Seattle ACCUSED of Destroying Its Own Economy

Added: 2026-05-19

[00:00:00]On May 11th, 2026, former Starbucks CEO Howard Schultz dropped an op-ed in the Wall Street Journal that landed like a grenade. The headline read, "Ceattle turns hostile to the great businesses it made." And in it, the man who built Starbucks from a single store into a global brand accused his home city of chasing away the companies and entrepreneurs responsible for its prosperity. It feels like it's as a trend line. I mean, Ken Griffin last week, but you've seen the exodus of California CEOs to mostly to Florida.

[00:00:35]Few have found their way into my hometown of Austin. It's an interesting moment right now because these cities really need to raise more revenue and and all the things they want to do, all the programs and all the welfares, everything. It requires more. And yet, for some reason, they're not only being hostile, but they're making it incredibly difficult to want to build a business or thrive.

[00:00:55]What the data behind his argument reveals stretches well beyond Seattle and it touches every American city wrestling with the same tensions between growth and governance.

[00:01:06]This is what happens when a city that once stood as the envy of the American economy starts losing the confidence of the very people who built it. The exact words Schultz used matter here. So let's go through them. He wrote that Washington's economic story over the past half century is extraordinary. That Microsoft, Amazon, Costco, and a host of other companies transformed the state into a global center of technology, innovation, and logistics. That ecosystem worked, he argued, because risk-taking was rewarded, growth was possible, and civic leadership understood that private enterprise was not the adversary of the public good.

[00:01:48]And then came the turn. That ecosystem, Schultz wrote, is fractured today. He pointed to chronic homelessness, disorder in core business districts, persistent budget deficits, declining public school outcomes, and a slowing technology hiring cycle.

[00:02:07]Most of his fire landed on Seattle's current mayor, Katie Wilson, who took office January 1st, 2026 after defeating the incumbent Bruce Herrell in an extremely close race. Wilson identifies as a Democratic socialist and Schultz did not hold back. He wrote that she has chosen to cast business as a foil rather than a partner and that her socialist rhetoric vilifies employers even while she continues to rely on them for revenue. State lawmakers in Olympia caught their share, too. Schultz accused them of confronting difficult fiscal trade-offs by emphasizing taxation rather than reform or performance management. And he closed with a line that captures his entire thesis.

[00:02:54]Government too should be judged by results, not intentions.

[00:03:00]Wilson responded through KO News the same day, and her full statement deserves to be heard. She called Starbucks part of Seattle's culture and identity, said her team remains in regular communication with the company's executive team on shared priorities like homelessness, public safety, and affordability, and added that there is plenty of room for common ground. That's the public exchange between the two sides. The question that matters more is whether the numbers back any of it up.

[00:03:32]Seattle's tax environment has changed dramatically in just 5 years, and that shift sits at the center of the business community's frustration. Washington State built its reputation partly on having no personal income tax. That advantage eroded fast. Three new taxes arrived in quick succession, and each one pushed the state further from what it used to be. Seattle's Jumpstart payroll tax kicked in on January 1st, 2021. It targets businesses with Seattle payroll above roughly $9 million with rates climbing from about 0.75% to 2.56% depending on company size and individual pay levels. Revenue grew from 293 million in 2021 to 360 million in 2024.

[00:04:27]But that 2024 figure missed the city's own projection by 46.8 million, an 11.5% shortfall that rattled budget planners.

[00:04:39]Washington's 7% capital gains tax followed, enacted in 2021 on gains above $250,000 a year. court struck it down and then the Washington State Supreme Court reversed that ruling 7 to2 in March of 2023. When the US Supreme Court declined to hear the case in January 2024, the legal fight was over. Firstear collections pulled in $889 million, nearly double what lawmakers had originally estimated. And then the newest layer landed. Governor Bob Ferguson signed what's called the millionaire's tax on March 30th, 2026, imposing 9.9% on household income above $1 million.

[00:05:27]Collections begin in 2029 with the state projecting roughly $3 billion a year from about 21,000 filers, and a legal challenge is already working its way through the courts.

[00:05:40]Schultz himself acknowledged something worth pausing on. He called Washington's tax system broken and described its reliance on a 10.55% Seattle sales tax as deeply regressive.

[00:05:53]His complaint was not simply that taxes are too high, but that new revenue is being stacked onto a structure that nobody has bothered to fix. Fiser Investments founder Ken Fiser responded to the capital gains ruling with blunt theater. The same day the Washington Supreme Court upheld the tax, March 24th, 2023, he announced his company was pulling its headquarters out of Cameas, Washington, and relocating to Plano, Texas. His statement read, "In honor of the Washington State Supreme Court's wisdom and knowledge of the law, Fiser Investments is immediately moving its headquarters from Washington State to Texas."

[00:06:34]A spring 2026 survey from the Association of Washington Business found that 55% of 407 business leaders pled were considering moving their personal residents out of state, up from 44% the previous quarter. That survey came from a business advocacy group, not a neutral pollster. So the numbers reflect intent rather than action. A double-digit jump in one quarter still tells you something about the direction of the mood.

[00:07:08]The downtown office market in Seattle tells the ground level version of the story. And the figures are hard to look past.

[00:07:16]Vacancy hit a record 35.6% by the end of 2025 according to Kushman and Wakefield, ranking Seattle second worst among major American cities behind only San Francisco. Belle, sitting just across the lake, posted a 22% vacancy rate with rents running about double what Seattle commands, which tells you exactly where companies have been redirecting their footprint.

[00:07:43]John Scholes, president of the Downtown Seattle Association, put it plainly. He told reporters that city leaders over the last 5 years have made Seattle less than competitive and that it now costs more to operate in Seattle than to set up across the water in Belleview.

[00:07:59]Amazon's behavior illustrates the point better than any quote. The company still calls Seattle home, but Belleview has quietly become its growth center, expanding from a few hundred employees to roughly 15,000 in 5 years. Back in Seattle, Amazon vacated at least six buildings totaling about 1 million square ft near its headquarters since 2020. And the University of Washington with its 50,316 employees has now passed Amazon as the city's largest employer. Two rounds of major layoffs compounded the damage.

[00:08:35]October 2025 brought 14,000 corporate cuts with Washington state warrant filings showing about 2,300 of those positions eliminated in state. Late January 2026 brought another 16,000 globally and state filings revealed 2,198 more. Washington workers affected, including 1,47 in Seattle and 626 in Belleview. That adds up to roughly 4,500 Washington State Amazon corporate jobs erased in 4 months.

[00:09:14]Amazon was not operating in isolation.

[00:09:18]Expedia disclosed 162 Washington state cuts in January 2026.

[00:09:24]Meta eliminated 331 Seattle area positions the same week. And T-Mobile slashed nearly 500 jobs, mostly in Belleview. The Puget Sound Regional Council tallied the broader damage at approximately 12,900 jobs lost across the 4count Seattle region in 2025, marking the first annual job loss since 2009 outside of the pandemic. Starbucks layered its own departure story on top of all that. On April 21st, 2026, the company announced a hund00 million investment in a new Nashville corporate office, bringing up to 2,000 jobs to a 250,000 ft complex set to open in 2027.

[00:10:13]Some Seattle teams in technology and supply chain will make the move to Tennessee.

[00:10:18]On the very day Schultz's op-ed ran, Starbucks confirmed 61 more headquarters layoffs in Seattle, tied to a technology team reorganization, and the flagship reserve roaster on Capitol Hill had already gone dark in 2025.

[00:10:36]Schultz raised homelessness as a core symptom of Seattle's decline, and the data here is difficult for anyone to dismiss, regardless of political leanings.

[00:10:46]16,868 people were counted experiencing homelessness on a single night in King County during the 2024 point in time count. A 26% jump from the 2022 figure.

[00:11:00]Roughly 9,800 of those individuals had no shelter at all. What makes those numbers especially painful for taxpayers is the spending attached to them. The King County Regional Homelessness Authority operated on a budget of approximately $250 million in 2024 with Seattle contributing about 42%.

[00:11:22]A forensic audit by the firm Clark Nuber, released April 17th, 2026, found that the agency had burned through its reserves and reached a negative cash position of roughly $44.7 million as of July 31st, 2025 with 8 million in receivables that could not be reconciled.

[00:11:44]King County Council member Rod Dumbowski called it a five alarm fire and the county council voted in May 2026 to demand a corrective plan by August. FBI data for 2024 painted a similarly grim picture for public safety, placing Seattle's total crime rate at 5,783 per 100,000 residents, the fourth highest among the 30 largest cities in the country and a 173% above the national average.

[00:12:15]Property crime drove most of it with a rate above 5,000 per 100,000, ranking third worst nationally behind Memphis and Portland. Schultz described the pattern in his op-ed as a slow drift rather than a sudden collapse. Downtown vacancies reduce foot traffic, he wrote.

[00:12:34]Declining foot traffic weakens small businesses. Employment falls. Revenue shrinks. Services erode. Confidence, something that is hard to build and easy to lose, begins to evaporate.

[00:12:50]Seattle's story sits inside a much larger national pattern that has been unfolding since 2020.

[00:12:57]Boeing relocated its global headquarters from Chicago to Arlington, Virginia in May of 2022.

[00:13:05]That same June, Caterpillar announced a move from Deerfield, Illinois to Irving, Texas, and Ken Griffin pulled Citadel and Citadel Securities out of Chicago for Miami, later revealing that his Chicago building had 25 bullet holes in the front. Oracle followed a more unusual path, moving from Silicon Valley to Austin in 2020 and then announcing another relocation to Nashville in 2024, drawn by 65 million in Tennessee state incentives and 175 million in local tax breaks from the city. IRS migration data for 2022 to 2023 lays the national picture out in raw numbers. Texas gained over 56,000 net tax filers while Florida gained over 55,000 with North Carolina, South Carolina, and Tennessee all posting strong net gains. California lost more than 100,000 filers during that period. New York shed nearly 72,000 and Illinois dropped over 28,000.

[00:14:09]Florida alone absorbed approximately $20.7 billion in incoming adjusted gross income with about 17 billion of that flowing from high earning households.

[00:14:20]Washington state's own migration numbers tell a particular version of this story.

[00:14:25]The state lost more than $500 million in adjusted gross income to outbound moves and it landed in a small group of states that actually gained incoming residents but still lost income. meaning the people arriving earned less on average than the people who packed up and left.

[00:14:44]None of this means Seattle is finished.

[00:14:47]And the numbers on the other side of the ledger deserve equal attention. Greater Seattle's tech sector still generates approximately 149 billion in annual economic impact and employs more than $193,000 people. The metro area's median household income sits at about $11,700.

[00:15:07]good for fourth highest in the country.

[00:15:09]Microsoft keeps roughly 50,000 workers in the region. Google employs about 7,200 across Seattle and Kirkland, and the broader tech workforce ranks second nationally behind only the Bay Area.

[00:15:24]The Port of Seattle's marine cargo operations generated over 52,000 jobs and 14 billion in business output in 2023. And the 2025 cruise season alone is projected to support more than 5,000 jobs and 1.2 billion in revenue. Even the battered office market showed one faint sign of a pulse. Kushman and Wakefield recorded positive net absorption of about 191,000 square ft in the fourth quarter of 2025, the first quarterly gain in more than 3 years.

[00:15:58]So where does all of this leave Seattle and what should viewers take away from it?

[00:16:04]Howard Schultz is not a disinterested voice in this story. He relocated to Florida shortly after the millionaire's tax was signed. He carries decades of public disputes with Seattle leadership and he is a billionaire writing from a state with no income tax about the city that made him one. That context matters and any honest assessment of his op-ed has to include it. But the numbers carry their own weight. A 35.6% 6% downtown vacancy rate, a 26% increase in the homeless count, a homelessness authority running a 44.7 million cash deficit, roughly $4,500 Amazon jobs cut in Washington in 4 months, a new business tax for social housing, a new state millionaires tax headed for court, and a business community where more than half of surveyed leaders say they are thinking about leaving. Schultz closed his op-ed by writing that Washington once embodied the future of the American economy and can again, but that the current government needs to learn that future entrepreneurs will not be attracted by ineffective public systems, especially when paired with political rhetoric that demonizes business.

[00:17:23]Whether you share his view or reject it entirely, what is unfolding in Seattle right now amounts to a case study in what happens when the economic engine of a city and its political direction start pulling against each other. For millions of Americans, watching from other cities dealing with similar pressures, the outcome in Seattle will say a lot about what comes next for the rest of the country.

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[00:17:53]We cover the economic stories that touch your daily life with the facts laid out and the sources named. Thanks for watching and I will see you in the next one.