DATE: Saturday, August 30, 1997             TAG: 9708290017

SECTION: LOCAL                   PAGE: B6   EDITION: FINAL 

TYPE: Opinion 

SOURCE: BY LEONARD I. RUCHELMAN 

                                            LENGTH:   63 lines

ANOTHER VIEW: LOW-WAGE JOBS GROWING IN HAMPTON ROADS

A recent study of the Hampton Roads economy by the Hampton Roads Planning District Commission has posed an enigma on the important issue of job development in the region. For while the number of new civilian jobs in the area has been increasing at a fairly rapid rate, thereby compensating for military downsizing, most of these new jobs do not pay very well. As low-paying service jobs have been replacing higher-pay military and government jobs, per-capita income in Hampton Roads has come to be about 87 percent of the national average - down from about 94 percent in the mid-1980s. To quote from The Virginian-Pilot (July 23), ``Partly because of the relatively low wages, Hampton Roads is discount store heaven.'' An important question which must be addressed is: If other comparable regions like Charlotte, N.C., and Jacksonville, Fla., evidence high wage growth, why not Hampton Roads? Though answers must await careful investigation, urban scholarship provides some preliminary insights worth pondering.

Of special significance is the role of so-called Third Wave technology in bringing about urban change. Historically, cities have grown as centers of commerce, largely because of the need for physical proximity among firms, suppliers and customers. Clustering of people, infrastructure and suppliers allowed for efficient production and distribution of goods and services.

Today new technologies, particularly digital electronic technologies that transmit information cheaply, instantaneously and at high volumes almost anywhere, are creating closer connections between economic activities while enabling them to be physically farther apart. Consequently, there is a loosening of spatial linkages between firms and their suppliers, customers and other units within the firm.

Functions that can be farthest apart spatially are usually those that are most routine and the most information based. Back office work makes up for a large share of such activities. By transferring such work to low-cost locations, firms are better able to hold down their operating costs. Similarly, many manufacturing firms continue to spin off low-skill assembly and warehousing functions to low-cost regions because telecommunications facilitates communication between physically distant headquarters and such branch operations. By and large, these are the lower paying jobs that have been making their way to Hampton Roads.

To help explain the region's inability to attract high-paying jobs, it can be noted that many business functions, though supplemented by information technology, still rely on face-to-face contact. These are usually more complex functions that are nonroutine in nature and usually implemented by managers, professionals and executives in corporate headquarters and high-tech industries. A key element here is the ability of a region to assure convenient physical access through efficient and amenable transportation whether by foot, taxi, highway, rail or airline. As one bank executive noted, his firm wants to keep travel time within a two- or three-hour limit in order to be able to drive or fly out, consult and return in a day. Such form of expectation reveals much of the source of the Hampton Roads low-wage job growth enigma.

Though there are many factors that determine the types of firms and the quality of jobs that can be recruited into an area, e.g., quality of life amenities, the availability of strong research institutions, transporting weighs in most heavily. Growing highway congestion, tunnel-traffic snarls and the absence of frequent and cheap air transportation all serve as barriers that are difficult to overcome. Until these conditions are remedied, the region's employment market can expect more of the same. MEMO: Leonard I. Ruchelman is professor of Urban Studies and Public

Administration at Old Dominion University.

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