2015 Garner Economics, LLC This presentation can not be reproduced without the expressed consent, written or verbal, of Garner Economics. Are Continuing We On The Charles Same County s Page? A look Momentum at Virginia s Competiveness with a Strategic Economic Development Plan A presentation for the Virginia Economic Developers Association (Annotated and edited for distribution with permission by Garner Economics LLC) Jay Garner, President December 2, 2015
Who We Are Garner Economics provides creative, strategic and executable value to companies, communities and organizations globally. We are specialists as corporate site location advisors and economic development strategists. 2
1. Which state has a private sector union membership rate of 2.7%? A. VA B. NC C. SC D. GA 3
2. VA s tech workforce as a % of private worker s in 2014 was? A. 5.2% B. 9.4% C. 10.5% D. 18.2% 4
3. Which state had 16,312 science and engineering graduate students in 2013? A. VA B. NC C. SC D. GA 5
4. VA s average per pupil expenditure in public schools is? A. $10,655 B. $8,159 C. $15,275 D. $8,875 6
Jobs But Don t Forget Self-Employment 7
Jobs US Top 10 Employment Occupations Employment & wages for largest U.S. occupations Occupation US Employment 2012 Annual Mean Wage Retail salesperson 4,340,000 $25,310 Cashier 3,314,010 $20,370 Food prep worker 2,943,810 $18,720 Office clerk 2,808,100 $29,270 Registered nurse 2,633,980 $67,930 Waiter 2,332,020 $20,710 Roughly 58 percent of jobs created since the Great Recession ended have been lower wage jobs. Customer service representative 2,299,750 $33,110 Laborer 2,143,940 $26,410 Janitor/cleaner 2,097,380 $24,850 Secretary/administrative assistant 2,085,680 $33,560 Source: BLS 8
Jobs Where s Virginia? $1 million or more in investment; 50 or more new jobs; or 20,000SF or more* State Total Projects 2014* 1. Texas 689 2. Ohio 582 3. Illinois 394 4. North Carolina 313 5. Georgia 311 6. Kentucky 258 7. Michigan 230 8. Pennsylvania 227 9. Louisiana 200 10. Tennessee 195 11. Virginia 189 Source: Conway Data Site Selection Magazine, 2015 9
Workforce, Workforce and Workforce!!! 10
2015 Workforce Skills and Talent Survey Key themes Skills and talent availability are critical to the site selection decision Skill and talent shortages are global (and local), but there are significant perceived differences in the skills gap globally Skilled crafts and STEM have the greatest shortages Process manufacturing and technical manufacturing more affected (so called Advanced Manufacturing) Community / technical college and apprenticeship programs can set regions apart in the short-term Addressing long-term structural gaps starts in the primary education system 11
Measuring the Regional Labor Pool is Not Enough County Total Employed* Total Unemployed Clay County, Alabama 3,766 338 Coosa County, Alabama 1,286 310 Elmore County, Alabama 18,625 1,7161 Lee County, Alabama 54,643 993 Macon County, Alabama 5,007 647 Randolph County, Alabama 4,631 600 Russell County, Alabama 13,461 1,468 Tallapoosa County, Alabama 13,072 1,233 Carroll County, Georgia 38,662 3,797 Coweta County, Georgia 35,032 3,785 Harris County, Georgia 4,190 1,004 Heard County, Georgia 2,006 368 Meriwether County, Georgia 4,117 858 Muscogee County, Georgia 94,412 6,519 Troup County, Georgia 38,256 2,794 Total 331,166 41,875 Counties within Forty-Five Minutes 12
What is a Worker Skill? Developed capacity to perform a certain work activity Defined by Occupational Information Network (O*NET) O*NET measures the importance of 25 individual skills for each occupation relative to the performance of that occupation 13
Major Worker Skill Groups Skill Group Complex Problem Solving Resource Management Social Systems Technical Definition Developed capacities used to solve novel, illdefined problems in complex, real-world settings. Developed capacities used to allocate resources efficiently. Developed capacities used to work with people to achieve goals. Developed capacities used to understand, monitor, and improve sociotechnical systems. Developed capacities used to design, set-up, operate, and correct malfunctions involving application of machines or technological systems. Source: Occupational Information Network (O*NET) 14
Workforce Skills by Local Strength for XXX County Skill Group Complex Problem Solving Skills Individual Skills Degree of Local Strength Workers* Complex Problem Solving 0.80 1,737 Resource Management Skills Management of Financial Resources 0.99 4,567 Management of Personnel Resources 0.85 3,394 Time Management 0.89 4,287 Social Skills Coordination 0.82 4,245 Instructing 0.82 2,883 Systems Skills Judgment and Decision Making 0.87 2,856 Systems Evaluation 0.80 2,351 Technical Skills Equipment Maintenance 1.44 3,123 Operations Analysis 0.92 3,181 Programming 0.90 2,453 Quality Control Analysis 1.51 3,284 Repairing 1.45 3,332 Technology Design 1.05 3,144 Troubleshooting 1.32 4,182 *Workers may be highly skilled in multiple areas. Source: Garner Economics, Occupational Information Network (O*NET) 15
Workforce Knowledge Workforce knowledge refers to the acquisition of principles and facts related to a general field of business. A worker s experiences play a greater role in workforce knowledge than in workforce skills. 16
Workforce Knowledge by Local Strength for XXX County Knowledge Group Engineering & Technology Individual Knowledge Area Building and Construction Computers and Electronics Degree of Local Strength Workers* 1.30 3,542 0.87 3,378 Design 1.33 3,363 Engineering and Technology 1.28 3,305 Mechanical 1.45 4,591 *Workers may have high knowledge in multiple areas. Source: Garner Economics, Occupational Information Network (O*NET) 17
How Well Does Virginia Compete? 18
2015 State Business Tax Climate Index Ranks North Carolina Virginia Overall 16 27 Corporate 25 6 Individual Income 15 39 Sales Tax 33 6 U.I. Tax 11 37 Property Tax 29 26 Source: Tax Foundation, 2015 State Tax Climate Index 19
Effective Tax Rates Ranks by Firm Type Model Firm Type North Carolina Virginia Corporate HQ 5 12 R&D HQ 16 35 Retail Store 5 16 Capital-Intensive Manufacturing Labor-Intensive Manufacturing 17 20 19 2 Call Center 12 21 Distribution Center 8 15 Source: Tax Foundation, Location Matters 2015 20
Effective Tax Rates for Mature Firms Model Firm Type North Carolina Virginia Corporate HQ 10.4% 12.0% R&D HQ 8.9% 13.5% Retail Store 11.9% 14.1% Capital-Intensive Manufacturing Labor-Intensive Manufacturing 8.9% 9.3% 7.3% 4.3% Call Center 15.7% 18.1% Distribution Center 19.9% 22.1% Source: Tax Foundation, Location Matters 2015 21
Effective Tax Rates for New Firms Model Firm Type North Carolina Virginia Corporate HQ 6.9% 16.4% R&D HQ 10.7% 18.8% Retail Store 23.6% 30.7% Capital-Intensive Manufacturing Labor-Intensive Manufacturing 10.2% 23.8% 6.5% 11.4% Call Center 22.4% 26.9% Distribution Center 24.9% 35.2% Source: Tax Foundation, Location Matters 2015 22
Annual Percentage Change Population Growth 2.5% 2.0% Population 2005 2014 10-Year Growth Virginia 7,577,114 8,326,289 9.9% North Carolina 8,705,415 9,943,964 14.2% U.S. 295,516,599 318,857,056 7.9% 1.5% 1.0% 0.5% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Virginia North Carolina United States Source: US Census Bureau - 2014, Garner Economics 23
Annual Change in Dollars Five-Year Net Change in Average Weekly Wage (Inflation Adjusted) $15 $10 $5 $0 -$5 -$10 -$15 -$20 -$25 Virginia North Carolina -$30 2009 2010 2011 2012 2013 2014 U.S. 2010 $1,037 $856 $976 2011 $1,025 $852 $972 2012 $1,002 $855 $977 2013 $1,014 $856 $974 2014 $1,018 $865 $988 5-Year Change ($19) $9 $12 Virginia North Carolina U.S. Source: U.S. Bureau of Labor Statistics - 2014, Garner Economics 24
Top Industry Sectors Government Health Care & Social Assistance Retail Trade Professional, Scientific, & Technical Services Accommodation & Food Services Administrative & Support & Waste Management & Remediation Services Top Industry Construction Sectors Manufacturing Other Services (except Public Administration) Finance & Insurance 0% 3% 6% 9% 12% 15% 18% 21% Percentage of Total Workforce Virginia North Carolina United States Source: EMSI - 2015, Garner Economics 25
Top Occupation Sectors Office & Administrative Support Sales & Related Food Preparation & Serving Related Business & Financial Operations Education, Training, & Library Transportation & Material Moving Healthcare Practitioners & Technical Management Computer & Mathematical Construction & Extraction 0% 2% 4% 6% 8% 10% 12% 14% 16% Percentage of Total Workforce Virginia North Carolina United States Source: EMSI - 2015, Garner Economics 26
Average Annual Earnings by Industry Utilities Management of Companies & Enterprises Professional, Scientific, & Technical Services Information Finance & Insurance Wholesale Trade Mining, Quarrying, & Oil & Gas Extraction Government Manufacturing Transportation & Warehousing Health Care & Social Assistance Construction Real Estate & Rental & Leasing Unclassified Industry Educational Services Administrative & Support & Waste Management & Remediation Services Other Services (except Public Administration) Retail Trade Crop & Animal Production Arts, Entertainment, & Recreation Accommodation & Food Services Average Annual Earnings Virginia $61,109 North Carolina $51,802 United States $59,240 $0 $20 $40 $60 $80 $100 $120 $140 Annual Average Earnings in Thousands Source: EMSI - 2015, Garner Economics 27
Percentage of Total Labor Force 16+ Years of Age Labor Force Participation 100% 80% 33.9% 37.6% 36.7% 60% 6.1% 8.3% 7.2% 40% Not in labor force Unemployed Employed 60.6% 56.3% 58.4% 20% 0% Virginia North Carolina United States Source: US Census Bureau - 2014, Garner Economics 28
2006-2015 Percentage Change Technology Workers 16% 14% 12% 10% 2015 STEM* Jobs Median Hourly Earnings Virginia 307,673 $42.20 North Carolina 221,999 $34.58 United States 7,855,496 $36.68 *Science, Technology, Engineering & Math 8% 6% +27,437 STEM Jobs 4% +614,768 STEM Jobs 2% +15,981 STEM Jobs 0% Virginia North Carolina United States Source: EMSI 2015 STEM Occupations, Garner Economics 29
Technology Workers by Industry Virginia 40.7% 20.0% 15.9% 15.7% 7.7% North Carolina 23.9% 11.6% 21.6% 24.3% 18.6% United States 24.0% 16.7% 24.3% 22.5% 12.4% Computer Systems Design Services Federal Government, Civilian, Excluding Postal Service Engineering Services Custom Computer Programming Services Corporate, Subsidiary, and Regional Managing Offices Source: EMSI 2015 STEM Occupations, Garner Economics 30
Location Quotients - US = 1.0 Technology Occupations, Location Quotients 2.0 1.8 1.6 Virginia North Carolina 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Mathematical Science Occupations Computer Occupations Social Scientists & Related Workers Engineers Physical Scientists Drafters, Engineering Technicians, & Mapping Technicians Life, Physical, & Social Science Technicians Life Scientists Source: EMSI 2015 STEM Occupations, Garner Economics 31
Educational Attainment Less Than 9th Grade 9th Grade to 12th Grade Virginia North United Carolina States Less Than 9th Grade 4.8% 5.0% 5.6% 9th Grade to 12th Grade 6.7% 8.5% 7.5% High School Diploma 24.6% 26.6% 27.7% Some College 19.9% 21.9% 21.0% Associate's Degree 7.3% 9.2% 8.2% Bachelor's Degree 20.9% 18.6% 18.7% Graduate Degree and Higher 15.9% 10.1% 11.4% High School Diploma Some College Associate's Degree Bachelor's Degree Graduate Degree and Higher 0% 5% 10% 15% 20% 25% 30% Virginia North Carolina United States Source: US Census Bureau 2014 (Population 25 years and over), Garner Economics 32
Let s have a discussion. jay@garnereconomics.com 770-716-9544 Twitter: @jaygarner1