Date: Tue, 7 Jun 2011 19:52:49 -0400
From: Jeffrey Starkweather
Subject: Can someone explain how cutting economic development investments, without cutting taxes, creates local jobs?
I spoke to the County Commissioners’ public hearing recently about the negative impact on job growth of budget cuts to education, environment protection, libraries and recreation.
I did not call for a tax increase, as some anonymous posters in a related site assumed or purposely made up. Instead, I called for using existing budget resources to retain what I consider important job creation investments, primarily in education, but also in environmental protection, recreation and libraries.
This past Friday’s dismal jobs creation report reinforced my view that we have a current jobs crisis, not a budgetary crisis.
More importantly, Chatham has a serious, long term structural job crisis that it needs to address with economic development investments in infrastructure, education, and environment protection, among others. We have lost thousands of declining industry jobs in the last decade. The average wage for a Chatham worker was 173 dollars a week below the state average in 2009. By June
30, 2010, those wages in Siler City had declined by 46 more dollars per week. See http://www.bls.gov/ro4/qcewnc.pdf
The connection between this jobs crisis and our county budget was made clear by news articles on May 25 in the Raleigh News and Observer and the Charlotte Business Journal, summarizing the most recent annual report from the North Carolina Commissioner on Workforce Development. See http://www.bizjournals.com/charlotte/news/2011/05/25/nc-workers-need-to-adapt-to.html and http://www.newsobserver.com/2011/05/26/1226274/no-degree-no-job-thats-the-grim.html.
I paid particular attention to this as a member of the Triangle South Workforce Development Board, as well as a member of the Chatham County Economic Development Board.
“The recession has accelerated trends already well under way in this state, giving an overwhelming employment edge to educated workers in a technology-based economy,†said The Raleigh News and Observer stated in its summary. The report “… painted a dire picture for the legions of middle-class workers who for much of the 20th century formed the state’s economic backbone…†and it “warned that the traditional job that required no more than a basic high school education is fast disappearing in this state. Displaced workers who are not retrained will end up in low-wage jobs, if they can find employment at all. “
“Because an emerging knowledge-based economy uses skilled talent to create a competitive advantage, ‘emerging growth industries’ rely on workers who can demonstrate innovation and unique capabilities. These characteristics often derive from combining knowledge with creative instincts. For many low-skilled, dislocated workers, these skills may be beyond their reach without a
significant investment of time and resources in education and training,“ the Charlotte Business Journal’s article on this report concludes.
The key finding of this report directly addressed the importance of education as a critical investment for local job growth, as follows: “Seeking good-paying jobs, more workers must increase their skills by accessing and completing education beyond high school or by earning industry-recognized credentials. At least 42 percent, perhaps many more, of the new jobs being created in North Carolina will require at minimum some post-secondary education, many in Science, Technology, Engineering and Math – STEM – disciplines. This may represent an underestimate because businesses are increasingly opting to replace lower-skilled workers (lost through attrition and layoffs) with more highly educated or trained employees. An even higher share of new, higher-wage jobs will require STEM-related skills, and many of those jobs will require post-secondary education or industry-recognized credentials. In particular, STEM jobs will constitute an increasing share of higher and
medium-wage jobs, creating significant barriers to employment for unprepared young adults and existing workers. “ Access the report at: http://www.nccommerce.com/workforce/about-us/plans-policies-reports-initiatives/reports/2011-state-of-the-workforce-report.
Moreover, a study from the non partisan and non ideological Brookings Institute, entitled “Investing in the Future: An economic strategy for state or local governments in a period of tight budgets†provides as its principal recommendation: “Prioritize Investments For The Future. Investment should be prioritized and protected in government budgets. Infrastructure, education, health care, and environmental quality are critical to rising labor productivity, economic growth, and improved living standards. Cutting back on these critical fronts may help states balance their annual budget in the near term, but they threaten long-term prosperity.†See “Investing in the Future†, February 2011, at http://www.brookings.edu/~/media/Files/rc/papers/2011/02_state_budgets_greenstone_looney/02_state_budgets_greenstone_looney.pdf
Supporters of current board majority testified that the county was in excellent financial shape but that we needed save money now in case there is an “emergency in the future†or for when we have something better to spend it on. They seemed to have forgotten that back in December they said the top priority was jobs, jobs, jobs.
I am unaware of a theory of local economic development where reducing or eliminating investments in local schools, recreation, environment protection, libraries, etc. will help attract or create local high paying jobs now or in the future. If the current board believes they are relying on such a theory, I would ask that they inform the taxpayers and residents of Chatham about how it will work.
In my view, this “disinvestment strategy†to some extent repudiates the investment vision of the Chatham County Economic Development Strategic Plan, which states: “Chatham County’s strategic location between the Triad and Research Triangle regions positions it as the preferred location for emerging-growth companies.â€
(Emphasis added) As stated in both Workforce Development Commission and Brookings reports, the type of investments your budget cuts are exactly the type of investments that are needed to implement our current economic development vision for attracting high paying jobs with “emerging growth companies†to Chatham County.