WITH UNEMPLOYMENT of young people at 30 percent, there is much lamenting the absence of industry and blue-collar jobs in this city of white-collar office workers. The District's leaders are always pleased at the prospect of factories and plants that would help to expand the tax base, shrink budget deficits and make a dent in the unemployment rate. But the sort of industry that would provide jobs and tax dollars actually seems to be leaving the District rather than coming into it. To find out why, the District commissioned Brimmer & Co., an economic consulting firm, to study industries still in the city, such as construction firms, printing firms and manufacturing businesses. The study found that nearly half of them are "contemplating moving all or part of their business out of the city," meaning the loss of as many as 2,300 jobs.
Why are these businesses so anxious to leave? The answers from businessmen, in the order of the frequency with which they were given, are: the cost of doing business in the city is too high; the labor pool available is of poor quality; there is not enough parking or loading space; and they believe the District government has an anti-business attitude.
But the main reason is the cost of doing business. Cost means the high workman's compensation rates, the high price of unemployment compensation and the price of land. While law firms, trade associations and retail outlets may value a Washington address despite these higher costs, industry is just as happy to reach the expanding Washington consumer market from the suburbs.
Retaining the industry already in the city will have to be the first step in any plan to establish a solid base for growth. This will probably require a second look at workman's compensation and unemployment compensation; they may be lavishly protecting some workers at the expense of even more workers as companies leave--not a very good trade-off.
In all, half of the executives surveyed said the District government itself was a "problem." Of those who went to the local government seeking help to keep their businesses going, 73 percent said they considered the response "inadequate." Lawrence Shumake III, director of the Office of Business Development, says the city is responding to this strain between local government and industry by making more contacts with new firms as well as asking Congress for the authority to issue industrial revenue bonds. Offering businesses targeted tax incentives, such as deductions against the corporate franchise tax, to offset the cost of workman's compensation, is another proposal under study.
Mr. Schumake's prescriptions look good. But here is one more idea: why not assign city representatives to work with different types of industry on the problems they face in the District? The city has reached such a low point in its relations with industrial employers, the Brimmer report makes clear, that it is going to have to undertake an extraordinary effort to hold those who remain--let alone recruit more.