THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, July 25, 1996 TAG: 9607250002
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Editorial
SERIES: PART ONE OF TWO
LENGTH: 73 lines
Only a handful of the country's 100 largest Metropolitan Statistical Areas are cheaper places to do business than Hampton Roads, according to John W. Whaley, director of economic services at the Hampton Roads Planning District Commission.
In one respect, the relative cheapness of doing business here is terrific news. ``We are in a position,'' Whaley said, ``to recruit companies to Hampton Roads based on a low cost of operations in this region.''
But in most respects, the low cost of doing business here is terrible news. ``It means,'' Whaley said, ``that earnings per worker are very, very low . . . compared with other regions in the country of our size.''
One study showed that all 15 MSAs usually compared with Hampton Roads exceeded this region in per-capita income growth from 1983 to 1994. Nashville led with nearly $4,000 in constant-dollar income growth per capita. Richmond, roughly in the middle, enjoyed $3,000 in per-capita income growth. Hampton Roads, with only about $1,200 in growth, came in behind Raleigh, Memphis, Charlotte, Roanoke, Greensboro, Richmond, Atlanta, Columbia, Baltimore, Greenville, Jacksonville, Charleston, Tampa and Orlando.
It's no secret what went wrong here.
In the late '60s, an amazing 50 percent of all Hampton Roads paychecks came from the Department of Defense. The checks went to military personnel and to civilians working for the military or for defense contractors.
Following Reagan's push to build a 600-ship Navy in the '80s, the percentage of paychecks here from the Defense Department has steadily declined to the present-day 25 percent. In most regions, nongovernment employees out-earn government employes. Here, it's the other way around.
After peaking in 1986 at 95 percent of the national average, local per-capita income plummeted to 88 percent of the national average in 1994. This is not progress.
The one income category in which Hampton Roads exceeds the national average is transfer payments. That's income received for which services were not provided, such as unemployment compensation, welfare, pensions and Social Security. A big reason transfer payments are higher here is the large number of military people who choose to retire in Hampton Roads.
Where Hampton Roads falls behind national averages is in earnings per worker and in the ratio of workers per total population.
While salaries are barely increasing, our ratio of workers per total population is actually dropping. At the end of the Reagan bump upward, 582 of every 1,000 Hampton Roads residents worked. Today that number is 559.
Each person not working pulls down the average per-capita income, unless the person has a hefty source of income like a good pension or investments.
Skilled workers are seeking employment elsewhere. Lack of well-paying jobs was the reason more people moved out of Hampton Roads from April 1, 1990, to July 1, 1995, than moved in. Of the 23 planning districts into which Virginia is divided, Hampton Roads was the only one to have more people migrate out than in.
It's a dismal picture. Low-wage government jobs are the high-wage jobs in Hampton Roads. The kinds of employers attracted to the region are those seeking cheap labor. Skilled labor is leaving the market for greener pastures. And a disproportionate percentage of the population is not employed at all but depends on welfare, Social Security and pension checks.
What's needed for our economic health is private-sector job growth - 7,000 new jobs a year, instead of the 4,000 we've been getting in the '90s. But not just any jobs will do. To achieve growth in per-capita income, high-wage jobs are needed.
Whaley believes a ``wake-up call'' has been received by Hampton Roads officials. They are aware that the region's economic news is not good.
But so far that hasn't prevented inter-city squabbling while our wages fall farther behind those in competing metropolitan areas. What we need is intercity cooperation to create an environment able to attract high-wage employers. MEMO: Tomorrow: Entrepreneurs needed by CNB