Retailers in Washington compete for limited consumer dollars

By Jan Teague, President/CEO

Retailers lose market share to online retailers because there is no sales tax on the item, but there is more to the story.  We all know that we have been trying for a decade to get Congress to come up with a national solution.  But have you considered that the state's policies on labor costs also play a role when it comes to these online retailers competing in our state? 

Out-of-state online retailers don't pay the highest minimum wage in the nation, like our retailers do.  They don't pay the highest worker compensation benefits, like our retailers do.  They don't pay the highest unemployment insurance taxes like our retailers do.  The list is a lot longer including expensive sick leave laws.  And, because our prevailing wage laws that construct our public facilities are high, so are our business taxes to cover these costs.

When the Washington Research Council (WRC) writes a report that details all of these costs, I am struck by how disadvantaged our state brick and mortar retailers are with the out-of-state  retailers who sell online.  We are a consumer-based economy that is rapidly becoming mail order.  I can see why our state consumers are buying online.  It's so much cheaper.  The WRC talks about the competitive disadvantage that these employment costs create.  There are far-reaching implications for retailers.

By next Wednesday, we will know who our newly-elected leaders will be.  Let's hope our state leaders decide to have a robust evaluation of labor costs and look to reforms that can help us be more competitive on the price of goods sold by Washington businesses to Washington consumers.