Boeing/Machinists deal is a big deal for Washington’s credit rating

The good news just keeps pouring in! Over the past few weeks we’ve learned that:

• Small businesses are getting help to export their goods and services.
• Businesses will have reduced costs in 2012 thanks to state reforms.
• Boeing’s 737 MAX will be built in Renton.
• Consumer Reports gave kudos to five Washington businesses.
• Our Ag industry is doing better than expected.

All of these are evidence that our economy—while still struggling, is recovering slowly but surely.

After hearing back in August that Standard & Poor’s had downgraded our nation’s credit rating, we are proud to hear that our state’s credit rating is in good shape, according to Nicole Johnson, Moody's Investor Service Senior Vice President.

Photo:  Machinists News Blog

In her report dated December 12, Johnson stated that the deal between Boeing Company and the International Association of Machinists (IAM) union, which secures thousands of jobs and provides union members a bonus that could boost sales tax collections, is credit positive for Washington state.

Moody’s rating for Washington is Aa1, which is defined here as “Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category.”

The newly ratified contract will enhance economic stability throughout the entire state. Johnson’s report highlights that the manufacturing sector in Washington accounts for 9.3% of all private sector jobs, and that, of those, the ones that include Boeing machinists are a substantially bigger part of the state’s economy: the durable goods manufacturing component that includes aerospace is 71.4% of all Washington manufacturing jobs compared to 61.3% nationwide.

Also worth noting is that Washington has regained the 5,000 Boeing aerospace jobs that were lost during the recession and the sector is expected to grow as the company increases production (to fill these orders and  these, and these) over the next several years.

The Bureau of Labor Statistics reports that Aerospace jobs are well-paying, with an average hourly wage of $37.57 compared to $23.32 for all manufacturing workers. In Washington, Johnson states in her comment, spending from those high wages have a multiplier effect that contributes to the overall strength of our state’s economy.

To read this story in Spanish, click here.