“Washington state has to play the add-value card, not low-cost-leader ace” Response

November 24, 2009

When I read Jon Talton’s article, “Washington state has to play the add-value card, not low-cost-leader ace,” the title alone got me to thinking.  With the onslaught of globalization in both now and in the coming years, we will have to take an intelligent attitude in order to remain a relevant player in the high-tech world.  As the article says, the opinions are basically divided between two camps:  appeal for money with low costs, or appeal for money with valuable, high-quality commodities.  I agree with Talton:  we need to keep ourselves to a higher standard and use our highly-educated workforce to our advantage, or else we will be dragged down in the race to the bottom.

As a major example for the detriments of companies seeking low-cost solutions, the article points to none other than Boeing, long a staple in the Northwest economy.  Boeing  recently opened a plant in South Carolina, where worker compensation, wages, benefits, and union costs were all much lower than Washington.  Yet if South Carolina is playing the low-cost card, why do they have the nation’s fifth-highest unemployment rate?  Talton asserts that it’s falling victim to its own game – other countries and locations are undercutting even South Carolina’s cheap labor, so if everyone races to the bottom, many more people will suffer.

I agree with this sentiment.  Here in the Puget Sound region we have not only Boeing, but Microsoft, Nintendo, Amazon, Starbucks, Bungie, and numerous other high-tech/commodity companies.  Seattle is the nation’s most educated major city, with 47% of all residents age 25 and over in possession of a bachelor’s degree or higher.  We must use these strengths to our advantage.  If we choose the low-cost path instead, the standards of living and money flow will invariably be negatively impacted, as with South Carolina.  If we instead use these people and companies to lure money, we can continue to enjoy our status as a major hub of high-tech innovation.  In a time of disruptive changes, we can hang on to a higher level of quality and stability if we choose not to send our jobs overseas but to develop more valuable, high-tech jobs here.

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