THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, October 23, 1995 TAG: 9510210190
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Column
SOURCE: Ted Evanoff
LENGTH: Medium: 86 lines
Whether in the shipyards on the Elizabeth River or the office parks in Virginia Beach, you hear the idea over and over. Tidewater needs high-wage jobs.
The fact is, we're not getting them. Neither are most cities, one reason why mayors and governors in almost every region of the country call economic development a top priority.
Cities and states want stronger tax bases. They want more high-wage jobs. Raise the per capita income $1,000 and social tension visibly eases.
Of course, what cities and states want and what they have gotten are entirely different.
Every year, about 3 million to 4 million men and women in the United States turn 18. In the last year, the economy has produced about 2.6 million new jobs. Obviously the bodies outnumber the work.
And those jobs that are filled often demand skills beyond the high school education common to most in America. After all, only about one of every four people in the nation has a college degree.
All this was underscored last week when Gov. George Allen appeared on the edge of Hampton Roads.
Almost each week now, the governor visits another city, presides over the smiles and the handshakes as another company announces it'll open a branch plant in the Commonwealth.
Last week, Allen was on the edge of Hampton Roads in Toano for the groundbreaking ceremony by solar panel maker Solarex Corp. A few days earlier he announced the arrival of Avis Inc.'s operations center in Virginia Beach.
The week before he greeted computer maker Gateway 2000 in Newport News.
The three companies together will employ 800 to 1,600 people. While the jobs are welcome in Hampton Roads, a few thousand $20,000 positions, if they do pay that much, would lift Tidewater's per capita income hardly at all. Nor would the addition of 10,000 $20,000 jobs,
If you take every dime reported to the IRS by every man, woman and child in Hampton Roads, and divide the money evenly among everyone living in the metro area, each person would get about $20,700. That's the per capita income.
To raise per capita income $1,000 would require a sudden infusion into the Tidewater economy of $1.5 billion. That's an enormous sum. It's as if Avis employed 36,000 people in Virginia Beach at $40,000 a year. It's not going to happen.
Hampton Roads can study its robust neighbors, Raleigh, Richmond and Charlotte, where the per capita income in each city exceeds Tidewater's.
In fact it's tempting to rank the cities like clubs in the football standings, except Hampton Roads isn't a club. It's a complex metropolitan area, 1.5 million people in 15 cities, towns and counties spread between Williamsburg and the North Carolina Outer Banks.
It's a metropolis unlike any other in the country. Raleigh rests on the state capital and a unique technical center built around two major state universities; Richmond relies on the state capital and homegrown corporate giants; Charlotte hosts huge banks and their financial empires.
Tidewater is a one-company town, a federal town shaking off the slumber that still grips Washington, Baltimore, Philadelphia, New York and Boston.
In the '73, '75 and '81 downturns, federal spending rose expressly to stimulate the national economy. This time around we're in a regional recession, one that lingers precisely because Washington's hand in the economy has diminished.
Today, the government's debt represents about 2.3 percent of the nation's gross domestic product, the total value of all goods and services produced in the country. Next year, government debt will fall to about 1.9 percent of GDP.
Is that a lot? Well, consider Japan, which has tried to revive its sick economy with a burst of government spending. Public debt in Japan, the world's largest economy after the United States, is projected to rise to 6 percent of GDP next year from 4.3 percent this year.
What does Tidewater do to gain high wages? Truth is, the region seemingly bickers over water, regionalism, poor neighborhoods, urban renewal.
It overlooks its assets, though Hampton Roads, thanks in part to the Navy, possesses an uncommon quality, a workforce with talents matched by few cities in the nation.
What's more, droves of engineers and scientists work in the federal labs, service the military.
Why not find a way to harness the engineers and the workforce? by CNB