Capital Goods - January 2009

To be, rather than to seem
By Scott Mooneyham

It would be interesting to know how many times in the last eight years Mike Easley has uttered something about the challenges of competing in a global economy. Perhaps two or three thousand? North Carolina’s outgoing governor isn’t alone. For politicians, educators, economists and business executives, the battle cry has become a tedious refrain. Everyone knows that, for more than two decades, low-skill manufacturing jobs have been moving overseas. In one recent three-year period, North Carolina lost nearly 40,000 jobs. Manufacturers who have survived — even those running small operations with just a handful of employees — pick up the phone to call Hong Kong for custom-designed parts that can be delivered in a few days.

In the age of the Internet and tumbling trade barriers, it’s a small, small world in which we live and must compete, so public policy focuses on how our future work force must adapt to it. But plumbers don’t compete in a global economy. Nor do carpenters, nurses and store clerks. Even though demand for these kinds of jobs is growing in North Carolina, they’re often overlooked. Some $3.6 billion — about 17% of the state operating budget — is spent each year to run public universities and community colleges. Even if higher education is about more than just preparing people for jobs, taxpayers ought to expect that this money be spent with work-force needs in mind.

Policymakers aren’t ignoring the issue. The N.C. Commission on Workforce Development, which includes elected and appointed officials, business executives and union leaders, issues reports every few years. This past summer, UNC Chapel Hill researchers issued the second part of a study commissioned by the state Department of Commerce to identify as recruiting targets industries likely to experience substantial job growth. A recent effort called The University of North Carolina Tomorrow has begun examining ways the system must change to meet all types of challenges.

But often the people who put these reports together focus on their hopes for North Carolina rather than what they find the state to be. There’s nothing wrong with that. Without dreams, Research Triangle Park might still be farm fields. Nevertheless, projections by the Employment Security Commission show growth in occupations that don’t appear to be threatened by global competition or require years and years of education beyond high school. The most substantial growth in the next eight years will be in health care, mostly in occupations that don’t require advanced degrees, including home health aides, registered nurses and nursing assistants. You can outsource reading MRI scans to a radiologist in India; no technology allows you to change bandages or bedpans that way. Also in demand will be carpenters, bookkeepers, landscapers and truck drivers.

Obviously, few people are going to get rich working as clerks or home health aides. So trying to recruit and nurture aerospace manufacturing and Internet hosting — two industries identified in that Commerce Department report as ripe for development — makes sense. And aiming educational resources at development of emerging biotechnology or environmental sciences might pay dividends. But that’s betting a lot on faith and hope. The 4,000 vacant nursing positions North Carolina hospitals had in 2006 is not speculation. Nor is the fact that public universities and community colleges turn away more than 25% of qualified applicants to their registered-nursing programs each year because there isn’t enough space for them. It’s fact, not speculation, that demand for nurses will grow well into the future.

Given those realities, wouldn’t it make sense to put more educational money into nursing programs to allow more applicants to enroll? Wouldn’t doing so allow work-force supply to move closer to demand, putting more workers in more well-paying jobs? Let’s not forget the growing demand for landscapers and construction workers. Fewer resources going to vocational education in public schools guarantees that fewer students who might have been steered to those in-demand jobs won’t have the entry-level skills, or even the interest, to apply.

We live in a global economy. We buy flat-screen TVs made in Japan, clothes made in China and computers made in Winston-Salem that run on software from San Jose. Some of us may work for companies that compete for business all over the world. But for others, that’s not the case and never will be. And for some of those people, their job skills are in more demand than ever.

Scott Mooneyham is the editor of The Insider, www.ncinsider.com.