Written by PEL Lab Leader Deric Gruen
What is the true engine of our economy? In Washington State, we are told that large corporations are the key to our livelihoods and tax base. We’re also told Washington State is one of the most trade-dependent states in the nation. The message is that real wealth is something that comes from elsewhere, something that trickles down or that we import from the outside. The good news is we’re not as dependent on wealth from elsewhere as some might like us to think.
Amazon, Boeing, and Microsoft employ more than 200,000 people, and you can pick up an apple grown in Washington in Indonesia, Mexico and beyond. These industries generate real jobs and revenue, but they are still a fraction of the approximately 3.7 million jobs in our state. Economic impact analysis often uses ‘multipliers’ and ‘input/output models’ that make big industries’ impact look even bigger through making various assumptions about indirect effects of how dollars spread. But big transnational corporations are still a small part of the economy most of us interact with on a daily basis when we go to work, buy or cook our food, and secure a home to sleep at night.
For example, I recently returned from five months out of the country and found some of my spending habits had been broken because I was simply looking more closely at what’s around me. When a headlight went out on my car, I discovered Honest Jack’s, a charming old Seattle jack-of-all-parts store, was just down the street. I started making my way to Safeway for produce the other day, but ended up stopping at Ba Mien Seafood Market instead and found an impressive fresh food section. I’m lucky to have local pharmacies, grocers, and retailers in my neighborhood of Brighton in Seattle. Not everybody does. And it’s true these small businesses may still rely on a global supply chain. But the fact is, 99.5% of Washington businesses are small businesses, and about half of Washington workers are employed at a small business, most with 20 or fewer employees. These companies are building things, providing health care, making goods and more.
When we think about what makes the economy move, we might think of businesses. But it’s not just producers that drive our economy. In fact, it’s not even a majority. The bulk of our economy is actually driven by our own consumption. In Washington State, we spent almost half a billion dollars in 2023 on personal spending. That’s nearly 60% of our gross domestic product. Now that is power. It turns out it’s not a few big engines. It’s all of our little engines, moving together, that really power our economy.
An import-oriented or trickle-down wealth narrative can be used by those with a direct interest in large corporations and industry as a cudgel to beat back attempts at a solidarity economy. Industries like big agriculture, big aerospace, and the big tech companies have tremendous influence in our politics, land-use, and capital allocation. They caution us not to tax or regulate them for fear they’ll move away. The wealth-is-from-elsewhere narrative can also be used to minimize a focus on smaller employers and entrepreneurs and the significance of our local purchasing power in determining our livelihoods.
People’s Economy Lab works on strategies like Collaborative Governance to maximize people power in economic decisions. We advance strategies like Community Wealth Building for direct community ownership and control of their productive assets, from small businesses, to real estate, to large institutional spending. There’s a lot we can do to maximize our local assets and build an economy of local interdependence to get ahead of economic crises, whether they’re caused by climate disasters or disaster politics.
A healthy economy, at its most basic level, is about understanding what people really need and how we produce it. The tighter that relationship the stronger we are. We need to reorient our thinking about the economy; instead of trying to appease corporations who seek to inflate their importance, it’s time we realize we are at the center of the economy. The economy is us.
