Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 15, 1994 TAG: 9405180007
SECTION: EDITORIAL PAGE: B-3 EDITION: METRO
SOURCE: By ADRIENNE M. BIRECREE
DATELINE: LENGTH: Long
We have lost high-paying white- and blue-collar jobs as firms have downsized, moved or closed subsidiaries and branch plants. Compared to other regions in Virginia and our closest southern neighbors, our rate of job creation has been sluggish. Relatively low unemployment hides the fact that many workers are trapped in low-paying, often part-time, jobs where their skills are not fully utilized. Many of our young people feel forced to leave the region to find better jobs elsewhere.
The debate has exhibited two noteworthy features. First, it gives the impression that there is some ideal ``quick fix'' for our economic problems if we can just find it. Second, it has focused almost exclusively on traditional approaches - marketing efforts and incentives - for attracting new employers.
On the first point, economies, even local ones, are incredibly complex. There are no simple, fast solutions to problems that have taken decades to develop. But at least public discussion of our problems and possible solutions is under way.
On the second point, an appropriate combination of both traditional and alternative ``enterprise'' approaches to economic development is likely to bear fruit. Enterprise programs, originally conceived in the early '70s, provide educational services, technical services and financial support to local businesses.
Such programs usually include applied research for innovation (an area where Virginia Tech is invaluable), entrepreneurship programs, loan or equity programs for small-business start-ups and expansion, and development of domestic- and foreign-market niches and appropriate technology for small- to medium-sized firms.
A related policy program is providing wage subsidies or forgiveness of employer contributions to mandatory state benefit programs, in lieu of other incentives. Revenues from corporate taxes, as well as from taxes on workers' growing incomes, would provide the necessary funds.
This mix of approaches would both broaden and diversify our economic base and the job opportunities available. It also would reduce our dependence on single large-scale employers or industries, and increase our control over regional job creation and labor standards.
For decades the bulk of job creation nationally has come from small to medium firms - the kind that may better fit the sites available in our region. In addition, small to medium local businesses that have received support from enterprise programs may be more apt to reinvest their profits to expand within the region than would subsidiaries and branch plants controlled by mobile multinationals.
Education is important to the success of such a multifaceted strategy. Large research institutions such as Tech are essential to local technological innovation; other colleges and universities to targeted worker-retraining programs and technical assistance to new and old local firms. Most important, all of these institutions, along with both public and private primary and secondary schools, ultimately are responsible for producing a regional work force with good skills and work habits.
Our young people, our potential future labor pool, are our most valuable assets. To better prepare them to cope with the ever-changing global economy, whether they remain in the region or not, we must increase financial support for education. Curriculum reform at all levels to enhance reading, writing, mathematical, computer, analytical and entrepreneurial skills - and activities that foster good work habits in both high-school and college graduates - must be encouraged.
The resulting future labor pool will attract and generate lucrative jobs in the region, and increase our young people's ability to move among industries. Some curricular changes are already under way, but they must be expanded.
Regionally coordinated and cooperative-development planning and programs are imperative. First our ``region'' must be defined. The Virginia Department of Labor's Southwestern Region - including the cities of Roanoke and Radford, their surrounding counties and the counties comprising the official Appalachian Region - makes the most sense.
Despite frequently divisive political boundaries, there are still significant economic, political and social interrelationships that exist throughout Southwest Virginia. Once the region is defined, the existing institutional structure for economic development should be streamlined and restructured to eliminate duplicate, often counteractive development activities that now occur.
All economic-development agencies and offices that comprise the reorganized structure should constantly be kept apprised of each other's activities so they can be coordinated effectively. Cooperation and coordination does not necessitate eliminating diversity, but rather incorporating it into a healthy, integrated regional whole.
To promote this outcome, local development officials should consider entering into mutual-support agreements that prohibit them from trying to lure businesses away from each other. This would greatly reduce the public resources used for intraregional competition for outside firms.
Rather, prospective employers would be directed to the location that best meets both its and the region's needs, under the assumption that the entire region benefits no matter where the employer locates. Such mutual-support pacts could prevent new firms from playing one locality against another to the detriment of the level of benefits that might otherwise accrue.
To facilitate coordinated regional development planning, an economic model of the region, including an inventory of our resources (labor force, natural resources, infrastructure, etc.) and an analysis of our current strengths and weaknesses must be completed. To address current and possible future employment problems, characteristics of the regional labor force - age, gender, education and skill level, employment status - and its geographical distribution need to be determined.
An estimate of the number of discouraged workers (those who have given up looking for work and are not included in unemployment statistics) would also be useful. Many colleges and universities in the region could play key roles in this undertaking.
Increased public participation in setting regional priorities is also highly desirable. Those stakeholders whom future economic development programs would affect should be asked to respond to difficult but essential questions: What kind of growth do we really want? What are we willing to pay to attain it? How long are we willing to wait for the pay-off?
Community input is essential for establishing support for regional coordination and cooperation, as well as for specific programs. One way to overcome intraregional political and social discord might be to promote Roanoke as the northern gateway to Appalachia, and work together as a region to change the Appalachian image from one of poverty and coal mining to one of pristine beauty, deep American cultural roots, a strong work ethic and as-yet-unrealized potential.
Adrienne M. Birecree is an associate professor of economics at Radford University.
by CNB