Recession Recovery and Beyond
Study Committee Meeting Duval County January 5, 2011
Clanzenetta “Mickee” Brown JCCI Study Planner mickee@jcci.org
In attendance: Meeting Attendees: Elaine Brown (Chair), Donald Anderson, Guy Anderson, Danita Andrews, Rosa Beckett, Sarah Boren, Sandra L. Brooks, Lee Brown, Cathy Chambers, Lorie Chism, Logan Cross, Jim Crooks, Aaron Curtis, Mick Cuthbertson, Lad Daniels, Kelly DeLucia, Janice Donaldson, Jackson Dunlap, Marilyn Feldstein, J. Scott Gaillard, Nancy Garcia, Bill Gassett, Pam Gerrish Nelson, Cathryn Hagan, Ken Hamilton, Robert Hawkins, Andre Higgins, John Hirabayashi, Raymond E. Holt, David Johnson, Kellie Jo Kilberg, Les Krieger, Bill Larson, Jerry Mallot, Conrad Markle, Bill Mason, Paul Mason, Karen Mathis, Alex McCoy, Paul McElroy, Colleen McFarlane, Julie P. McNeil, Mike Miller, Mike Mullin, Ken Paulk, Tom Patton, Stephen Pollan, Mary Randall, Granville Reed, Clive Ricketts, Steve Rieck, Jim Robinson, Stacey Roussel, Kathy Sandusky, Beth Slater, Stephen Strum, Michelle Tappouni, Joe Whitaker, and Tina Wirth [If your name does not appear, but you were in attendance, please let us know.] Staff Members: Mickee Brown, Skip Cramer, Demetrius Jenkins, Katie Ross, Steve Rankin and Molly Wahl Meeting Time: Noon – 1:30 PM Discussion: Chair Elaine Brown welcomed the study committee and thanked Brian Teeple, Executive Director for the Northeast Florida Regional Council, for providing meeting space for the Recession Recovery study. Elaine spoke briefly about the seven partner county meetings, calling them a great success with over 300 participants from across Northeast Florida. She also encouraged committee members to read the meeting summaries from those seven meetings and the summary report in the day’s handouts. After the self-introductions were completed, Elaine introduced the day’s speakers. Bruce Ferguson, President/CEO of WorkSource Jerry Mallot, President, Cornerstone and Executive Vice President, Jacksonville Regional Chamber of Commerce [Staff Note: Jerry stood in for BB&T Regional President Scott Keith] Dr. Paul Mason, Professor of Economics, University of North Florida and founder of the Local Economic Indicators Project (LEIP) Bruce Ferguson’s Presentation 1. How many and what kinds of jobs have been lost since the recession started in 2007? Questions 2. Which populations have been most and least affected by unemployment in Northeast Florida? 3. What role (if any) has education, experience, or skill level played in protecting people from losing their jobs? 4. From a workforce development/preparation perspective, what can communities and individuals do to be as economically competitive as possible?
The jobs peak was 639,000 in May 2007. From that time through November 2010 the region has lost 56,000 jobs; a decline of nine percent. Forty percent of the jobs lost were in the construction trades. The Jacksonville MSA now has 582,000 jobs. The greatest growth has been in the education and health services sectors, though all sectors have suffered declines. The most unemployment claims filed in 2010 were for customer service jobs. The largest group of unemployed is 30-54 years of age. Some populations have been disproportionately affected, including young people ages 16-29 who make up eight percent of the
Page 2 of 5
employed workforce, but 22 percent of the unemployed. African-Americans represent 19.8 percent of the employed workforce, but 35 percent of the unemployed. Males, the poor, and those without bachelor’s degrees also have a greater chance of being unemployed. On the other hand, more education equals a lesser chance of being unemployed, but those with bachelor’s degrees also make up a large number of the unemployed when compared to the number of degree holders overall. This reflects that all groups have been affected by the recession. The medical profession had the greatest number of job openings in as of 2010, which mirrors growth in the sector during 2010. Promote life-long learning and eradicate the myth that all high school graduates should go to college immediately after high school. Some young people need to go to work others should go on to college. Some of these young people will go on to get a degree later especially, if there is a personal and community focus on lifelong learning. High school students should have the option of graduating with a certification to go to work. The community must also address the skills gaps in our community. Jerry Mallot’s Presentation We are coming off four pretty good years of job development, having completed 26 projects yielding 3,200 jobs. More jobs with large companies are expected to be confirmed. The presentation that Cornerstone delivers to prospects establishes for the prospect why the Northeast Florida region will work for them. The presentation that we deliver starts a conversation and places us on the offensive. Key presentation points regarding the region include the following. The region is/has: geographically positioned as being internationally accessible. Companies like Deutsche Bank and Saft now call Northeast Florida home; the western-most East Coast port in the United States. The region is sometimes thought of as being out of the way, but 50 million people are accessible within an 8 hour drive; economically diverse, not dependent on any one industry; steady population growth is important because prospects want to move to areas where the company’s jobs can be filled; a young dynamic workforce with an average age of 37.8, this is important because it is assumed that Florida has an older population; strong public school systems – wide range of higher education institutions in Northeast Florida and surrounding areas; good intermodal transportation - three interstates, three rail lines, international airport, and a deepwater port enabling distributors and manufacturers to reach one-half the country’s population within the next day; many coastal cities were not being considered by companies after 2005 because of heavy hurricane activity, but due to the “recurvature effect”, Jacksonville is less likely than New York City to be hit by a hurricane; good (but not great) air service. Jacksonville International Airport had 34 non-stop flights prior to the recession and the fuel crisis, now there are 27 such flights with hopes of expanding; and the cost of living in the region was getting high but the recession has reduced costs to be more in line with competitor cities. The presentation also: provides a list of anecdotal studies where Northeast Florida counties or the region is listed among the “best places” for a particular attribute; lists the large well-known companies that are located within Northeast Florida. Companies do not want to be pioneers; they want to be located near peer organizations; and outlines facts about the region – politics, amenities, climate, etc. Amenities are important, but 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
Page 3 of 5
making a good business case must lead the relocation/expansion discussion. Dr. Paul Mason’s Presentation 1. What are the economic indicators used to determine the health and competitiveness of Questions the local economy? a. What do the indicators tell us about how we are doing in Northeast Florida? b. What can we expect to see in 2011 and beyond? 2. Does our region have any unique advantages or disadvantages for recession recovery? 3. Have local economic policies contributed to slow economic growth and high unemployment in Northeast Florida? 4. What should the public and private sectors do to get people back to work in Northeast Florida? How soon and where will successful policies manifest in the indicators?
Employers across all seven counties shed jobs with the peak for high employment in Duval County being October 2007. The recession has affected each of the counties differently, though Baker and Clay Counties have fared better than Duval at different points in time. The Consumer Price Index (CPI) has decreased as reflected by lower prices in the region. Inflation is one-half what it was in 2005. Consequently, businesses are selling their products for less money. For businesses this means less revenue, which will affect whether or not workers are hired. Low inflation is an indicator of a weak economy. Projections for retail sales are down which also negatively affects employment. If people are not spending then businesses are not hiring. It will take 5-10 years of growth at the current rate to get the economic back to pre-recession levels. This study is right to take a regional look and each county is showing slow growth, but there is inconsistency across the region. The holiday buying season was stronger than expected, but we are not close to a point where businesses will begin mass hiring. A major increase in production is needed to get us back to where we were. The port and health care provide the area with unique advantages along with agriculture and tourism. After previous recessions, Northeast Florida was well-positioned for recovery. The region is not as wellpositioned as it once was. Education is one of the reasons for this new reality. An increase in the number and quality of college graduates in Northeast Florida is critical if we are to attract high technology jobs into the area. The New Florida plan proposed by the Florida Board of Governors aims to increase funding support to universities to that end. [Staff note: The plan intends to bolster both university-based research and the number of post-graduates in Florida by providing $1.75 billion for research equipment and university programming in STEM fields. Universities must also use the money to increase admission, retention and graduation rates.] Greater advocacy for improving education is needed at the State level and beyond because the issues cannot be resolved at the local level. Florida ranks dead last among 50 states in education funding. Our legislators are proud of Florida’s cheap education system: Only California and Washington allocate less per student than does our legislature. Macroeconomic indicators are self fulfilling prophecies. If people believe that things are going to get better, then they do. The private sector will need to create jobs; this is not something that government can do. Questions and Answers with Speakers Q. What are the implications for area if the port expansion does not take place? Mallot: Recent news reports have focused on the Port of Miami, however it is important for Northeast 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
Page 4 of 5
Florida stakeholders to get the state to recognize that investment in Jacksonville’s port is critical due to our region and the state. The fact is we have the best geographic location. Q. Who has the world’s ideal education system? Mason: Finland is generally recognized as having the best school system in the world. That quality is attributed to hiring high quality teachers who are highly paid and well regarded along with the homogeneity of the population. Q. What can we do as a community to better prepare people for work? Ferguson: The community needs a better educated and more skilled workforce. We have high dropout rates in the region for example. Why is that? The community needs to address this and other issues. We have done our young people a disservice by expecting everyone to go to college right after high school. The community has high quality technical schools, which are a viable option for some of the community’s young people. Education must also respond quickly to meet the needs of the business community. Q. Where in the process do we lose the business relocation prospect? Mallot: The prospect will decide to stay put and expand in the area where they are located or the deal dies. In other cases our location is not optimal for their business model, incentives are too low overcome drawbacks, and it makes business sense for the prospect to stay put. Incentives generally do not make that much of a difference until the deal requires a differentiator when between the final two or three locations. Workforce experience can become an issue depending on the types of jobs. Competitors include Savannah and Mobile for port related business and Atlanta and Tampa. Texas has become a strong competitor outside the region. Q. Customer service jobs are number one for jobs lost, but also number five in job openings. Were employees hasty in getting rid of these jobs? Ferguson: Such decisions are made by local companies, but the data seem to indicate that there is now demand for customer service professionals. Q. How are the recession, innovation and entrepreneurship related? Mason: Innovation in business is cyclical. A great idea may lead to a new business and new jobs are created. Layoffs during a recession also lead to the creation of new businesses because it is a viable alternative when no one else is hiring. Innovation may occur when productivity must be maintained with fewer workers as companies have to do more with less. Q. How can we share the Cornerstone presentation with our own community so more people know about our assets? Mallot: Having the information widely disseminated locally is a great idea. We need the community to help us with this. Q. How does the future of outsourcing affect our community? Ferguson: Jerry Mallot and I have traveled to India and visited some of these outsourcing sites. I am less concerned than I was before the visits. We expect this trend to continue, but companies are looking for centers of excellence all over the world, including in the United States. The companies located in India are no exception; they too are looking for an international presence. Jerry: Some jobs cannot be sent offshore because of security concerns for example, so we have an opportunity and must be prepared to compete for those jobs. Q. Do the unemployment numbers reflect those who have stopped looking for work? Ferguson: The unemployment figures in the presentation do not reflect those people who were working 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
Page 5 of 5
fulltime and are now part-time, the underemployed, or those who have stopped looking. Paul: With the addition of the groups that Bruce mentioned the unemployment rate is likely to be 15 to 20 percent. Q. Should we take a look at providing different tracks for secondary education students? Mason: Vocational education was prevalent many years ago, especially in the Northeast where I grew up. Progressiveness in education has made the focus on academics possible, however not every young person belongs on a track to attend college. Mallot: Low skill manufacturing jobs are not readily available for high school graduates today and the career academies exist to address this reality. Graduates from a career academy, which are located within the high schools, allow students to graduate with a workforce certification or prepared to attend a two or four year college. We also have a high college dropout rate and effort must be placed on making sure students complete that level of education as well. Q. How dynamic are our places of work locally? Ferguson: Changes in where and how people work are happening locally. However, it is neither clear how the region is doing with regard to such changes in the workplace, nor how efforts to make changes would be enforced. Mallot: Some major companies in our area already provide flexible work schedules and opportunities for telecommuting. Q. Is green technology a way to see our way through the recession? Mallot: Saft is an example of a green technology company with their focus on developing lithium batteries. The long-term plan is uncertain, however, in the short term this industry is being subsidized with the hope of a long term payoff. Committee comments on the day’s discussion Focus needed attention on secondary school students who need workforce training if they are not interested in attending college after graduation from high school. Elaine asked the group to complete the group process check forms and reminded the committee of next week’s meeting. The meeting was adjourned at 1:35 PM.
2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org