Washington, D.C., is a company town and the business is government. But the budget crisis of 2013 and the subsequent sequestration taught city government a valuable lesson: Private sector jobs also are important.
“We wanted to make sure despite whatever happens with the federal government, we continue to thrive,” said Chanda Washington, spokeswoman for the Office of the Deputy Mayor for Planning and Economic Development.
To that end, Mayor Muriel E. Bowser announced a five-year economic development plan earlier this year, aimed at growing the city’s private sector economy to $100 billion, an increase of 20 percent, and reducing unemployment in every ward to less than 10 percent across racial demographics.
So far, District employers appear to share her optimism.
ManpowerGroup’s Employment Outlook Survey for the fourth quarter, released this week, had 71 percent of metro-area employers saying they planned to maintain current staffing levels, 22 percent planning to add staff and 6 percent planning layoffs. Those statistics are nearly identical to the national figures where 71 percent of employers said they would maintain staff, 21 percent said they were planning increases and 6 percent said they were contemplating layoffs.
In the third quarter, by comparison, 18 percent of District-area employers told Manpower they planned to increase staff, 4 percent planned layoffs and 76 percent planned to stand pat. In the fourth quarter of last year, 18 percent of District-area employers said they planned to increase staff, 1 percent planned layoffs and 79 percent planned no changes.
The District of Columbia’s unemployment rate in July was 6.4 percent in a civilian labor force that has grown by nearly 8,000 since January to more than 403,000. The unemployment rate is much higher than the surrounding metropolitan area, which had a 3.9 percent rate. Nationally, unemployment was 4.3 percent.
The city now is looking to nongovernment sectors for job creation: Tech, hospitality and tourism are the biggies, Washington said.
In July, there were 14,600 mining and construction jobs in the District, 1,200 in manufacturing, 32,600 in trade, transportation and utilities, 16,600 in information, 29,800 in financial activities, 170,000 in professional and business services, 138,800 in education and health services, 82,800 in leisure and hospitality, 72,000 in other services and 238,700 in government, according to the Bureau of Labor Statistics. The highest growth was in leisure and hospitality, up 11.1 percent from last year. Education and health services was a distant second, with a growth rate of just 4.4 percent.
“Washington is the top destination for family vacations. We make sure that industry [tourism] is strong,” Washington said. “We have a good mix of events here for visitors to participate in. … Soon there will be a direct flight from India on Air India. That will bring visitors into the D.C. area to shop and explore and that helps to create jobs as well.”
Proximity to lawmakers and government contracts, meanwhile, is a significant draw for businesses.
Fiscal Note CEO Tim Hwang said his company, which started in 2013, decided to move from offices in Sunnyvale, Calif., to the District last year following a couple of years in Bethesda, Md., “to be closer to our early clients.”
“Our initial move was driven less by incentives and more with a desire to service the business of Washington: government and K Street,” he said, adding that the mayor’s office was instrumental in helping the company think through options before committing to a 10-year lease.
Fiscal Note, which helps organizations manage their relationships with government entities, also has offices in New York and Seoul, and Hwang said he expects to double his current staff of 150 to 160 within the next two years.
Even more tech jobs are on the way after Yelp’s August announcement that it would open an office in Washington, bringing 500 jobs. Yelp cited the city’s “amazing local restaurants and hot new businesses found on every street corner” as a major draw.
Now D.C. is among countless cities nationwide throwing its hat into the ring for Amazon, which has issued a request for proposals for a planned second headquarters that would bring as many as 50,000 jobs.
“D.C. is open for business and we believe we check the boxes for Amazon’s request for a second headquarters with our highly educated workforce, expanding business community and thriving tech sector. We are evaluating the RFP [request for proposal] to determine next steps,” Washington said.
When it comes to a business friendly environment, the District offers a number of incentives to entice businesses to locate or expand operations in the nation’s capital, including grants, rebates for energy efficiency and low impact development, and discounts on water and sewer fees.
As for its tech scene, at least one recent set of rankings put D.C. behind only Silicon Valley and San Francisco. The real estate company Cushman & Wakefield issued its Tech Cities report this June, based on factors like higher education, available capital, tech workers and entrepreneurship. According to the report, the District’s tech strengths include its proximity to the federal government and access to a highly educated, stable workforce. Cybersecurity, in particular, is a major subsector, with 55 of the world’s 500 fastest-growing cybersecurity companies headquartered in the area, according to the report.
Washington noted that the tech sector is spread across the city’s eight wards, with co-working spaces and the Howard University incubator major attractions.
“The District is one of the most highly educated communities in the country. We are a community with well-known universities – Georgetown, American, Howard. Grads stay in the city and they stay because there are job opportunities for them,” Washington said.
CBRE reported that the District’s tech sector grew by 16 percent from 2010 to 2013, second only to Silicon Valley in its ability to attract tech workers and businesses.
“The region is strong when Washington is strong,” said Washington said. “We have the jobs. We have the night life. We have the food options. We have the cultural options. We are the heartbeat.”