Quality Jobs, Value Added, and Sustainability

People have come to agree that it's not the number of jobs; it's the quality of jobs that [is] the issue. At one time, a lot of rural areas would have disagreed and said that we need jobs and almost any new job is going to be positive for the local economy. But now there's general consensus that the primary focus is not just jobs, but the kind of jobs. Will they stay competitive? Are they going to provide training and investment opportunities? And do they raise wages and incomes in the state?

Worldwide restructuring of businesses has fragmented the U.S. labor force more than ever before. In their drive to improve profits, companies moved hundreds of thousands of jobs overseas, abandoning communities and consigning unskilled workers to unemployment and welfare. Once, states could be complacent about policies to create jobs, any kind of jobs. Now, many states are more selective in recruitment, while pushing work-force development.

Changes in recruiting and worker training might have happened without global restructuring. There is evidence that the old way of jobs creation never worked that well. For example, Kentucky's per-capita income as a percent of the U.S. has been consistent since 1969, despite a major jobs-creation effort. Some rural areas, especially in Appalachia, may be worse off than 30 years ago. The state appears to have kept up with the rest of the country only because of increased government transfer payments, especially to distressed mountain counties.

Labor markets in distressed counties seem to have common threads, such as entrenched poverty, low education levels, and few job opportunities. Natural-resource industries (mining and timber, especially, which are subject to boom-and-bust cycles) tend to dominate their economies. Workers extract the product, but add little value to it. If there are manufacturing jobs, they tend to be low-skill, low-wage positions. Workers add little value to the product. The industries often are considered "obsolete." There is little or no potential for growth, and owners can move on fairly easily. Distressed communities are vulnerable to fluctuating natural-resources markets and competition from overseas workers with lower wages.

States with a high percentage of low-skill workers face a hard bottom line. They can no longer afford growing welfare roles, and they face global competition for low-skill jobs. Because they have such a high percentage of low-skilled workers, they are not well-positioned to attract growing, higher value-added manufacturing and technology-based industries. Their incentives for these businesses are less effective because of a skilled labor shortage. The hard bottom line demands that states reallocate their resources into worker training and education. The reallocation needs to begin with the public schools but to extend to higher education and work-force training.

Education to help workers create wealth for themselves and their communities should be a cornerstone of Appalachian development policy. Students of all ages need to be taught to learn how to learn, to be flexible and creative, and to take initiative. They should be encouraged to start businesses that add value either through products produced or through hiring new employees. A low-skilled labor force attracts low-skill jobs. Employers of low-skilled workers have little interest in supporting community activities. While work-force development is no panacea, it offers the best hope for building sustainable communities with a viable economic base.