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LABOR MARKET ASSESSMENT OF MID-MISSISSIPPI DEVELOPMENT DISTRICT AND LEAKE COUNTY
Prepared for:
South
Mississippi Planning and Development District and
November 18, 2002
Prepared by:
The WADLEY-DONOVAN GROUP A Division of Grubb & Ellis 732.225.0433
table of contents Section Page Background..................................................................................................................................................... i 1 Executive Summary........................................................................................................................................ 1 Key Assets................................................................................................................................................ 1 Key Challenges.......................................................................................................................................... 3 Overall Conclusions and Recommendations................................................................................................ 4 2 Labor Market Orientation............................................................................................................................... 9 3 Labor Availability......................................................................................................................................... 15 4 Labor Demand............................................................................................................................................. 24 5 Labor Quality............................................................................................................................................... 27 6 Education and Training................................................................................................................................. 30 7 Labor Cost.................................................................................................................................................. 34 8 Operating Environment................................................................................................................................. 36 9 Appendices Appendix A – Demographic Maps Appendix B – Background Data Tables Appendix C – Comparative Statistical Data
BACKGROUND This labor market evaluation is the product of a contract between the Wadley-Donovan Group, the South Mississippi Planning and Development District, and the Twin District Workforce Area. It is a summary of the labor market resources of a nine-county region in southeast Mississippi consisting of Clarke, Jasper, Kemper, Lauderdale, Leake, Neshoba, Newton, Scott, and Smith Counties. For purposes of this analysis, this region is referred to as Region 1. This analysis uses data obtained through two WDG-conducted surveys of labor-related issues among employers and households in the region; interviews with representative employers, educators, elected officials, staffing services, and state labor officials; and a review of key statistical and other secondary-source information. The employer survey is designed to gather information from area employers on the availability, quality, and cost of labor. The primary purpose of the household survey is to quantify and profile the area's regular labor force and its hidden labor reserve. Both surveys were produced in collaboration with Younger Associates, based in Jackson, TN, which specializes in business-to-business and business-to-consumer surveys. The interviews and secondary data supplemented this information. The purpose of this document is to present an objective labor market assessment of the nine-county region. Executive Summaries have also been prepared for each of the nine counties and submitted under separate cover. The findings presented herein are those of WDG only. We have examined Region 1 from a corporate perspective and our own knowledge of labor markets across the U.S. This authorized study required independent research to review the labor market resources of the region from the perspective of a locationally active company. For this study, WDG: · Interviewed approximately seventy representative employers, educators, and government officials throughout Region 1. · Prepared maps depicting the geographic concentration of selected demographic variables in nine 30-minute commute zones. These maps are presented in Appendix A. The commute zone nodes are: Quitman Center (Clarke County) Bay Springs #2 Industrial Park (Jasper County) Downtown DeKalb (Kemper County) US Hwy 45 and Interstate 20/59 (Lauderdale County) Intersection of Hwy. 25 and Hwy. 35 (Leake County) Highway 15 Bypass and Highway 19 North (Neshoba County) Decatur Center (Newton County) Forest Center (Scott County) Raleigh Center (Smith County) · Prepared and reviewed statistical data on key location factors for each of the nine counties, the region, the 30-minute commute zones identified in the region, Mississippi, and the U.S. Sources of information include the U.S. Bureau of the Census, the U.S. Bureau of Labor Statistics, and the U.S. Departments of Education and Commerce, the Mississippi State Development Authority, and the Mississippi State Tax Commission. Population estimates from the 2000 Census are included, which correspond to data provided by the Center for Population Studies at the University of Mississippi. However, Applied Geographic Solutions, a demographic data vendor from Thousand Oaks, CA was also used as a data service, because complete data from the 2000 Census are not yet available. Exhibits containing the gathered data are presented in Appendix B. · Surveyed all employers in Region 1 with ten or more employees in all business sectors except for retail and public administration. Surveys were sent to employers in those sectors with 50 or more employees. Surveys were sent in the early summer of 2002. Findings from the employer survey are presented in Appendix C. · Surveyed in the early summer of 2002 a random stratified sample of Region 1’s residents aged 18 to 74 to gather information on employment status, skills, training needs, and income and education levels. Household survey findings are presented in Appendix D. A study of this nature can do no more than describe local conditions. The actual impact of these conditions for any given organizational activity will vary, reflecting the different characteristics and structure of each organization. WDG’s principal findings and conclusions are recapped in the Executive Summary, followed by a presentation of findings on key labor market factors. Summary tables of the background data supporting our findings and commute maps are contained in the Appendices to this report. The Wadley-Donovan Group is a Grubb & Ellis Company that specializes in location consulting. Clients include many of the world's leading companies. As an outgrowth of this corporate consulting, WDG is frequently asked by economic development agencies and utilities to assist them with their economic development programs. Assistance is typically provided in sales and marketing, strategic planning, database development, overall product development, and assessment. Clients have included New Orleans; Eastern Idaho; Hampton Roads; Orange County and Orlando, FL; Tampa; Memphis; Asheville, NC; Raleigh; Richmond, VA; Jackson, TN; Mobile and the states of Delaware, Iowa, Kansas, Kentucky, Wisconsin, and Maryland. EXECUTIVE SUMMARY Region 1 of Mississippi is a nine-county area in eastern Mississippi consisting of Clarke, Jasper, Kemper, Lauderdale, Leake, Neshoba, Newton, Scott, and Smith Counties. The region has a combined population of 242,074, and is expected to have moderate growth over the next five years. The largest city in Region 1 is Meridian. The region is displayed within the context of the South-Atlantic states in Figure 1, and in the context of Mississippi in Figure 2. Key Assets The region has a number of assets that would make it an attractive location for distribution operations and diversified light manufacturing facilities, namely, general manufacturing such as automotive parts, metal fabrication, plastics, and production machinery with 50 to 500 initial employees (depending on location within the region), and some administrative office support operations (such as entry-level back office operations) of 50 to 350 employees (depending on location within the region), including inbound call centers. The region’s assets include: · A potential hidden labor supply with diversified skills. For new and expanding employers, there are several sources of labor that currently may not be used to their full potential in Region 1. Key components of this hidden labor supply are: Residents that are not currently employed. WDG estimates from its survey data that there are 32,250 working-age residents (18-74 years of age) in the region who are not employed, but are interested in employment. An inability to find a job that matches their skills and training is the major factor keeping residents out of the workforce. The occupational skill base of the region’s non-employed residents who want to work are diversified. Clerical and administrative skills constitute the single largest category with 17.5%, followed by manufacturing/production (skilled) at 10%, and warehousing and hospitality/hotel/restaurant/guest services each at 7.5%. Approximately 20,640 currently-not-employed residents are interested in a job if required to receive job training. Residents currently employed. Many of Region 1’s employed residents would like to enhance their job skills. 49% of residents currently working would be interested in receiving training to acquire new job skills for career development, which equates to 50,000 individuals. These individuals would offer a potential workforce for existing and new companies offering career advancement and training opportunities. Fields of greatest training interest are: computer-related (professional and support), management/administration, government, education, social services, and financial services including insurance and real estate. Military retirees and dependents of active duty personnel at the Meridian Naval Air Station. This military installation has 1,956 active duty personnel, 1,332 reservists, and 830 family members of stationed military personnel. Some local employers report good experiences employing military retirees and spouses from the base. Region 1’s post-secondary institutions graduate more than 1,406 with associate degrees and/or certificates. · Manufacturing, distribution, construction, service, and office workers are readily available. Specific occupations identified by surveyed employers as being available in satisfactory-to-good levels include: heavy equipment operators, construction trades, machine operators, material handlers, unskilled laborers, entry-level clerical workers, clerical workers with advanced computer skills, administrative assistants, customer service representatives, accounting clerks, computer operators, educators, electrical/electronic engineers, engineers (general), food service staff, and skilled health services. Region 1 has a strong manufacturing base that provides an experienced and skilled base of employees for new and expanding employers in that sector. · Proximity to a good transportation network. Interstate 20 runs east through Scott, Newton, and Lauderdale Counties and west to Jackson, Shreveport, and Dallas. I-20 connects with I-59 in Meridian and runs south through Lauderdale, Clarke, and Jasper Counties to New Orleans, and north to Birmingham. Air service is available from Jackson International Airport on the east side of Region 1 one-and-one-half hours from Meridian Kay Field, the city’s airport. · Low to moderate wages and earnings for entry-level and experienced workers. Based on salary information provided by local employers, labor costs in the region are low. Labor costs in Region 1 are lower in all industry sectors except mining, relative to state and national figures. · Strong customized and general training programs offered through the region’s post-secondary institutions. The region is served by East Central Community College in Decatur (Newton County), East Mississippi Community College in Scooba (Kemper County), Meridian Community College (Lauderdale County), and Mississippi State University–Meridian (Lauderdale County). Other nearby colleges also serve the region, including Hinds Community College, Holmes Community College, Jones County Community College, Jackson State University, University of Mississippi Medical Center, Belhaven College, Millsaps College, Tougaloo College, William Carey College, and the University of Southern Mississippi. · Mississippi is a pro-business state. Mississippi has some of the lowest Workers’ Compensation and unemployment insurance rates in the country. It is a right-to-work state. There is a minimal union presence. Several labor-related incentives are available from the state. Tort reform has become a state priority and will need to be successfully addressed in order to avert diminished health care delivery and escalating insurance premiums. There is a strong base of manufacturing skills available in the region providing a skilled and experienced workforce. In that sector, approximately 37% of the workforce is employed in precision production, machine operator, transportation, and laborer/handler occupations. Region 1 has a slightly lower proportion of employment in sales, service, clerical, professional, technical, and executive occupations than the state. See Table 1 for a demographic and labor-related statistical summary of the region and its counties, the state, and the nation. In 2000, the census reported that education levels in most of the Region 1 counties were close to state and national averages in two key categories: residents with high school diplomas and no further education; and residents with some post-secondary education but no degree. The percentage of residents with only a high school diploma in the region was higher than state and national averages, while the percentage of residents with some post-secondary education but no four-year degree was slightly below state and national averages. Meanwhile, the proportion of residents with an associate degree was higher than the state average, but slightly below the national average. The percentage with bachelor’s and graduate degrees, however, was lower in the region than state or national averages. There is a labor cost savings in the region. Total average annual employee earnings are 8% below the state average and 35% below the national average. Meanwhile, a high proportion of households earn less than $35,000 per year. Based on WDG’s experience, the higher the percentage of households earning less than $35,000, the more likely it is to have people who are interested in upgrading their jobs, working second jobs, or working as second income earners. Region 1 is largely rural, with one medium sized city, Meridian, serving as the region’s economic hub. Philadelphia, a smaller city, is located in Neshoba County. The region is bordered on the west by the Jackson metro area. Based on residential survey responses, the geographic distribution of these and other smaller employment centers afford 73% of the surveyed residents a commute of 30 minutes or less to work. Residents have access to a transportation network that links the region’s towns and employers with some efficiency. New and expanding employers will be able to access a sizable labor force from most locations within the region. Lauderdale County has a population base of almost 100,000 within a 30-minute commute area, followed by Smith County (67, 223) and Neshoba County (58,770). Key Challenges Despite these assets, the area has some challenges. The key challenges include: · Region 1’s percentage of population aged 45 and older is higher than state or national averages. The region’s median age of 35, compared to 33 for the state, indicates Region 1 may be losing its younger residents. Some companies shy away from locating in areas with a relatively small and aging population, because they view these areas as declining. · The labor force in Region 1 showed no net growth between 1996 and 2001, while Mississippi’s labor force grew 3% over this period and the nation grew 6.5%. The only counties in the region that showed growth were Clarke (6%), Jasper (12%), and Kemper (2%). · The region’s employment is over-represented in agricultural services, forestry and fishing, mining, and lower-wage manufacturing sectors (e.g., poultry processing). Many lower-wage production jobs, e.g., textiles and apparel, have been leaving the region and have not been replaced with higher wage jobs. Other Region 1 employment sectors are slightly under-represented and have been growing more slowly than state or national averages. As a result, the region is facing the challenge of changing economic conditions created by the national decline of low-skill, labor-intensive jobs that are either being eliminated through automation or moving offshore. · Forty-six percent of non-employed survey residents have not held a job in the past five years, and the average length of non-employment for this population is almost 2.5 years. 40.8% of Region 1’s non-employed that are interested in working indicate that there are no area jobs that match their field of training. 17.5% indicate that they have employable clerical and administrative support skills, 10% have manufacturing and production skills, 10% indicate they have construction and building trades skills, and 7.5% indicate they have warehousing skills. Further exploration of the potential of this labor pool is needed. · Approximately 64% of non-employed survey residents (20,640) that are interested in work indicate they would be interested in a job if they were required to receive job training. Stated preferences for the following fields were indicated: 14.7% are interested in computer-related training, 11.8% in government fields, and 8.8% in social services. Further exploration of this issue is warranted. · Almost 12% of non-employed residents who are interested in working are limited in their ability to work because of a disability. Alternative work arrangements such as flexible hiring practices, special training programs for the disabled, special transportation programs, or telecommuting may allow some of these individuals to participate in the workforce. Further exploration of the potentials of this group is also needed. · The education levels of Region 1’s residents are below state and national figures, spreadsheet and database software skills are weak, and residents and employers see a need for additional or expanded training programs, specifically in basic and life skills, allied health, computer science, and skilled craft occupations. While the area’s secondary and post-secondary schools have taken several steps to address training needs and deficiencies, there is still room for improvement. Overall Conclusions and Recommendations · In the secondary schools, emphasis needs to be placed on keeping students in school until they receive their high school diplomas. This must be a joint effort between educators and parents. For those high school students not interested in obtaining a two-year or four-year college degree, local vocational and technical education must be enhanced to prepare these students for career development and job preparation. Greater career and job counseling for middle school and high school students not interested in college is also needed. Students who drop out before they receive their diplomas, and adults without high school diplomas need to be provided alternative, convenient ways to receive their GEDs, including night or weekend classes at local facilities. Meanwhile, employers would like to see additional emphasis by the high schools on work ethic and job preparedness skills. For the region, the priority should be maintaining the number of students who are receiving high school diplomas or equivalents, and enrolling and graduating more students from vocational and technical programs at the two-year, post-secondary level. · A mismatch exists between the occupations most in demand by local employers and the availability of those skills. The skills that are most prevalent, such as clerical and general office support skills, are not in high demand by local employers. Meanwhile, there is a significant current and projected demand for skilled machine trades and machine and equipment maintenance and repair skills, but employers report limited availability of job applicants for these positions. The solution to this skills gap is ultimately a long-term focus on enrolling more students into and graduating more students from technical and vocational programs in machine trades, machinery repair and maintenance, and technicians with manufacturing, process, overhaul, and maintenance skills. Increased outreach on tech-prep programs and apprenticeship programs to both high school students and adults may help alleviate some of this pressure. · Other occupations in demand include management trainees, retail and non-retail sales, computer technical support specialists, and computer network administrators. Many of these positions could be filled by students or adults with a matching associates degree. Region 1 enjoys access to several community colleges with branch campuses that can provide the necessary training to meet occupational demand for these positions. Employers need to better engage the educational institutions in their communities both to provide customized training to upgrade existing employee skill sets, and to convey their current and anticipated demand for graduates with specific educational training and expertise. · Residents and employers have identified several other training needs. Adult education programs such as basic math, literacy, computer software and certification courses, and GED programs need to be expanded and made accessible to the general public. Innovative ways to offer remedial and basic education classes need to be explored, such as scheduling at different times of the day and evening and increasing the number of class locations. Expanding and enhancing the training opportunities for students and workers will be a major factor in the development of the area. Some of this training could be offered by area employers. Employers that offer training and career advancement opportunities, good working conditions, and career advancement opportunities will be the most successful in attracting quality employees. · Many localities within Region 1 report a shortage of affordable rental housing. In some cases, employers are purchasing housing and busing workers to their plants. New and expanding employers may be faced with a tightening labor supply should additional affordable housing not be developed within their communities. This issue needs to be explored in more detail. · The Pearl River Resort (Neshoba County) has established a hospitality institute to provide on-site skills training for their hotel and casino workforce. At present, the state does not allow cooperative agreements between the gaming industry and state-supported educational institutions to coordinate delivery of skills training. This issue should be further explored in light of the significant planned growth and labor demand of the gaming industry in the region. · Many area employers reported dissatisfaction with the job readiness and basic skills of applicants and new hires. High schools should consider establishing life skills training programs and pre-employment training programs for graduating students intending to enter the workforce. If successfully implemented, first year turnover for entry-level workers could be reduced. In addition, high schools should consider "guaranteeing" their graduates. Should an employer determine that a recently hired high school graduate does not possess minimum educational attainment commensurate with that of a typical high school graduate, the high school should offer remedial training at its cost. · Tier-two and tier-three automotive suppliers are investigating Region 1 for the establishment of new production and distribution facilities. The establishment of a cooperative automotive skills training institute should be investigated by the region's community colleges (ECCC, EMCC, MCC). This would convey a strong message that the region is prepared to make the necessary human resource investment to attract the industry and its employment opportunities. Other industries that would be suitable for recruitment and attraction efforts include distribution centers, back office administrative operations, and general manufacturing operations including plastics, fabricated metal products, and production machinery.
FIGURE 1 THE STUDIED REGION IN THE CONTEXT OF THE SOUTH-ATLANTIC U.S.
FIGURE 2 THE STUDIED REGION IN THE CONTEXT OF THE STATE OF MISSISSIPPI
TABLE 1 COMPARATIVE DATA ON REGION 1 AND ITS COUNTIES, MISSISSIPPI, AND THE U.S. Source: AGS, Inc., U.S. Bureau of the Census
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