Forget the skills gap; 
it’s the unskilled gap that’s scary

By Michael Randle

Efforts to curb immigration, screening immigrants by certain educational standards and increased deportations will be the biggest threat to the nation’s economy over the next five years. Note this; half of all the new jobs the government expects to be created over the next eight years will require only a high school diploma. Just about every economist you talk to says that unskilled immigrants are vital to the economy.

The new positions opening over the next eight years include low-paying jobs that most Americans simply will not take. They include an estimated 778,000 personal care aides, 580,000 food service workers, 431,000 home-health aides and millions of maids, construction laborers and farm workers. I can assure you, there is no farmer in America today who claims, “We don’t need any more Mexicans working on our farms.” They are all saying, “We need more Mexicans and now!”

Last year saw fertility at the lowest rate on record in the U.S. We are in a baby bust (have been since 2002); all the while the Baby Boomers are aging out of the workforce. For decades we could count on 175,000 to 225,000 people a month turning age 16 in this country (becoming work eligible). The last three years we have averaged 71,000 people a month turning 16. The unemployment rate is the lowest it’s been in 17 years. There are over 6 million jobs available in this country, and about 1.5 million people who are unemployed that are suited for full-time work regardless of their skill levels.

As for farm workers, we agree with U.S. Secretary of Agriculture Sonny Perdue, who said in February he would like to see a separate immigration program for agriculture workers. Perdue spoke at the annual USDA Agricultural Outlook Forum in February, saying that immigration farm labor is in the crossfire of the immigration debate. “The people who come to America to work on farms and ranches are not taking jobs from Americans,” Perdue said. “They are not the ones putting a burden on the criminal justice system or welfare system.”

In 2017, the Pew Research Center reported that the U.S. workforce will grow only if new immigrants are eligible to replace retiring Baby Boomers. Otherwise, the workforce will decline. Pew estimated that the U.S. working-age (25 to 64) population will rise by 10 million people by 2035 with legal immigration levels of at least 1 million per year, which has been the average for several years. Without immigration, Pew claims the workforce would shrink from 173 million today to 166 million. It would be reduced even further with mass deportations. The biggest source of increased labor supply is immigration, legal and illegal. You can make it political, but really, the issue is demography. It’s simple math.

 

SB&D’s pick for location of Amazon HQ2

After reviewing over 50 locations in the U.S. and Canada, SB&D has settled on its site for Amazon’s second headquarters, dubbed “HQ2,” a $5 billion, 40,000-plus employee project. We believe HQ2 will be built on a 26-acre undeveloped site near Dulles International Airport on the border of Fairfax and Loudoun counties in Northern Virginia. The site is near the new East Coast headquarters for its cloud service, Amazon Web Services. Amazon is also building its latest data center campus nearby, and the site is adjacent to a new Metro station. It’s also in the middle of Data Center Alley, where 70 percent of the world’s internet traffic flows on a daily basis. Amazon has about 30 data centers within a 15-minute car ride of the site.

Steelmakers restarting closed mills in the South

Steelmakers are reviving shuttered steel mills and even looking to build a new one as 25 percent across-the-board tariffs strengthen the domestic steel industry. Republic Steel and U.S. Steel both announced they would restart mills and bring steelworkers back to work. London-based Liberty House is reviving a steel mill that ArcelorMittal closed in South Carolina. And Nucor, the largest steelmaker headquartered in the United States, announced plans to buy a micro mill in Florida.

Cullman, Ala., ranked No. 1 in economic development projects

In the spring quarter, the Alabama Department of Commerce released its annual report on project activity in the state, and Cullman ranked No. 1 for projects with a total of 31. Cullman also ranked No. 1 in expansion projects for calendar year 2017.

South dominates Forbes’ best cities for jobs ranking

Forbes came out with its best cities for jobs ranking in the spring quarter and Dallas-Fort Worth ranked No. 1. Following DFW were Austin, Nashville, Charlotte, Orlando and Raleigh in the South. San Jose, San Francisco, Seattle and Riverside-San Bernardino all made the top 10 from outside the South.

Economists agree current expansion will break U.S. record

At 107 months, the current economic expansion is the second longest on record. To beat the record expansion of 1991 to 2001, this one would have to go uninterrupted until August 2019. As of June, a consensus of over 50 top economic forecasters anticipate growth of 2.8 percent this year, followed by 2.6 percent in 2019. However, they also noted that a trade war between the U.S. and China could reduce that growth, but not to the point of recession. The economists also noted that if President Trump is impeached in 2018, the U.S. economy will continue to grow through 2019. The International Monetary Fund also paints a bright future for the U.S. economy this year, predicting growth of 2.9 percent. However, it reported in the spring quarter that a trade war “threatens to undermine confidence and derail global growth prematurely.”

Nashville and Austin at top of nation’s job growth

Nashville and Austin were two of the nation’s top three job growth markets in the U.S. last year. In terms of overall job growth, Nashville ranked third among all markets of 1 million or more residents, and Austin ranked second. Riverside-San Bernardino ranked No. 1.

Texas’ economy grew the fastest, but it’s still not like 2014

After a few contractions in 2015 and 2016 as a result of the oil bust, Texas’ economy grew the fastest among all states in the fourth quarter of 2017. According to the U.S. Department of Commerce, the Lone Star State’s economy grew at a 5.2 percent seasonally adjusted annual rate in the fourth quarter, mainly because of output gains from oil and gas mining. Yet, that rate, while it led all states, is about half the growth Texas saw in the third quarter of 2014 when the state grew at a 10 percent rate.

Chief Executive ranks Texas best for business

In the spring quarter, Texas was named the No. 1 state for business by Chief Executive magazine. Following Texas were Florida, North Carolina, South Carolina and Indiana. From the South, Tennessee and Georgia made the top 10. The worst states for business were California, New York, Illinois, New Jersey and Connecticut.

Office leasing market is slowing

Dallas-Fort Worth is the hottest deal-making market in the country, as evidenced by the Big D’s 300 points earned in this year’s SB&D 100. That’s the most points earned by any market in the 25-year history of the SB&D 100. But office leasing in Dallas-Fort Worth is slowing. While pre-leasing activity appears healthy with 69 percent of the space under construction already leased in the first quarter, single-tenant, build-to-suit projects are only 35 percent pre-leased. According to JLL, nationwide office net leasing in the first quarter was at its slowest annual rate since 2010.

Chattanooga leads a slew of Southern cities with the lowest startup costs

SmartAsset.com came out with its annual list of the cities in the U.S. with the lowest startup costs. The site looked at cost of labor, office space and energy costs among other cost factors. Topping the list with the lowest startup costs was Chattanooga, followed by Knoxville; Greensboro, N.C.; Wichita; Little Rock; Columbia, S.C.; Memphis; Lexington, Ky.; New Orleans and Louisville.

Exxon planning multibillion-dollar Gulf Coast expansion

ExxonMobil is considering a multibillion-dollar expansion plan that would double U.S. oil refining capacity along the Gulf Coast, a move that could boost refining capacity at its Baton Rouge refinery. The plan would make the oil giant’s Beaumont, Texas refinery the nation’s largest by capacity when the work is complete in the next decade. The plan comes amid increasing domestic shale oil production, particularly in Texas.

Southern Company selling Florida assets

Atlanta-based Southern Company, parent of Georgia Power, Alabama Power and Mississippi Power among other utility assets, is selling Gulf Power, Florida City Gas and its share of two natural gas power plants. The buyer, NextEra Energy, will pay $6.48 billion for the assets.

National Association of Homebuilders says steep tariffs on Canadian lumber are killing construction industry

The National Association of Homebuilders (NAHB) is unhappy with President Donald Trump’s tariffs on Canadian lumber. NAHB CEO Jerry Howard says the tariffs are “ludicrous” in a story from Fox Business. “It’s ludicrous that a neighboring country like Canada is not being able to import into our country,” Howard said. “We are importing lumber from Russia to build our American homes — it doesn’t make sense.” The Trump administration announced tariffs on Canadian lumber last year, which has raised the price of lumber by 60 percent in two years.

Tariffs causing bottlenecks at U.S. manufacturing plants

Surging demand and the Trump administration’s tariffs on imported metals are causing system-wide bottlenecks, according to the Institute for Supply Management’s April survey. Despite increased orders, production slowed down as supplier’s delivery times lengthened. According to the report, U.S. factories wait on average 67 days for materials, the longest period in decades.

Metal manufacturers’ coalition protests steel and aluminum tariffs

In the spring quarter, the Coalition of American Metal Manufacturers protested President Donald Trump’s steel and aluminum tariffs imposed in March. Under the banner “Tariffs are Taxes,” coalition spokesperson Paul Nathanson said, “These tariffs will do nothing to uphold their stated purpose of protecting U.S. national security. They will instead hurt U.S. manufacturers in the near term by raising the price of essential inputs they need to make finished products, and do long-term harm to domestic steel producers by eroding their own customer base.”

Triumph Gulf Coast awards grants in Northwest Florida

Triumph Gulf Coast, a seven-member, unpaid board established by the Florida Legislature to make awards that will promote the economy of the eight Gulf Coast counties affected by the BP oil spill, has awarded its first grants out of a pool of an expected $1.5 billion. The first grant will provide $10 million to the Port of Panama City for a major expansion at the port.

These states in the South saw record low unemployment

Kentucky (4.0), Mississippi (4.5), Alabama (3.7) and Arkansas (3.6) saw record low unemployment rates in the past year. There are an unprecedented 6.6 million jobs available as of May in this country.

Austin named best place to live

For the second straight year, U.S. News & World Report named Austin as the best place to live in the U.S. Other cities in the South making the ranking’s top 10 were Fayetteville, Ark.; Huntsville, Ala.; and Washington, D.C. Colorado Springs, Denver, Des Moines, Portland, Minneapolis and Seattle made up the rest of the top 10.

Tennessee adding jobs at 1.5 times the U.S. rate

Tennessee employers added 69,700 jobs from March of 2017 to March of this year. That figure is 1.5 times the rate of the rest of the country.

Energy industry in Louisiana pays out $4.3 billion in wages

Despite the oil bust in recent years, Louisiana’s energy industry remains a formidable economic force. Last year, oil and gas production in Louisiana — including mining, refining and pipeline operations — employed nearly 45,000 people with a payroll of $4.3 billion.

U.S. natural gas saw record production in 2017

U.S. natural gas production topped all previous years in 2017, according to the U.S. Department of Energy. Gross mined withdrawals totaled 90.9 billion cubic feet per day. The record year substantially boosted exports of LNG.

Coal dead? Not here.

In the spring quarter, Warrior Met Coal opened a new $19 million portal facility at its No. 7 coal mine in Brookwood, Ala. The portal is now being worked by 350 hourly miners and 150 salaried employees. Warrior Met has hired more than 1,000 workers in the area in 18 months.

One in 11 Georgia jobs tied to ports

A recent study by the University of Georgia’s Terry College of Business showed that Georgia’s deepwater ports are one of the state’s “strongest economic engines.” According to the study, the ports in Brunswick and Savannah in 2017 supported over 439,000 jobs, or one out of 11 jobs in the state.

Fayetteville, N.C., named “most innovative city”

Fayetteville, home to Fort Bragg, the largest military base in the world based on population, has been named the nation’s most innovative city by Governing in collaboration with the nonprofit Living Cities. The second annual Equipt to Innovate report, released in the spring quarter, assesses municipal governments based on several metrics, including citizen engagement, racial equity, data use and strategic planning. Other Southern cities in the report include Louisville and San Antonio.

Alabama industrial site earns certification

A 735-acre site in Lowndes and Montgomery counties has earned AdvantageSite designation by the Economic Development Partnership of Alabama. The site, located just south of Montgomery in Hope Hull, includes proper zoning, accessibility and is served by all utilities.

Chemical industry in Louisiana is huge

According to economist Loren Scott, Louisiana’s chemical industry accounted for $79.7 billion in annual sales in 2017 and $15.7 billion in wages. Two out of every seven jobs created in Louisiana were supported by the chemical industry.