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Jobs in Tacoma pay off beyond the dollars commuters bring home from Seattle

It makes a big difference for the local economy if an Amazon employee draws a paycheck from a job the online giant’s Seattle headquarters instead of from the same job in Tacoma.
It makes a big difference for the local economy if an Amazon employee draws a paycheck from a job the online giant’s Seattle headquarters instead of from the same job in Tacoma. phaley@thenewstribune.com

A reader writes in with an interesting query:

I’m trying to reconcile Tacoma as a “bedroom” community and the economic goal of being a net exporter of value (to use Jane Jacobs’ phrase).

If a Tacoma resident works in Seattle and brings her money home to buy groceries, does this grow the Tacoma economy the same as if the grocer exported products to Seattle?

If it is, then being “the best possible bedroom community” can be a viable economic development strategy. We don’t need to recruit or gestate the next Amazon; we just need our people to work there.

Hmm. To properly evaluate the reader’s question, we could build a complex economic model to track all the inputs, outputs and transactions costs, one that accurately weighs all the factors and captures their interactions and influences on each other through a series of algorithms.

Or we could just throw some ideas against the wall and see what sticks, do some thinking out loud and see if we can figure this out on our own.

Yeah, we’ll go with Plan B.

The reader’s question is timely and important, and not just because it gets to that enduring existential question about Tacoma: What is its economic reason for being? A whole lot of decisions about government, infrastructure and economic-development policies ride on the answer to that question.

The timeliness has to do with the opportunity that exists with Seattle finding itself unable to sustain the kind of growth it has enjoyed (endured?) while not pricing residents and workers out of the city.

One solution to that problem is to keep the jobs in Seattle but make everyone arriving late or unable to afford close-in living commute to them, even if that means doing so from Pierce County.

The other is to move the jobs, not the workers.

Whichever gets moved has a bearing on two distinct yet interconnected economic realms. One is the macro economy, which throws everyone together. The other is the micro — that woman who is either commuting to a job in Seattle or staying local.

At the micro level, the difference is huge.

The commuter who has a 20-minute commute vs. a 90-minute commute isn’t shelling out as much on gas, parking, insurance and wear and tear on the car, if she’s driving, or fares for transit. She’s got more time for herself, for family or, if she wants, for work. Stress levels are probably lower too, which might mean some health benefits over time.

That difference might not be noticed if you’re talking about one individual in the regional economy, but add up all those individuals and now you’re talking about real economic benefit.

The payroll taxes and other costs associated with our Tacoma commuter’s job stay in Seattle; move that job to Tacoma, even at a lower salary, multiply it by the number of people staying local, and now you’re talking real money.

That’s real money that’s leaking out of the Tacoma economy and into Seattle’s, or Bellevue’s or wherever else those jobs are.

If our hypothetical commuter works at a local company, the money she’s not spending on commuting has a better chance of staying and being spent in the local economy.

Does it matter if that local company’s sales are mostly local or are from “exports”? (Here we would tweak our reader’s premise to change the reference from grocer to employer.)

It certainly helps the local economy to have lots of firms bringing in revenue from elsewhere, but just keeping the money at home helps plug that leakage. Yes, our commuter is “importing” wages from Seattle to Tacoma, but at a cost; the margin might look a lot fatter if that paycheck was earned locally.

There are other benefits, tangible and intangible, to having those jobs stay here. Employers tend to have more philanthropic and civic involvement where they’re based, so there’s a community benefit. No doubt readers will let us know of factors, influences and costs we’ve missed.

So yes, it does make a difference if that that Tacoma resident has an Amazon job, or its equivalent, in Tacoma or Seattle. If Tacoma wants those jobs here, rather than being a really big bedroom community, it will take a concerted effort to recruit or grow them here.

That’s the hard part, but maybe it’s not as hard as it used to be.

Glenn Kelman, chief executive of Seattle-based real estate company Redfin, said in a recent CNBC interview that there’s been a migration from cities on the U.S. coasts to inland cities, driven in large measure by housing prices.

Employers are going too.

“Silicon Valley is going to leave Silicon Valley,” he said. Tech and financial companies are chasing talent, he said; that talent is chasing affordable housing.

Yes, we know, Tacoma is on the coast, but in comparative operating and living-cost terms, it’s the Midwest to Seattle as Silicon Valley North. It wouldn’t take a lot of relocations or new offices to make a difference locally, and to those participating in the long trudge up Interstate 5.

It’s a nice theory, anyway. In 2018, we’ll see if anyone, readers included, have good strategies for putting theory into practice.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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