DATE: Wednesday, July 23, 1997              TAG: 9707230008

SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

TYPE: Editorial 

                                            LENGTH:   60 lines

MILITARY DOWNSIZING RESULTS: LOST JOBS REPLACED WHAT'S NEEDED IN HAMPTON ROADS NOW ARE JOBS THAT PAY WELL

Hampton Roads has enjoyed half an economic miracle. Now we need the other half.

The region has lost 46,000 Navy, shipbuilding and other defense-related civilian jobs since 1985. From 1988 to 1996, the region's share of the national-defense pie plummeted from 4.5 percent to 2.0 percent.

Despite all that, the region has replaced lost jobs and created more. In fact, if local jobs are created as fast in the second half of this year as the first, the region will see 20,000 new jobs in 1997 alone.

In sheer numbers of new civilian jobs, the region has pulled off half a miracle. Consequently, its unemployment rate is well below the national average, despite the aforementioned loss of a whopping 46,000 jobs - surely enough to cripple many regions.

In number of new jobs, Hampton Roads went from the bottom fourth nationally in 1988 to the top third in 1996, and 1997 promises to be even better. That is fantastic progress, especially for a region that traditionally has relied on the military for economic sustenance and that has lacked entrepreneurial spirit.

Companies are being attracted here by the region's enviable quality of life - beaches, mild climate, museums and so on - and by the low cost of doing business. That low cost, sorry to say, results mainly from low wages.

That's where the second half of the miracle is needed. The region needs to create or attract jobs that pay well. Hampton Roads' per-capita income dropped from 94 percent of the national average in the mid-'80s to 87 percent in in 1994, as low-paying service jobs replaced higher-paying military and government jobs. Partly because of relatively low wages, Hampton Roads is discount-store heaven.

John Whaley, director of economics at the Hampton Roads Planning District Commission, recently issued a report that contained the job-creation numbers cited in this editorial.

Next, he said, the commission plans to study metropolitan regions that have high-wage jobs but still grow at a rate equal to or above the national average. The planning commission intends to identify the conditions that enabled those metropolitan regions to create high-wage growth. That combination of high wages and growth is, of course, the ideal, and if other regions have pulled it off, Hampton Roads can, too.

The commission also plans to study regions where wages are declining. From those communities, the region hopes to learn what to avoid.

A report on those findings is scheduled for this fall.

If this region's calling card continues to say, ``Come to where labor's cheap,'' jobs will be created but wages will never catch up with the national average.

With higher wages comes more money to improve the infrastructure, including schools. Better infrastructure leads to jobs that pay more. Jobs that pay more lead to improved infrastructure. And on and on in a wonderful upward spiral.

Higher wages are key. No state or region ever rode to prosperity on a nag named Low Wage.

This region, having pulled off half a miracle, needs but half a miracle more.

It could happen. KEYWORDS: EMPLOYMENT

Send Suggestions or Comments to webmaster@scholar.lib.vt.edu