, produce more new products and are heavily involved in their communities. By re-orienting public policy toward small business success, we not only foster economic recovery, we improve the opportunities and prosperity of all Washingtonians.

Washington Policy Center is a non-profit, 501(c)(3) research and education organization. Contact them at 888/WPC-9272, via e-mail at, or visit them online at