Seattle's JumpStart Jobs Boom

In 2020, Seattle’s leaders passed a teeny, tiny tax on high incomes, with what turned out to be better than 2 to 1 support from Seattle voters. They called it “JumpStart.”

Just like now, Washington State’s tax rates were lower than average, the lowest of all blue states, and lower than many red states. They were also super screwed up. In Washington, we tax the poor a lot, and are extra easy on the rich, because we rely so heavily on sales taxes. In fact, in 2020, Washington was the worst in the nation on this measure. Today, we are second from the worst (congratulations, Florida!)

In response to Covid-era threats and this low tax lunacy, some fantastic community leaders like Katie Wilson—who is running for Mayor of Seattle—partnered with some fantastic Seattle City Councilmembers like Teresa Mosqueda and previous Mayoral candidate Lorena Gonzales. They passed JumpStart, a modest payroll tax on high incomes at largish companies, charging those companies a rate of .7% to 2.4% against the income of their high earners. 

After more than a decade as a bit player on the council, our current Mayor, Bruce Harrell, was off the political stage for the moment. But his later opposition to expanding the tax, and his allies’ unhinged howling about the economic apocalypse this was sure to create gives us a sense of where he would have landed. 

The response from the Chamber of Commerce, Washington Technology Industry Association, and Downtown Real Estate industrial complex was as unequivocal as it was uninformed (someone really should introduce them to actual economics research). As always, they chanted some version of their mantra: “These tax and spending proposals will isolate Seattle and send jobs outside the City.” Mayor Durkan, who was our ineffective centrist Mayor before our current ineffective centrist Mayor, channeled her inner Ronald Reagan when she opposed the bill and implied it might actually decrease overall city revenue.

While such voodoo economics have long been debunked, this crowd loves to play pretend.

They were wrong, of course.

In recent weeks, the fantasies have crept back out - I have been hearing multiple assertions that Seattle’s only tax on the rich - the “JumpStart” payroll tax, has been driving jobs out of town. From tired jokes about the “Bellevue full employment tax” to claims by Mayoral candidates that it has made our economy take a turn for the worse - it has started to sound like conventional wisdom that the tax has somehow hurt jobs.

Meanwhile, in reality-land, jobs have boomed.

So I did some poking around, including with city insiders, to find out the source of these bizarre claims. It turn out they are completely unfounded.

JumpStart was projected to raise $200 million in 2021—but it raised over $230M. It has since grown to $383 million in 2025.

Tax revenue is 91.5% higher than the 2020 baseline, or 61% after inflation. It is 65% higher than the original 2025 projections, 39% after adjusting for inflation.

This means that our highly paid workforce has expanded + gotten raises so much and so fast that compensation is up over about $7B a year since 2021. It is up a staggering $9.7B in compared to the 2021 baseline that was projected in 2020, and was probably accurate at that time. (This is a fair assumption, since tech job growth was high in 2020). These numbers are adjusted for inflation.

$9.7 billion per year is enough to spend $250,000 per job on 18,800 new jobs while giving 100,000 people a $50,000 a year raise.

At the end of 2019, we were already a top-tier, highly-paid city. In 5 years, total compensation for highly paid workers increased by over 60%, even accounting for inflation. That kind of growth is more like Chinese GDP in the 2010s than it is like a classic rich-world, mature economy growth.

To be clear, we don’t have clear data on how much of $9.7 billion in increased compensation was due to raises versus new jobs. Many highly paid people, especially at Amazon, receive much of their pay in the form of stock, so surely some of it was due to fast growth in the stock market.

But that cannot account for all of it. Even Amazon’s superstar stock is only up 36% over five years, or 29% after adjusting for inflation. Tableau (Salesforce), another big employer, is only flat with inflation. Starbucks (think HQ employees - we don’t tax barista salaries) is up less than inflation—or down, in other words. Others like Google and Meta have grown faster, but represent a smaller share of the workers.

In short, a bunch of this new revenue is likely due to a bunch of new jobs over that time. If JumpStart is so effective at driving jobs out of Seattle, why were jobs exploding over that period of time?

Call it the JumpStart jobs boom.

Harrell’s “case” against JumpStart

I went hunting to see if Harrell had any evidence to the contrary. It seems the only argument he has managed to muster is found in a statement from the City as reported by King 5. The city says “the tax revenue growth was “significantly” smaller than the growth of wages in King County, which implies payroll growth happened largely outside the Seattle tax base last year.”

Harrell seemed genuinely delighted:

But this is ridiculous. First, even if wage growth was faster in King County than, say, revenue from JumpStart in Seattle—that would not show Seattle was at a disadvantage due to taxes for two reasons.

1. We are in the middle of a soft national market for tech jobs, and tech is more concentrated in Seattle than in King County overall. If there were a decline in tech, nationally, and all else was equal in King County, we would expect a greater decline in Seattle.

2. The county wage data is a reference to all wages. JumpStart is only levied on high paying jobs at larger companies. It is perfectly possible for there to be more growth in low wage jobs or jobs at small companies than there is in high paying jobs at large companies for some period of time, and that can perfectly well have nothing to do with taxes.

But even this doesn’t matter. Do you want to know why?

The statement by the city is JUST NOT TRUE. Perhaps the data they had then was different, but as I just demonstrated, that still would not imply Seattle was underperforming because of JumpStart. And in any case, its definitely not true in the most recent data.

The latest Bureau of Labor Statistics data shows that King County Wages per employee grew 13.2% in 2024. Total employment grew .3%. Multiplied, this is an overall growth in payrolls of 13.5%. Seattle’s JumpStart revenue (and thus compensation subject to JumpStart) grew at a 14.3% rate—FASTER than King County’s.

In other words, we are five years into this tax and there is no reason to believe it has hurt us in any way.

Notably, Harrell has not retracted his statement.

A more moderate case against JumpStart?

Setting aside the silly economic conservatism assumed by Harrell and his allies, a more serious, moderate skeptic of JumpStart could make a more modest claim. Perhaps they might claim that the tax has a modest negative impact on our economy, so even though we went through a jobs boom, the giant boom would have been an EVEN BIGGER BOOM.

This is certainly possible, but highly speculative given what economic research shows is the normal pattern for regional variations in taxes. We would have to be some sort of outlier, and there is no data to suggest this is the case. So while it is possible, there is no evidence to suggest it is actually true.

Just as important, with this tax we brought in hundreds of millions to fund affordable housing (Harrell is sitting on a lot of this), green investments, and small business support. It saved us from truly catastrophic levels of human services cuts last year when other typical revenue sources like construction fees fell.

A darkening national economic outlook

Now that national economy is looking weak, our biggest companies and their paid propagandists seem ready to seize the opportunity to pretend rising unemployment is due to our little local tax.

But employment has slowed everywhere, including Seattle. We may even see a recession. The national market in tech is getting especially soft, with tech layoffs cropping up every week in the news. Microsoft—which is in Redmond and is not subject to the JumpStart tax is laying people off pretty aggressively. Meta/Facebook has also laid tons of people off all over the country too.

Unfortunately, the bearish employment market in tech leaves Seattle extra exposed. Tech workers make up a larger share of Seattle’s workforce than any other city. When big tech starts making big layoffs, we’re bound to feel it. The greater Seattle area—which includes Bellevue and Redmond and other large concentrations of tech jobs not subject to this tax—is clearly facing a softer job market for the same reason. This is also part of why the Eastside’s commercial real estate vacancies are high.

In other words, whether or not we have the JumpStart tax, payroll revenue growth is very likely going to slow given national economic factors. Given the news that Trump may be pushing is into a recession, and given that his policies will be extra hard on our trade-dependent regional economy - there is a real risk these revenues could drop.

That is a problem.

But it in no way supports the case that JumpStart is somehow bad for jobs. So far no one has produced any real evidence that JumpStart has caused anything negative in the Seattle economy, ever. All the data suggests so far that we are subject to the same changing economic winds as everyone else.

Still, I worry that our mainstream local media will play along with this complete fiction, just like when they played pretend that the local crime spike had nothing to with a national crime wave and was because a few Seattle cops got their feelings hurt when the Seattle city council said some mean things.

Tell the truth

Look. Seattle is going to face booms and recessions, often created by national circumstances out of our control. Seattle will overperform our neighbors and underperform them. There will be variances in outcomes due to industry mix, housing costs, crime, and who knows what else. All of these things can produce slight differences between jurisdictions.

But it should be very, very clear by now that there is either no negative economic effect from JumpStart - or that it is so small as to do nothing to determine any outcome for the first half decade of its life.

It’s time for these people to find something else to lie about. Or maybe listen to the genie and start telling the truth.

*I calculated likely increased payrolls by taking the excess JumpStart revenue, dividing it by the 2025 value of a 2021 dollar, and then dividing it by my estimated average JumpStart tax rate (1.5%).