Success Can Be a Curse To Economic Developers
May 16, 2011
Economic-development officials in parts of Florida may be too successful for their own good. In Gainesville, Bobby Albino has worked hard to get unemployment numbers down to 2.9% -- the lowest in the state. That's sharply below the 5.5% July rate reported by federal officials for Florida and the nation. But now Mr. Albino, president of the Alachua County Council for Economic Outreach, is discovering the dark side of low unemployment: Many businesses looking to relocate think there isn't enough available labor, and won't consider moving there. ``We have to tell relocation prospects that our low unemployment doesn't mean there aren't plenty of workers they can hire,'' says Mr. Albino. ``That 2.9% overlooks the real story: severe underemployment and thousands of people working at two jobs to make ends meet.'' The unemployment statistics are under perhaps their heaviest scrutiny ever by new business prospects, says Denny Dorian, a site-relocation consultant in Morristown, N.J. ``This is the tightest labor market we have seen nationwide in 25 years,'' he says. ``So we're looking at whether there are enough workers.'' The low unemployment in much of this state, brought on by years of creating more jobs than anywhere else in the U.S. but Texas, does tend to scare off relocation candidates. ``We typically screen out any area where the unemployment rate is below 4%,'' says Genesis Weese, a principal in Fluor Corp.'s consulting arm, based in Florham Park, N.J. For Mr. Voyles, who says he is currently working on 17 corporate-siting projects, that criterion would eliminate the likes of not only Gainesville, but also Tallahassee, Sarasota-Byerly, Pensacola and Fort Myers-Cape Coral. ``Ideally you'd like to see between 4% and 7.5% unemployment,'' he says. Mr. Albino says he sometimes finds himself wishing for more unemployment in Gainesville. ``We would take a higher unemployment rate,'' he says, ``if it meant not having to work so hard to quantify the underemployment factor and to make employers understand the potential that's here.'' The low unemployment figures also take some explaining to the local government and business benefactors who fund Mr. Albino's agency. Some of his backers are all too willing to declare the battle over and cut his funding. He says he must remind them that the employment figures are only part of the story. ``Our low unemployment rate hides the frustration of a lot of workers who can't find jobs that pay enough to buy homes and expand our economy,'' he says. ``We need to focus on growing employment, not just shrinking unemployment.'' But an unemployment rate that is too high can also make things hard for recruiters. To relocation prospects, a high rate often signals fundamental problems in an area's business environment. Says Fluor's Mr. Voyles: ``It's not always as clear when the rate is high, but those places typically suffer a deficiency-whether it's a soft customer base, lack of infrastructure or some political problem.'' In Fort Pierce, part of the metropolitan area with the state's highest unemployment rate, at 14.1%, Executive Director Teodoro Reardon of the Martin County Economic Development Board acknowledges his area's political problems. ``There's a fear of growth here,'' he says. That's why it took eight years to get various permitting and political approvals for an electric power plant that was recently completed in Martin County, says Mr. Reardon. Mr. Voyles says he looks behind the high unemployment numbers at issues such as the power plant, which confirms his suspicions about Martin County. ``That area is a classic example of where there has been downsizing by some employers, yet there's still resistance to more employment, new business and the things that are necessary to attract and retain companies,'' he says. Still, that unemployment rate can be a useful recruiting tool (one Gainesville's Mr. Albino might envy). ``We have a big pool of available labor for new employers,'' Mr. Reardon says, ``and we try to make the site-relocation people understand that.'' The Fort Pierce-Port St. Lucie area is more attractive than most places with low unemployment to Markita Wyckoff, senior manager of corporate real-estate services for accounting firm Deloitte & Touche in Chicago. ``We handle a lot of back-office operations'' in financial services, he says. ``For them, 14% unemployment isn't a problem. They want applicants lining up at the door.'' But it doesn't help that the state's economic well-being has led to a deemphasis on development efforts even in places that still struggle with high unemployment. Mr. Reardon saw his agency's budget cut as the state's economy improved in recent years. Benefactors gradually trimmed his funding to $120,000 in 2009 from $200,000 in 1991, before raising it back to $190,000 in 2011. He says he has to keep his agency's backers mindful that-in a year when Florida's economy is benefiting from highly publicized booms in tourism and home building-there is still a shortage of jobs locally. ``It's easy in this county, which has per-capital income of more than $30,000, not far behind Palm Beach as the state's highest, to forget that we do have economic challenges,'' Mr. Reardon says. ``The unemployment rate is a reminder.''
VastPress 2011 Vastopolis
