Metro Seattle is among top cities for “creative economy”

Metropolitan Seattle ranks No. 4 in a new study of “creative economies” conducted by three economists at Arizona State University. As the Business Climate blog reports, 

Knowledge workers are increasingly becoming a vital source of innovation and growth for companies, but the study found few metros that have cornered the market on this or succeeded at building a creative economy with mostly knowledge-based occupations alone.

Richard Florida, who has written extensively about the innovation economy and the “creative class,” points out key findings from the study.

The small group of creative metros, as they put it, “follow a general trajectory towards a creative economy that requires them to increasingly specialize, not only in creative occupations, but also in non-creative ones—presumably because certain non-creative occupations complement the tasks performed by related creative occupations.”

In other words, the places with the most creative economies also have the highest overall diversity of occupations and specialties—by a wide margin.

Florida reproduces the following table from the report.

Creative economy table

Metro Seattle is among a handful of cities that have succeeded in nurturing a diversified, sustainable creative economy. Florida summarizes the challenge.

It is extremely difficult for other cities and metros to break into the small club of creative leaders. First, they need to excel across the board; their talent pool must be deep with all the skills, creative and otherwise, required for economic growth. Second, leading creative-economy metros must be able to overcome the tremendous forces pulling them away from the creative economy…

“To overcome this pull, and to stay closer to the creative economy,” the researchers write, “a city must continuously attract a net influx of workers with creative skills.” Unfortunately, this outcome is achieved  by a small number of places across the nation.

It’s good to be among the nation’s leaders. The research also serves as a reminder of the importance of strengthening the state’s education system to expand creative opportunity for all Washingtonians.

Washington dinged in new report on high school grad rates; urban innovations praised

Washington gets mixed reviews in the 2015 Building a Grad Nation report. The state still shows up as a performance laggard. But the innovative Road Map Project in Seattle and South King County is singled out as a success story.

This map from the report shows how the states are doing. To see state-by-state numbers go to the interactive map in the this report overview. ACGR stands for Adjusted Cohort Graduation Rate, a measure that tracks students who enter high school together, adjusting for transfers.

ACGR map

Overall, the analysis shows the nation is making uneven progress. The Associated Press reports,

The record high American graduation rate masks large gaps among low income students and those with disabilities compared to their peers.

There are also wide disparities among states in how well they are tackling the issue.

Washington is on the wrong side of the disparities.

Graduation rates among the states vary, ranging from 90 percent in Iowa to 69 percent in Oregon.

Gains have been fueled, in part, by large growth in some of the nation’s largest states, including California, Florida, Georgia, and North Carolina. But 15 percent of the nation’s high school students attend school in New York, Illinois, Washington and Arizona, where rates are declining or stagnating.

About Washington, the report says there’s reason to be concerned.

Worrisome for the nation is the [recent] performance of New York, Illinois, Washington, and Arizona, which, combined, educate about 15 percent of the nation’s high school students … Washington State experienced no improvement [from 2011-2013].

There’s a wealth of detail in the report, which examines progress toward a 90 percent graduation rate for all students by 2020. The researchers examine quarterly performance, each quarter being a 5-year period from 2001 to 2020. We’re currently in the third quarter, 2011-2015, with data available for 2011-2013.

While overall the report finds that the nation is on track toward meeting the 90 percent goal,

As the third quarter comes to a close and the fourth and final quarter begins, the nation will need to double down on its efforts to increase graduation rate outcomes for low-income, minority, and special education students, and continue driving progress in big states and large school districts, where the majority of the country’s student population resides.

The good news for Washington, the research finds, is in urban innovation. Citing a California leader’s comment that “graduation is a solvable problem,” GradNation identifies the Road Map Project as one of the solutions.

…in Washington State, the Road Map Project, serving south King County and the southern, high-poverty area of Seattle Public Schools, set a goal is to double the number of students on track to graduate ready for success in college and career by 2020…

Setting a new national model for improvement, the RMP collaboration is led by the Community Center for Education Results (CCER) with the Puget Sound Educational Service District (PSESD)…

It’s working.

…true to original college readiness goals, by the Class of 2013, 58 percent of RMP 11th and 12th grade students had taken one or more advanced courses (AP, IB or Cambridge Curriculum), and African American students increased their AP participation by 9 percentage points. 

Tacoma, too, is singled out for its successful innovations.

Eight years ago, all of Tacoma’s comprehensive high schools were named to the dropout factory list developed at Johns Hopkins University’s Center for Social Organization of Schools. Today, the graduation rate is 78 percent.

Three years ago, the Washington State superintendent named Tacoma the first district Innovation Zone. Schools adopted different improvement practices, and there is now open enrollment throughout the county. There has been a keen emphasis on motivating and supporting students in going to college.

In our research report, we identify increasing high school graduation rates as a top priority. We noted,

In 2012, Washington ranked 32nd among the states for high school graduation rate, with a rate of 77 percent. Washington’s four-year high school graduation rate in 2013 (for students who began ninth grade in 2009-10) was 76.0 percent.

The Washington State Board of Education has established a goal of increasing that number to 89 percent by the end of this decade. The state must meet or exceed this objective to become one of the top 10 states for high school graduation.

Although Washington continues to lag, the state’s urban districts are making progress. The progress must continue to expand opportunity for all students in our state.


School levies emerge as critical issue in what-might-not-be-final days of 2015 Legislature

With the state Supreme Court’s McCleary emphasis on the uneven role of local levies in school funding, legislative attention to the state-local funding mix was inevitable. We noted earlier that competing proposal have emerged in the last weeks of the regular legislative session. 

There are several good news stories on the local levy issue. The Seattle Times editorial board frames the matter.

As the Supreme Court noted, the state has ceded its responsibility to local school districts that raise money from their local taxpayers. The state contributes only around 70 percent of total funding, with the rest coming from federal and local sources. The quality and resources at public schools varies widely because some district voters approve higher levies, creating a haves and have-nots system — the antithesis of what the state’s founders had in mind.

The Times editorial goes on to discuss several of the legislative proposals.

For a good discussion of the competing plans, see this new Washington Research Council policy brief on the levy swap. It’s a key element in most strategies for reducing local levy reliance and boosting state support of basic education. As the WRC notes, current discussions of the swap come with a twist.

There has been a convergence of two policy elements being proposed in Olympia this session. The capital gains tax first floated by Governor Jay Inslee has new life as Senate Democrats connect the proposal’s additional revenue potential with the second element that will need new state revenue: the reduction of local levies currently funding education…

Local property tax levies cannot be used to meet the state’s constitutional obligation to fully fund basic education. The levy swap, substituting state property taxes for local school district maintenance and operation (M&O) levies to fund basic education, is seen by some to be the natural remedy for this portion of the McCleary problem.

The Association of Washington Business has two short newsletter items worth your attention, setting out AWB’s position on local levies and the capital gains tax.  

While the levy discussions seem to be heating up in the Legislature, Austin Jenkins reports that the governor is not on board yet.

In recent days several levy reform proposals have been floated in Olympia. But so far Governor Jay Inslee isn’t embracing any of them.

“It’s kind of a second step,” Inslee said. “We are focusing on the budget right now to take the first step which is actually to have financing for the McCleary decision, that second step I don’t think is necessary to accomplishing the first step. I’m focused on that first step.”

The News Tribune, like the Seattle Times, believes it’s critical to address the levy problem

What has to be done is obvious: Local levies should be lowered sharply and their use strictly limited to genuinely supplemental expenses. The Legislature should assume all responsibility for teacher compensation – and should pay them well. The profession should not come out behind in the bargain.

Lawmakers could pay for this by collecting what districts wouldn’t be collecting once local levies were lowered. Or they could find a different source of revenue.

The Spokesman-Review has a good rundown on the politics complicating levy reform.  And Rep. Ross Hunter, one of the originators of the levy swap concept, has an extended blog post examining the options, their prospects and how they also fit into the budget debate. It’s long and wonky, but provides important insight into the challenges of structuring a politically viable plan. The key takeaway: it’s complicated, involves myriad tradeoffs among affected groups, and any resolution this session will likely be partial and transitional.
A lot going on. The session appears headed for extra innings.

Retooling education for high tech manufacturing, expanding employment opportunities

High tech manufacturing is transforming the economic landscape. Bruce Katz at The Brookings Institution suggests Detroit is becoming the new Silicon Valley (and vice versa). For our state, which likens itself much more to the innovative tech cluster of the valley than to Rust Belt Motor City, the transformation is important. 

In his blog post, Katz briefly outlines how software has revolutionized manufacturing and other industries, creating new opportunities and bringing jobs back to the U.S. Further, the new jobs have powerful multipliers.

…it helps to look at a recent Brookings report, which lists a group of 50 advanced industries, ranging from automobile manufacturing to software development. Together, they contain our nation’s most competitive and innovative firms. Nationally, these industries have an outsized impact on the economy—just 9% of the workforce, they produce 17% of gross domestic product and, since the end of the recession, advanced industries have created 65% of new jobs.

The trends are good news, particularly for a state that is already home to some of the world’s most innovative tech companies. Katz concludes,

At a time of increasing economic inequality, the higher productivity offered by advanced manufacturing often leads to higher wages for workers. (The Brookings report found that workers in advanced industries earned nearly double that of the average worker in other industries.) The innovation and increased productivity of advanced industries also hold the promise of cheaper and more widely available goods and services for the country as a whole, increasing standards of living across the board.

Private, public and civic leaders would be wise to embrace the convergence underway and retool economic development—workforce training, community college programs, applied research investments—to this new reality.

Opportunity Washington: Priorities for Shared Prosperity makes a similar point, noting the potential economic and social benefits that could be realized by closing the skills gap. Citing research conducted by the Boston Consulting Group for the Washington Roundtable, we wrote:

The BCG analysis projects the existing skills gap to reach 50,000 persistently unfilled jobs by 2017. Using conservative multipliers, the consultants calculate that filling those jobs would generate a total of 160,000 jobs in the state and an additional $720 million in state taxes and $80 million in local taxes annually.

Ultimately, education systems must align with the skills needed for individual success in Washington’s economy and the global marketplace. To create this alignment, Washington will need to dedicate resources to improving access and increasing the number of degrees awarded — particularly at the bachelor’s degree level and especially within high-demand career fields.

Washington stands to benefit greatly from this 21st Century economic transformation. To do so, policymakers must assure that investments, accountability, and reforms align to produce optimal education outcomes.



Preparing students for tech and “middle skill” jobs

The Brookings Institution offers new insight into the often-overlooked opportunities available in “middle skill” careers. (Blog post here; brief here.) There’s been much concern expressed regarding the shrinking middle class. What’s welcome about the Brookings report is the specificity of forward-looking policy prescriptions. 

Three sets of policies should help address these problems:

  1. Providing more resources to community (and lower-tier 4-year) colleges but also creating incentives and accountability by basing state subsidies on student completion rates and earnings of graduates;
  2. Expanding high-quality career and technical education plus work-based learning models like apprenticeship; and
  3. Assisting and incentivizing employers to create more good jobs. 

As we’ve noted, 70 percent of Washington jobs in 2020 will require postsecondary education and training. Many of them will be the middle skill jobs that expand economic opportunity and security for the majority of Washington households. Brookings has it right.

So, too, does former Boeing Commercial Airplanes CEO Scott Carson, who advocates for more STEM education, particularly for young women.

Targeted investment in education that produces positive outcomes must continue to be the state’s priority. It’s both likely and proper that lawmakers, then, will set aside funding for Initiative 1351 until voters approve a way to pay for it.

The Everett Herald today editorializes in favor of sending the measure back to the voters. The Senate approved a referral Monday; House Democrats see problems with that approach (though they agree full funding is not likely).  

An Elway Poll finds that voters still like the idea of smaller class sizes at every grade level, the 1351 mandate, even if higher taxes are required. But because the poll did not specify which taxes or how much money would be necessary, lawmakers are justified in believing voters would show buyer’s remorse should they have a second chance to consider the measure. 

Pollster H. Stuart Elway noted that the lead for I-1351 evaporated last year as opponents hammered on the cost.

“This smaller lead might be vulnerable once real dollars are attached,” he said.

More important than worrying about how to pay for I-1351 is the real priority: Aligning incentives, accountability and funding to assure that every Washington student has the opportunity for career and college success.


Here’s one education equity measure on which Washington does well

Washington comes out pretty well in The Education Trust’s new report, The Funding Gap: Too Many States Still Spend Least on Education Students Who Need the Most.

Two charts from the report are particularly informative. 

The first looks at the funding gap, the difference in funding between the wealthiest and the poorest schools.  Here’s how The Education Trust calculates the gap:

To calculate gaps between the highest and lowest poverty districts, we:

• Sorted all districts by the percentage of students below the poverty line;

• Divided districts into four groups (quartiles) so that each group had approximately the same number of students;

• Calculated the average state and local revenue per student across all the districts in each quartile; and

• Compared the state and local revenues per student in the highest and lowest poverty quartiles.

Washington ranks in the middle, among the states with a rough equity (small gap).

Funding Gap 1


The other chart worth noting addresses an issue central to the current legislative session: the degree to which Washington funds K-12 education from the state budget. The chart ranks Washington fifth highest in share of state funding, with the state providing 65 percent of the state-local funding). That’s behind only Arkansas, New Mexico, Idaho and Minnesota. (Hawaii, which would otherwise top the list, is not included in the Trust’s analysis.)

State funding

The report is here. The Washington page here. They compiled a lot of interesting data for those wanting to take a different look at demographics and school funding. 

There’s more good news about education, directly relating to providing funds to help low-income students. The Spokesman-Review added its editorial voice to calls to reclaim No Child Left Behind funds. And advocates of doing just that by incorporating student test scores in teacher and principal evaluations turned in 20,000 signatures in support of SB 5748

New evidence that annual assessments and accountability improve student learning

The U.S. Chamber reports that academic achievement for disadvantaged students has improved under the No Child Left Behind reforms.  The chamber points specifically to requirements for annual assessments, public reporting of data, and accountability. The following chart tells the story.

1 Graduation chart


Meanwhile, Washington Education Association members are rallying to push for higher pay and full funding of the four-year, $4.7 billion unfunded mandate imposed by Initiative 1351, narrowly adopted last fall. Among their concerns…

[WEA president Kim] Mead said the teacher-evaluation bill, which has passed the state Senate but not the House, is a distraction from the work lawmakers should be doing to comply with McCleary [the state Supreme Court full-funding of basic education opinion].

The teacher evaluation bill has the strong bipartisan support of education reform groups and major editorial boards in the state. It’s not a distraction.
Improving education outcomes is a major Opportunity Washington priority. The teacher evaluation legislation is an important element of the reform agenda, as the national data cited by the U.S. Chamber of Commerce demonstrate.



Inequality ≠ Poverty … and it makes a difference for policy

Economist Peter Gordon offers a clarifying message that sometimes gets overlooked in political discussions. 

Concerns over poverty are surely justified. But poverty and inequality are not the same thing — and they are purposefully muddled by those with an agenda.

It matters. We focus on expanding the culture of opportunity, increasing the likelihood that poverty will be reduced as people gain the skills and education they need to get ahead. 

Gordon points out one of the hazards of focusing on inequality.

The poverty=inequality misconception is fed by the suspicion that wealth is most likely ill-gotten and/or we live in a zero-sum world. If most people (most voters?) believe either one or the other these we have a problem. 

We doubt that most people fall into that trap. But the reminder is worthwhile.

His brief post provides a link to another Tyler Cowan (another economist) post indicating that America has been much more successful in reducing poverty than the official statistics report