THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, October 17, 1996 TAG: 9610170372
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER
STAFF WRITER
DATELINE: NEWPORT NEWS LENGTH: 58 lines
Both the good news and the bad news about the future of Hampton Roads' economy come in the same statistic.
Hampton Roads has the fourth-lowest wage rate among America's 100 largest metropolitan areas.
``That's good news if you're a business, bad news if you're a recipient of those wages,'' said John W. Whaley, director of economics for the Hampton Roads Planning District Commission.
Overall, the Hampton Roads economy during the second half of the 1990s stands the best chance in years to create jobs that pay well, Whaley told Wednesday's annual meeting of the Planning District Commission at the Omni Hotel in Newport News.
How has the economy positioned itself to be more competitive?
Through gut-wrenching jobs losses attributable to military cutbacks and by having its wages fall further behind other U.S. cities, Whaley said.
Lower pay and the availability of workers means lower costs for businesses.
Downsizing of the federal civilian work force and the military, along with job losses at Newport News Shipbuilding and Norfolk Naval Shipyard, translate to about 35,000 jobs lost to the region since the mid-1980s.
And since the Defense Department budget began declining in 1987, income, wages and the overall economy in Hampton Roads have only grown at about 75 percent of the national average, Whaley said.
When the military budget was growing, Hampton Roads wages and its economy expanded by about 125 percent of the national average.
Where's the good news?
``We believe the economy is beginning to go through a major change,'' Whaley said. ``Our economy is beginning to show signs of strength that it hasn't shown in a long time in comparison to other metropolitan regions.''
That will happen for several reasons, he said. The rate of defense department cutbacks is slowing, and Oceana Naval Air Station will add 5,000 people by 1999.
Also, the region's low wages puts Hampton Roads in a good position to attract new businesses and make the businesses already here more competitive.
``The cost of doing business in Hampton Roads is extremely low,'' Whaley said, ``and American business does compete on the cost of labor. Globalization should generate jobs - and high paying jobs here in Hampton Roads.''
There's even a chance that Hampton Roads' residents will start seeing their wages climb.
Whaley said the regional economy could ride the coattails of the national economy, which is poised to increase its productivity as the Baby Boom generation enters its most fruitful working years.
Wages generally climb when the labor pool grows slowly and demand for workers increases. Already, a couple of U.S. cities with low unemployment rates have shown significant wage increases. Raleigh-Durham's unemployment rate sits at just over 2 percent, and wages are growing at more than 5 percent annually, Whaley said.
``We will not only get our share of that (national) growth,'' Whaley said, ``but also a growing share of it.''
KEYWORDS: ECONOMY by CNB