HB 2050: Small Business Enhancement Program

Being a resident of Seattle’s International District puts me within the state’s 37th Legislative District. I traveled to Olympia to meet with Rep. Eric Pettigrew to discuss one of the bills he is sponsoring on support for small businesses. While reviewing the bill at the cafe across the street from my apartment, I came across a photo of the Rep. Pettigrew meeting with local small business owners in that very same cafe and he was even sitting in the exact seat I happened to occupy at that very moment. The coincidence was too wonderful to ignore, so I contacted his staff and set up a meeting.

Rep. Pettigrew meeting small business owners in Eastern Cafe, Seattle.

Rep. Pettigrew meeting small business owners in Eastern Cafe, Seattle.

HB 2050 creates a new Small Business Enhancement Program within the State Office of Minority and Women’s Business Enterprises (OMWBE). The primary goal is to give better support to small businesses so that they can expand and create jobs. The program would make a variety of business development services available to small business owners, including employee training, grant brokering, and coaching on the process of competing for state contracts.

A critical component of this bill is the process of certification for small businesses. The original version of the bill very clearly defined “small business” as “a minority, women, or socially and economically disadvantaged business enterprise that has two hundred fifty or fewer employees”. But this lanuage was replaced by “microbusinesses, minibusinesses, and small businesses” in the substitute bill. I wanted to know why this change was made and what possible benefits could come from moving away from being explicit about the bill’s target audience: businesses owned by women, minorities, and other disadvantaged populations.

Unfortunately, Rep. Pettigrew was unable to be present during our appointment. His assistant, Lanna Ripp, informed me that women and minority ownership is already included within Washington State’s official definition of small businesses and that adding the language about minibusinesses and microbusinesses to the list increased the specificity at the gross revenue cap. My concern was that the bill didn’t make explicit what methods it would use to increase enrollment in these certifications. I know from working in the International District that the number of certified minority- and women-owned businesses is disproportionately small considering the population that lives here (see Preservation Green Lab’s report “Older, Smaller, Better” p.50).

For a targeted economic development policy like this to succeed, it needs to have a game plan for engaging the diverse constellation of business owners that it targets. My worry is that the lumping of all these groups under the “small business” heading indicates a lack of awareness of the variety of challenges faced by these businesses owners. The bill should explicitly address how it plans to tackle challenges like language barriers, childcare needs, and compliance with the ramp up to $15 minimum wage.

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Funding Research with a Carbon Tax

It is no secret that, despite the fact that we’ve been aware of global warming for over 50 years now, we are steadily approaching a point of no return. This means that comprehensive and impactful changes must be made and they must me made quickly if disastrous consequences are to be avoided at the global scale. Harnessing the inherent efficiency of the market system is a good way to produce innovation in a quick manner, and so it makes sense to trigger a market response by putting a price on emissions and pollution.

But one piece of this puzzle that markets typically don’t provide adequate funding to is research. Unless a very clear relationship is established between R&D investment and increased profits, markets tend to avoid the risks associated with intensive scientific research. Even pharmaceutical companies, often regarded as leading backers of medical research, actually spend far more on advertising than on research.

Advancing the body of scientific knowledge about global warming and ways to reduce or reverse this process is a critical part of the solution. If a carbon tax is the way to better ammoratize this issue, then a substantial portion of those tax dollars should go to researching carbon neutral alternatives to transportation, manufacturing, building construction, and energy production. The rest of the tax revenue should be allocated to mitigating the negative impacts of higher taxes on the most finanically vulnerable populations.

For instance, money from a carbon tax could be earmarked for researching a portfolio of alternative energy sources (small, competitive pilot projects are preferable to “picking winners”) while the remainder is used to fund new park and rides to connect periurban populations to job centers. This one-two punch approach illustrates how a tax can simultaneously leverage the strengths of the market and government, providing much needed synergy of efforts to resolve climate change.

Give the People What They Want; TOTCHOS!

While standing on a very crowded lightrail train headed home (yes ridership is undeniably strong for the starter set length of track) I was happy to see that next to me was a seated post-work commuter cracking open a new issue of the The Stranger (a free weekly alternative editiorial publication seemingly without an corporate oversight or constraint, which is widely read by Seattlites).  It was so crowded on the train that was pressed against the vertical grab bar and essentially hanging over the shoulder of the ponytailed Amazon programming engineer (definitely a stereotyping assumption of employment) so that I could read every word on the pages of The Stranger.  I hadn’t read the issue yet and if I were to have held a paper it would have been in the faces of other passagers.  It was unspoken but I thought that my ponytailed friend knew that we would be reading together.  As the train left the University stop in the tunnel we started with the first pages of tattoo parlor, strip club and bar ads, then after a brief visual scan of the vice offerings we began flipping through the pages at a very regular pace.  Scan all of the pictures and article titles giving interesting pictures a second look then on to the next page.  “Wait that article about the meth pipe alternative to needle exchange would be worth reading at least a few paragraphs,or, oh, now we have to give the article about the changes to how Seattle will vote for city council members a stop and at least skim.” was franticly saying to the ponytail guy, in my head, as he flipped through the meat of the issue. Just as I was about to give up on this reading partnership, he found something worth taking the time to investigate further.  “The Mereoric Rise of Totchos; The Tater Tot-Nachos Hybrid Is Showing Up on Menus All Over Town-Here’s What You Need to Know” was the title over a very large picture of an off-white thick diner plate covered with a Mt. Rainier of golden tater tots, melted cheddar cheese, greasy bacon pieces, diced green onions and an ice cream scoop size summit of sour cream.  I’m not sure if it looks like something you should eat. “Wait are you folding the paper from two page scan to one page serious read?”, I mentally sarcastically exclaimed.  “That’s it, this is just not going to work”, I pouted, my final mental words, to Ponytail Guy. I decided to avert my eyes from his paper and reflect on my thoughts, right after finding out which fine establishments were serving Totchos, just in case I need to get some.

Ponytail Guy is a Pemco insurance ad type guy; just like us a little different, but for the time left on the train I decided to classify him as the average person.  He doesn’t want to spend his free time thinking or worrying about issues like voting or drug addicts along 3rd Ave. He just wants to find out more about Totcho history and where he can go for cheddar or queso options. He doesn’t feel like he can do anything about any issues and he’s not angry about anything.  Amazon pays pretty well and he can get Totchos anytime he wants at several nearby locations. He can watch anything he wants tonight on Netflix and tomorrow morning Starbucks will be waiting for him with a nice warm cup of He Don’t Give a @#$%. Why should he care about stuff that doesn’t have to concern him, work is boring and life is short. How can issues like Carbon Efficiency be metaphorically covered in melted cheese, bacon, green onions and sour cream?  Tater tots alone are boring and would not have gotten Ponytail Guy’s attention.  It is clearly all the “Fixins” that are giving the tater tots the spot light. “Fixins” add time and expense to the equation but they add exponential value to the tater tots.  The “Fixins” for Carbon Efficiency could be cool architecture, high speed trains, clean breathable air in the future and Teslas.  We could put all the “Fixins” on the Carbon Efficiency story and bring a Totchos type awareness to the people.  A Taco Bell strength marketing campaign will need to follow to make sure they know where to get it and what their options are.

Maybe Ponytail Guy was riding the lightrail with me because he got rid of his car. He could work for Greenpeace, is on his way home to a very well insulated urban infill micro-apartment, helps homeless drug addicts on the weekend and already decided to vote for Mike O’brien as well as two other non-incumbants.  In that case he deserves to just think about Totchos and Netflix for an evening.  In fact I feel like I now owe him a plate of Totchos.

Ya Know?

Lately I’ve been thinking about all the things that I don’t know—in a positive light. Classes like the one have demonstrated certain areas of thought that I avoid completely—to no service to myself or anyone else.

So what are the words I typically avoid? Planning. Policy. Law. Real Estate. Financing. Taxes… and conversation about taxation. Corporation. Business. Development. Sorry for honesty everyone.

This said, I think these are the words and ideas that I have been most fascinated by since my return to school. Why? Because in my encounters with intelligent people that do know a lot about these things and share similar social and environmental concerns, I’m convinced they know something I need to know to accomplish more.

There are also those “things I don’t know” that I actually think I know but have never really tried to explain. I’m surely not alone on this one–the following article from the HBR explains this phenomenon:

“Find an object you use daily (a zipper, a toilet, a stereo speaker) and try to describe the particulars of how it works. You’re likely to discover unexpected gaps in your knowledge. In psychology, we call this cognitive barrier the illusion of explanatory depth. It means you think you fully understand something that you actually don’t.” – Do You Know What You Don’t Know? Art Markman, Harvard Business Review https://hbr.org/2012/05/discover-what-you-need-to-know/

Grad school and interdisciplinary classes such as this one are also good at challenging this common pitfall. I know more now about what I don’t know than I ever knew!(?) Thank you AP and everyone else for a great quarter.

Townhall: for the youngfolks too!

I attended my very first townhall meeting last Saturday, and event at Seattle Community College with the 43rd Legislative District Senator Jamie Pedersen, House Speaker Frank Chopp, Representative Brady Walkinshaw. It was an exhilarating. Instead of having the opportunity to speak with just one state official, I could have had the opportunity to speak to 3 of them at once!

Attending this meeting felt like a stepping stone to a more assertive, policy-saavy Stevie Koepp. I don’t consider myself a very political person, but have had a sense since entering my graduate studies that there is a lot of value in listening and being heard when it counts.

The townhall format really appealed to me. There many opportunities to listen and learn about legislation—through handouts describing the budget, individual bills, and the politician’s responses to other people’s questions. Upon entering the building, I was informed that each town hall handles questions a little differently—the format of this meeting required people to submit questions on a 3×5 notecard. These notecards were read by an administrative assistant.

Over the 1.5 hours that the meeting lasted, the group made our way through several topics, ranging from water pollution to sick and safe leave. It was interesting to see how the crowd reacted to various statements, dependent on their agreement or disagreement. Seems that the townhall meeting would be a very effective tool for getting large amounts of feedback from a very diverse group of people all at once.

Sadly, my question was not brought up as one of the topics for response. I did manage to speak directly with Jamie Pedersen’s administrative assistant and supplied my contact information along with inquiry to be passed on to the Senator.

My inquiry is in response to the Transportation 2015-17 Budget/ HB 1299—I am concerned about the amount of funding going into highway widening projects compared to that funding mass transit services.

http://www.ofm.wa.gov/budget15/highlights/201517_highlights_transportation.pdf

Verbiage describing “clogged” sections of highway justifies “solutions” to transit slugishness by funding additional lanes for personal vehicles. Despite evidence that widening a highway does not relieve traffic, the rational for funding these projects remains flawed and consistent.

I’m already looking forward to attending my next townhall meeting.

Putting Delight in its Place

Making our experiences more “delightful” is a worthy pursuit, but we shouldn’t confuse it with the deeper goal of improved functionality. In the booming industry of personal technology, “delightful design” has recently taken hold as an imperative for new software products. The story goes that apps should instill a sense of wonder in their users, interjecting unexpected bit of joy into their lives. But as this NY Magazine article sums it up, “…delight’s days may be numbered.”

Policy Design Pyramid

The tech world has moved from “delight” to “frictionlessness” in its quest for a one-word design mantra. Both have their merits, and in the right circumstances a design can achieve both. But the underlying assumption required for either delight or frictionlessness to be of value is that the product functions well. The adage that form follows function is all the more important when considering the design of policy to address challenging subjects like carbon emission reduction.

How can this lesson from the tech industry be translated to the drive for a more sustainable development paradigm? Perhaps it is useful to consider functionality, frictionlessness, and delight through the framework of Maslow’s hierarchy of needs. In order to be viable a policy must first be functional; it must fulfill the objective that it was designed for. This is the major hurdle to clear, and only after it have been achieved should policy designers consider the other two qualities in the pyramid. Frictionlessness is perhaps too lofty a goal for policy design, as there is always some aspect of a new policy that clashes with existing circumstances. But it is useful to think of designing a policy that is closer to frictionless than frictional. Lastly, delight can be interjected into the design not merely as an aesthetic after-thought but as an important humanizing quality that could potentially be pivotal in the success of the design.

Japan’s Carbon Tax

The concept of a tax on carbon is curious in its facility for rallying “environmentalists” on both sides of the equation.

Tomorrow morning I depart for a spring break travel study program in Japan, a country that has employed a national carbon tax for over two years, since October 2012. A scan of late-2012 news articles on the topic quickly presents a picture of a dissatisfied general public and business sector.

A Bloomberg article published days before the tax was implemented quotes the Japan Chamber of Commerce and Industry, which stated its concern regarding “the carbon tax’s impact on small and mid-sized businesses.”

This quandary brings to mind the 2007 OECD article in the course packet that discusses “the political economy of environmentally related taxes.” The so-named article identifies the general public’s perception of the “fairness” of an environmentally related tax as a signal of the tax’s acceptance. Apparently a sum of Japan’s business sector found (and perhaps still finds) its carbon tax to be unfair.

General consideration of fairness, of course, is one of the factors that can “override rational economic motivation” (22) that Akerlof and Shiller identify in their Animal Spirits.

The OECD article recommends a “gradual phasing-in of taxes” (5) to reduce the initial blow to companies most obstructed by the tax. Apparently Japan has done just that. The Bloomberg article explains that the Japan carbon tax will be elevated in phases, culminating in April 2016. To complicate things, in the wake of the Fukushima disaster, Japan was more dependent on fossil fuels in the absence of nuclear power.

The money precipitated by the tax will apparently be spent on efforts to mitigate global warming such as projects promoting clean energy. Perhaps if the Japanese government were to initially confer a portion of the tax revenues back to those sectors most affected by the tax, it would be better received as a “fairer” tax. As the OECD article points out, this action would indeed reduce the environmental success of the tax while perhaps surmounting the biased reputation associated with it.

Of course, the carbon tax in Japan would have a magnified impact if other countries were to implement similar taxes on carbon. An united effort is essential for a substantial impact on carbon emissions. Do we need a global carbon tax? That would certainly be fair.