With its dependence on the lumber and aerospace industries, the state of Washington has always been unusually vulnerable to high interest rates. Its unemployment rate, in turn, is almost always two points higher than the national average. But about two years ago, when the statewide jobless rate hit 13.5%, the legislature panicked. In an unprecedented step, it opened its 1983 session by calling an economic summit conference of local industry executives and experts from around the country. "Times were tough in Washington," says David Bell, executive director of strategic planning and program development in the state's Department of Commerce and Economic Development. "We felt we had to do something quickly and dramatically."

What they did was form the Emergency Commission on Economic Development and Job Creation. The name, however, was by far the most dramatic thing about it.

Rather than invent new solutions to Washington's economic problems, the commission decided that -- in the short run at least -- it needed to be pragmatic and shoot for goals that seemed within reach.

There are a lot of things the state can't do," says state representative Joseph King, a Democrat who heads the House Commerce and Economic Development Committee. "We are trying to concentrate on the areas in which government involvement can really make a difference."

After six months, the commission -- made up of businesspeople, legislators, and labor leaders -- came up with 30-odd recommendations. Among them were a customized job-training program for private employers; an umbrella revenue bond, which makes it easier for small companies to obtain tax-exempt financing; and a local development assistance fund to encourage communities to involve labor, business, and government in developing local economic strategies.

None of these programs is particularly new or startling, and many have long been in place in other states. Indeed, in its own report, the commission commented that Washington was more a follower than a leader. "We found that businesses don't want fancy tools," King says, "just solid government support."

In the commission's view, "solid" means getting the private sector committed before public money is spent. The state's new job-training program, for instance, will provide assistance only after a company has specified the number of employees (and types of skills) it needs and has agreed to pay half the costs. Similarly, a program to lend money to communities for infrastructure improvements will not provide funds until a company has formally committed itself to moving to the new site once the improvements are made.

Looking beyond these recommendations, the commissioners hope to launch a more comprehensive study of the state and its economic opportunities. The purpose of this so-called strategic analysis would be to identify better ways for Washington to diversify its economy away from forest products and aerospace.

When the analysis begins, Washington officials hope to draw lessons from the experience of Rhode Island, where voters recently turned down a series of ambitious proposals (see "A Shattered Greenhouse," page 128). Rhode Island's study "represents the most sophisticated piece of economic analysis ever done by a state," says one Washington state policy analyst. But in order to ensure acceptance, Washington is taking particular pains to involve diverse interest groups early.

No one sees the results of this commission -- or any commission -- as more than a preliminary step toward building a stronger economy. In fact, some people wonder whether the inherent weaknesses of Washington's industrial base can really be overcome at all. Lately, notes Marty Brown, executive director of the emergency commission, things appear considerably brighter than they were in early 1983. Unemployment last July, for example, was down to 9.5% -- higher than the national average, to be sure, but four points lower than it was 18 months before. Still, Brown admits, "We're limited as to what we can control . . . . And if interest rates go up again, there's no question that we'll be hard hit."

Published on: Oct 1, 1984