Where can you find labor in the South?

By Michael Randle, Editor

At the 5th annual Southern Economic Development Roundtable at WaterColor, put on by SB&D in January, much of the discussion was centered on a new term, “the body gap.” We are familiar with the “skills gap.” Nowadays, it’s not so much about skills but about people. We are in a baby bust and have been for more than 15 years. Simply put, there are not enough young people to replace those leaving the workforce for retirement.

The “body gap” phrase was first used by Buckley Brinkman, the Executive Director and CEO of the Wisconsin Center for Manufacturing and Productivity. He recently wrote, “I keep reading about how we need to create more jobs in order to boost our economy. These stories miss the point that jobs are not the issue — workers are.”

So, our unemployment rate is still around 4 percent in the South, and a little above that for the U.S. You can’t find labor, right, skilled or unskilled? It’s a body gap. Here are three ideas to consider when searching for labor in the South, the third largest economy in the world and the hottest place on the planet for projects.

The first is to look at university markets. Large universities produce thousands of talented workers each year and a significant portion of those don’t move after graduation. Secondly, many markets in the South are magnets for migration from other states. Those would be markets in Texas like Dallas-Fort Worth and Austin; Atlanta; Charlotte; too many markets in Florida to mention; Nashville; Raleigh and Northern Virginia. People from all over the country move to these Southern metros, replenishing the labor force.

But if you look closely at project activity, deals have slowed in all of those metros over the past year. Sure, deals are still being announced in the South’s major markets, but not at the pace of 2010 to 2016. Why? Labor is not available in many of the South’s major markets. It’s simply a condition of full employment.

So, where else can you find labor for your job-generating project? What other tricks can you use at your disposal to find labor? Here is one trick that is as old as the hills in the South.

David Thornell, President of the Northwest Alabama EDA, says that while metros in the region are at full employment, counties below 50,000 in population in the South “remain essentially untapped in terms of stretching their workforce availability.”

Thornell represents three rural counties in Northwest Alabama. The three counties have a population of about 62,000, but over half of those counties’ employed adults commute out of their home county each day to their jobs. That’s a labor force in three small Alabama counties of more than 30,000 that’s essentially available. “They wouldn’t be filling jobs elsewhere that pay well enough to support the cost of their commute if we had enough jobs that match their aptitude and earning potential here,”
Thornell said.

“Bottom line is, a lower local population number shouldn’t automatically mean a lower level of consideration,” Thornell continued. And Thornell is right. Rural  communities in the South with large amounts of “outbound” labor is where you can find willing and able workers.

Hiring outbound labor is one of the oldest economic development tricks in the book here in the South. Yet, it really isn’t considered often until we reach full employment in the metros. Believe me, were are there.  J