The 2026 Competitiveness Redbook from the Washington Alliance for a Competitive Economy provides a data-driven look at the state’s economic performance, highlighting areas of strength while identifying challenges affecting Washington’s competitiveness.
The report points to continued strength in areas such as the state’s high-tech sector and export activity, but also notes slowing job growth and rising costs that may affect employers. Washington added 19,800 non-agricultural jobs last year, representing 0.5% growth and ranking 35th nationally. This compares with 56,100 jobs added the previous year and 109,000 jobs added a decade ago.
The report also examines Washington’s tax structure and business costs. According to the Tax Foundation, Washington ranks 45th nationally for overall tax competitiveness, with corporate taxes, sales taxes, and unemployment taxes among the least competitive in the country. CNBC’s rankings similarly place Washington near the bottom nationally for cost of doing business and business friendliness.
Additional cost pressures identified in the report include unemployment insurance costs, workers’ compensation expenses, minimum wage levels, and fuel taxes. Washington’s minimum wage remains the highest in the nation, while gasoline and diesel taxes rank among the highest nationally.
The report also highlights changes in one of Washington’s longstanding economic advantages: affordable electricity. While rates remain relatively competitive, industrial electricity costs have increased compared with previous years, moving Washington from the top-ranked state five years ago to seventh for industrial customers.
The report notes that these economic factors have broader implications because businesses contribute significantly to funding state and local services. According to the data, employers account for 49.6% of state and local tax collections, contributing approximately $10,100 per employee.
The 2026 Competitiveness Redbook is produced by the Washington Alliance for a Competitive Economy, a nonprofit research institute focused on improving the state’s economy and business climate. The full report is available here.
