I was talking to a site consultant the other day and he related to me a story that, although I had not heard that particular one, I had heard many similar to it. I’m sure you have, too.
His story was about one of his clients, a major retail company that was looking for a place to locate a fairly sizeable distribution center. Retail being an industry with notoriously low profit margins, the company was looking to pay its employees as close to minimum wage as possible. Not all of its employees, of course, but the unskilled laborers for sure.
I’m sure most of you know where I’m going with this story.
When our consultant sent out his requests for information to a number of communities, more than half of them replied back that they weren’t interested in the project.
I wasn’t surprised. Over the past several years, particularly when the economy was robust and unemployment rates were down at the 2-3 percent level, I’ve had dozens of economic developers tell me basically the same thing. Where once they had actively pursued projects such as call centers, they now turned them away.
Their logic was simple. With unemployment at such low levels -- basically, all that was left were the hard-core unemployed and the unemployable -- economic developers could be “more choosy” about what type of jobs they brought to their community. Now that the unemployment monster had been tamed, they could focus on attracting “jobs with a future” in industries that paid well and also offered significant tax revenues.
After all, that’s a major part of the noble profession of economic development: to improve the standard of living of their community and their neighbors, as well as to provide a future for their neighbors’ children.
It made good sense to me, and we usually quickly dropped the subject and continued on with our round of golf.
What my site consultant friend said next, however, made even more sense and showed me how shallow my thinking had been.
“You can’t tell me that there aren’t people in those towns working at fast food restaurants who wouldn’t love to have a job in a large distribution center, with an opportunity for advancement,” he said, “AND earn a couple of bucks an hour more at the same time.”
Of course, he was right. Dead on target.
Sometimes we have a hard time remembering that, as economic developers, we represent the entire community, not just the upper half, or three-quarters, or 97 percent. For some people, $7 or $8 an hour is a great job, or certainly a lot better than they’re currently making. It’s a long jump from short-order cook to computer analyst or biotechnology research assistant.
Sometimes we focus too much on the big picture and forget about the micro level.
As a general rule, sure, when unemployment rates are below 4 percent, we can afford to elevate our sights a little higher than we would if the rate were, say, at 8 percent. But we also need to remember that the bottom end of the economic ladder is a category in and of itself, and it’s one that we need to put a good deal of thought and planning toward.
What do I mean, you might ask?
The American Dream is about believing in a brighter future. Ask yourself what you want to be doing in 10 years, and how you see yourself getting there? Is there a pathway, clear or otherwise, to get you there? Chances are, you’ll at least be able to visualize how, with a lot of hard work and a little bit of luck, you might achieve your goal.
The same is true for people who find themselves, for whatever reason -- immigrants, undereducated, etc. -- at the bottom end of the economic ladder. They, too, need a path up the economic ladder, even if it doesn’t wind up at the chairmanship of General Motors. The important thing is that the angle is going up, not down. That’s the tradition path into middle class.
When I took my first economics course in college, our economy was considered to be at full employment when the unemployment rate fell to 5 percent. That final 5 percent was considered to be unemployable for one reason or another. Welfare reform and a bustling economy drove that number down to 2 percent and below in many metro areas during the late 1990s.
What employers found is that many of these people, at least initially, lacked the work ethic skills necessary to hold a job. For many, the concept of showing up for work every day at the prescribed time and place was as alien as quantum physics is for the rest of us. Still, it’s a concept that is perfectly learnable. If you doubt it, just look at what the armed services have done, and continue to do, for upward mobility in this country over the last several generations.
As economic development professionals for your community, you have a responsibility to serve all of your constituents, not just the majority. So, next time a consultant comes to you with a project that involves pay rates at the $20,000 a year level, at least give it a second thought.
There are still some people down at the bottom end of the economic ladder who would consider those to be great jobs.
Means the article is accessible only to our magazine subscribers.
