Around the South - Fall 2021

Retirees are “unretiring,” and that’s good for the labor market

The “unretirement” rate, which measures those who switch from retirement to employment, has been accelerating, according to an analysis by Nick Bunker, an economist at Indeed. At a time when employers cannot fill available jobs, people reentering the job market is positive news. Early retirements increased during the pandemic in 2020 and 2021. It may be just a matter of time before data shows that these workers are rejoining the workforce 

Early retirements among older Americans were among the many labor distortions related to the COVID-19 pandemic, according to economists, as health risks and other factors led many to leave their jobs.

But there’s an open question: Are these retirements permanent, or will these workers rejoin the labor force? U.S. Bureau of Labor Statistics data has shown that the October 2021 unretirement rate was 2.6 percent.

No end in sight for lack of labor

In the last three years, about 10,000 people a day on average retired in the U.S. Compare that to a little over 2,000 joining the workforce by turning working age (16), and you can easily see where the labor issues are. People are aging out of the workforce faster than the rate of people entering it. 

But the U.S. should not feel like the Lone Ranger. People are aging out of the workplace virtually around the world. In fact, for most countries — especially the U.S. — “job creation” is no longer the most important factor for an economy. Particularly in the South, the region that has seen the toughest time since the Great Depression, job creation has been paramount. But that is no longer the case. In some years, the South creates as many new jobs as the other three regions combined. 

We are now entering an era when politicians stumping for office should literally slow the promotion of job creation and instead figure out how they are going to fill those jobs. There are well over 10 million jobs available in this country as of October and only 8.4 million people looking for work. 

Also affecting the labor market in the U.S. — 15 percent of the population was retired in 2010. In 2020, that figure rose to 20 percent. 

So, what to do? Millions of economists say “not much.” The U.S. can increase legal immigration, which could result in reversing the trend, but for how long? Also, increasing legal immigration under President Trump was a very divisive issue. During his last year in office, legal immigration — we are talking about working visas — dropped by 85 percent from over 1 million to 200,000. 

Then again, a more productive workforce with the aid of automation and AI could help, too. 

In November 1965, Disney officially announced its plans to build an entertainment venue in Central Florida.Did one Northwest Florida man cost the region Disney World?

In a fall article published by the Northwest Florida Daily News, that question was asked in the headline. The man’s name is Ed Ball, who was the CEO of St. Joe Paper Company, which to this day owns a lot of land in North Florida (nothing like the amount it owned in the 1960s). Walt Disney, the story goes, wanted to develop nearly 30,000 acres of land near Panama City. He paid Ball a visit and some said the St. Joe executive kept Mr. Disney waiting outside his office for hours. According to former St. Joe CEO Peter Rummel, at the end of the day, Ball’s secretary simply handed Disney a note that read, “We don’t deal with carnival people.”

JPMorgan: Full global economic recovery in 2022

JPMorgan Chase is predicting 2022 will be the first year in nearly three years that will see a return to normalcy regarding the worldwide economy. The return to normalcy, according to the company, “is warranted by achieving broad population immunity and with the help of human ingenuity, such as new therapeutics expected to be broadly available in 2022.” The U.S.’s largest bank also predicts that there will be a strong recovery in 2022 based on robust spending by consumers and businesses. 

Demand for workers hits historic high in fall 2021

Businesses posted 11 million job openings in October, the Labor Department reported in the fall quarter. That is the highest number of job openings ever. 

Reshoring on track for record job migration to U.S.

According to the Reshoring Initiative, the U.S. (as of October) is on track to add a total of nearly 250,000 jobs from abroad in 2021. The data includes foreign direct investment — which was down dramatically in 2020 — so the “reshoring” data is skewed. Foreign direct investment, for the most part, has no relationship with reshoring. However, using the Reshoring Initiative’s data, the projected jobs created in 2021 is 38 percent more than 2020, when 161,000 jobs were created either by reshoring or FDI. 

Renewable energy just about quadrupled over the last 10 years

The Environment America Research and Policy Center announced in the fall that energy sources from solar and wind nearly quadrupled from 2011 to 2020 in the U.S. The report found that at the current growth rate, wind, solar and geothermal will meet current electricity demand levels by 2035. 

Dallas-Fort Worth leads all markets in pay gains

In some cases, we have seen wages increase more than they have in decades, and Dallas-Fort Worth leads all markets in that department by a wide margin. The North Texas market also leads in job growth and in-migration among the nation’s largest metros. Average weekly earning in North Texas rose 8.3 percent from October 2020 to October 2021, and 17 percent since October 2019, far higher than the state as a whole and the nation, and more than double the two-year gains in Austin, Houston and San Antonio.

U.S. automakers beg Biden administration to waive tariffs on components from China

All domestic and foreign automotive OEMs and suppliers have pleaded with the Biden administration to lift tariffs on a wide range of components from China, especially those for electric-car batteries. Many of the components are not made anywhere but China. One of those products is artificial or natural graphite. Big suppliers with plants in the South, such as Magna and SK Innovation, are asking for respite from tariffs on all the myriad switches, sensors, motors and other parts that go into a vehicle. 

Developed nations to use tariffs to tackle climate change? 

Governments in developed nations, including the U.S. and those in Europe, are discussing ways to use tariffs on trade to cut carbon emissions. Policy makers are looking at tariffs on steel, cement and chemicals. In November, the Biden administration announced tariffs with the European Union to jointly curb imports of steel and other products that generate high levels of carbon emissions. An estimated one-quarter of global greenhouse gases are produced by goods that cross borders, according to a 2018 report by economic and environmental consulting firms KGM & Associates and Global Efficiency Intelligence LLC.

Furniture makers in the South are thriving

It wasn’t too long ago — about 40 years — that the South saw its base industries (furniture, textiles and apparel) collapsing. Then, around 2010, the word “reshoring” was coined for the phenomenon that seemed to be a result of rising wages and operating costs in Asia. Since then, the “base” industry sectors have grown steadily in the American South. Unfortunately, a receding workforce and difficulties importing parts from overseas are a problem. For now, though, companies in Mississippi and North Carolina — two of America’s largest furniture manufacturing states — are seeing huge upswings thanks to strong demand and limited supply.

Energy shortage has China binging on LNG from the South

At the height of the trade war in 2019, China essentially ended the import of U.S. liquefied natural gas. While it had every right to resist the U.S. tariffs, China cannot live on its own energy production. But without the United States’ help — especially with much needed energy sources such as U.S.-mined and modified liquefied natural gas — the environment of China (the world’s largest user of dirty fuels) will be a disaster. China’s energy shortage will not be solved any time soon; therefore the U.S. will remain its largest energy trading partner for now mostly through LNG exports from Louisiana and Texas.

LNG exports from Southwest Louisiana continue to be the main and most important bridge fuel that burns far cleaner than coal for developed countries in the world.Speaking of LNG...

Southwest Louisiana, in and around the Lake Charles region, has changed and changed forever. Over the last decade, Southwest Louisiana has led the nation almost every year in net job growth. Billions have been spent on facilities that export LNG throughout the world. The pipelines in and around the Houston and New Orleans areas have been there for decades because that is where most refineries were built to support World War II. Everything has changed in Southwest Louisiana as LNG exports from that region continue to be the main and most important bridge fuel that burns far cleaner than coal for developed countries in the world. 

Entergy replacing aging natural gas plants in Mississippi

Louisiana-based Entergy is replacing some aging natural gas plants in the state of Mississippi with 1GW of renewable energy over the next five years. The renewable power would, as a percentage of Entergy, represent 17 percent of the total power generation. Currently it sits at 1 percent. 

Amid the computer chip shortage crisis, two big deals are announced in Texas

The computer chip shortage continues as outdated chips (some as old as 10 years) are being used to supply the market. Two big deals announced in Texas this fall will eventually come to the economy’s rescue. Texas Instruments announced it plans to invest up to $30 billion to build as many as four new semiconductor fabrication plants in Sherman, Texas. TI said it will begin construction in 2022 on the first two plants producing its 300-millimeter wafers used in everything from cars and trucks to industrial machinery. The plants could house up to 3,000 workers when complete. The other big semiconductor facility is by South Korea chip manufacturer Samsung Electronics. It will build a second chip facility in the Austin area in Taylor, Texas. 

Gov. Henry McMaster proposes $500 million investment in rural infrastructure in South Carolina

Governor McMaster was joined by state leaders to make a major rural infrastructure proposal that would provide $500 million in American Rescue Plan (ARPA) funds to revitalize South Carolina’s water, wastewater and storm-water infrastructure. The proposal would modernize rural water systems statewide, providing safe drinking water and the infrastructure needed for economic development in rural communities.

Satellite manufacturing company Terran Orbital is bringing a massive factory to the Space Coast that will create 2,100 high-paying jobs.Largest satellite facility in the world to be constructed at Florida’s Space Coast

Terran Orbital announced in the fall that it will invest $300 million in Merritt Island on Florida’s Space Coast. Florida Governor Ron DeSantis said the company’s move to Florida will create the largest satellite manufacturing facility in the entire world. The 660,000-square-foot facility will be able to produce more than 1,000 satellites a year and 1 million satellite components. The deal will create 2,000 jobs. 

More money sent to states from BP oil spill fund

In the fall, the National Fish and Wildlife Foundation announced that Alabama, Florida and Mississippi are receiving more than $103 million in BP oil spill settlement money for new and continued coastal projects. The money will be used to protect and restore species and habitats. The foundation’s Gulf Environmental Benefit Fund brings its total allocations across the five Gulf states to $1.6 billion.

New Orleans to Baton Rouge industrial corridor has several locations that are hot spots for cancer risks

According to ProPublica, the 85-mile chemical corridor between Baton Rouge and New Orleans, an 85-mile-long region that environmental advocates have long called Cancer Alley, contains several hot spots where cancer risks are far above levels deemed acceptable by the U.S. The corridor is the largest hot spot for cancer-causing air in the country, followed by two areas in Texas.

Whoa! ExxonMobil will help turn 50-mile-long Houston Ship Channel into carbon capture and storage facility

Oil and gas giant ExxonMobil suggested this fall it could turn one of the largest climate-harming emissions areas in the world into a “carbon capture and storage” (CCS) area. The Houston Ship Channel is home to petrochemical plants, refineries, power companies and other heavy industries. Exxon is calling on industry and government to capture carbon dioxide at industrial plants in the channel, carry it away in pipelines and inject it deep under the floor of the Gulf of Mexico. 

Norfolk Southern opens new Atlanta HQ

Gov. Kemp and Atlanta Mayor Bottoms officially cut the ribbon on Norfolk Southern’s new headquarters in Midtown Atlanta. The railroad expects to house 800 workers at the new facility. 

GlaxoSmithKline relocating offices and hundreds of workers to downtown Durham

GlaxoSmithKline is relocating its offices in Research Triangle Park to the American Tobacco Campus in downtown Durham, N.C., as the drug giant adjusts to changing demand for office space in the wake of the COVID-19 pandemic. The space at the American Tobacco Campus will accommodate about 650 employees at maximum capacity, about half of the company’s current workforce at the RTP facility. “This is a flexible arrangement that may see people in the new space some of the time and working from home some of the time,” a spokesperson for GSK said.

South Carolina Ports again sets container record

For the ninth consecutive month, South Carolina Ports set its monthly record for containers handled in November. The increase is attributable to a rise in retail imports and cargo volumes at the Port of Charleston. 

In the hairball of supply chain networks, Port of Virginia stands out

The Virginia Port Authority’s investments at Norfolk International Terminal and Virginia International Gateway paid off this year. The port in Hampton Roads avoided congestion issues that have plagued other ports and experienced best-in-class turn times in this fiscal year. 

Virginia wind farm to cost $2 billion more

Dominion Energy’s offshore wind farm on the coast of Virginia will cost about $2 billion more than expected, the Richmond-based utility reported in the fall quarter. Instead of $7.8 billion, the 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) commercial project will cost approximately $9.8 billion. 

With feds help, Virginia says achievement of universal broadband will be completed by 2024

Before the pandemic, Virginia Gov. Ralph Northam said universal broadband would be achieved in his state by 2028. But with federal COVID-19 relief funds, he moved the goal to 2024. 

VEDP CEO Stephen Moret named president and CEO of Strada Education Network

Effective January 2022, Stephen Moret has been named president and CEO of Strada Education Network, a nonprofit social impact organization dedicated to improving lives by forging pathways between education and employment. For five years, Moret has led economic development at the Virginia Economic Development Partnership. Prior to that, Moret was Secretary of Commerce at Louisiana Economic Development. 

Rural Alabama has seen growth of 3,000 jobs in 2020 and 2021

Rural Alabama’s counties of less than 50,000 residents have seen a spike in job creation over the last 18 months. According to the Alabama Department of Commerce, in 2020 and the first six months of 2021, 40 projects that created over 3,000 new jobs landed in “targeted” counties. The combined investments will generate at least $1.5 billion in new capital investment. 

Kentucky tops record year in economic growth

For the first time ever, Kentucky has topped the $10 billion mark in economic development growth in a calendar year. As of mid-November, private-sector and expanded projects exceeded $10 billion for the first time. Through the first 10 months of 2021, economic momentum in Kentucky exceeded any other full-year totals for investment growth. Year-to-date, more than 110 private-sector, new-location and expansion announcements include nearly $10.3 billion in total planned investment that will create more than 15,235 full-time jobs over the coming years.

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