Company Town, Regulatory Capture
ByI just made friends with this young guy who has been in Asheville for only a couple of years. His sweetheart (he calls his girlfriend his sweetheart) is from somewhere east of Asheville. His sweetheart comes from a working class family that had worked in the textile mills back in the day.
He says Asheville doesn’t make sense to her. It is mostly rich retirees, yuppies and artists. Few of the kind of people she recognizes. That’s because our economy has a great big hole in it. Not much room for people in the middle, and few ways for people at the bottom to get there.
Another friend observes that if people in Asheville are lucky enough to boost their salary into the $30k range, they have to move somewhere else to make the jump to the middle income level. Career-track jobs aren’t plentiful enough here.
In my AC-T column last Sunday I asked people to try a thought experiment involving the word “industry.” Here’s another experiment:
What phrases come to mind when you hear about Asheville’s “high housing costs” or “inflated real estate”?
Very likely the phrase is a familiar one. (Some people — not Gordon, of course — get very testy with me when I use it, so I’ll try to avoid typing You-Know-What.) More likely, the phrase that didn’t come to mind was “better jobs.” I find that really curious, don’t you?
As answers to Asheville’s high cost of living go, You-Know-What is not incorrect. It is incomplete.
No one (well almost no one) is talking about better jobs. You-Know-What or better jobs isn’t an either/or matter, but yin and yang. If you want to lose weight, you can eat less or exercise more. But a balanced combination of the two works better, is healthier and more sustainable. Asheville’s plan for helping low-wage workers cope with our high cost of living is out of balance.
Attracting better-paying jobs gets a single sentence in the city’s 35-page Affordable Housing Plan. You can see this again in the Mountain Xpress piece Gordon referenced recently: “And while housing costs in Asheville rank among the highest in the state, wages remain low.”
That’s it on wages. The rest of the Xpress piece is about how we address high housing costs. Low-wage jobs, it seems, are an unchangeable fact of Asheville life, and the best workers can hope for is to find ways of coping with costs.
But why are wages so low here? Where’s the public demand for fixing that? What are towns with more balanced economies doing right that we are doing wrong? Nobody’s talking about what we might do to make life in Asheville more sustainable by building an economy that puts more money into workers’ pockets.
What’s with that, anyway? No wonder my friend’s sweetheart thinks Asheville doesn’t make sense.
I have begun seeing this phenomenon as a species of “regulatory capture.” That occurs when government agencies get so cosy with the industries they are supposed to regulate that they basically stop doing oversight and give companies whatever they want. It can happen so slowly that regulators might not even notice it.
Just before my opinion piece came out in the Citizen-Times last Sunday, a guy told me he’d grown up in a “company town” and knows one when he sees one. Asheville, he said, is a company town.
The company’s primary business focus is tourism and real estate development. Some while back, the company decided to let manufacturing go, and Asheville’s middle class with it. You noticed, huh?
And – surprise – in a real estate-driven economy the answers to economic problems tend to be real estate-driven answers. That doesn’t make those answers entirely incorrect. Just woefully incomplete. When the only tool in your toolbox is a hammer, the whole world starts looking like a place for more houses and shopping. Not a lot of out-of-the-big-box thinking there.
“Wages remain low.” Go figure.
For a town that talks so much about sustainability, that’s a different kind of oversight. A job is not sustainable if you cannot pay for your housing, raise your children and save for retirement on it.
But reviving the idle manufacturing sites around the county and around the region – industrial development – isn’t even part of the discussion. Most places I go where the manufacturing sector is still active, the divide between the Haves and the Have Nots is not so wide as here. People have better-paying jobs and more money in their pockets. It’s hard to promote attracting better-paying jobs here when the public conversation remains one-sided.
In a company town, of course, the company would rather you turn first for solutions that play to its core competencies.
32 Comments
July 16th, 2010 at 4:57 pm
“… primary business focus is tourism and real estate development. Some while back, the company decided to let manufacturing go, and Asheville’s middle class with it.” AMEN!
Asheville has a long history of low wage – high cost of living. This area is a great place to live but a not so good place to “make” a living.
To repeat my comment from an earlier posting – Asheville and the surrounding area must have jobs other than waiting tables, cleaning hotel rooms, and truck driving. I don’t like to be the one jabbing at every nice thing Asheville has to offer but I sometimes just shake my head at the elation over every bar, cafe, and art studio that opens but there is never a mention that the vast majority of people in the area do not have the money to enjoy those establishments. Every business would benefit from jobs that are dependable (year around with benefits) and that pay a living wage thus yielding not only the ability to pay the various taxes but have a little left over to spend on luxuries – like eating out, attending music events, or perhaps buying something from an artist/craftsman.
I wish you good luck with spearheading this attempt to raise consciousness and energy concerning this issue. One would think it is the most simple and obvious common sense but…
I still think you should be our Congressman. Sanity, literacy, common sense – what a wonderful change that would be!
July 16th, 2010 at 6:49 pm
Congressman? How about Senate?
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July 16th, 2010 at 7:18 pm
All I can offer is; when I moved here from New Orleans, I brought my livelihood with me. I was able to buy a nice house in a great neighborhood and paid it off in 12 years. I sold my designs to specialty shops and catalogs around the country. It never occurred to me to try to make the money I needed from here. And that was the general consensus of anyone I told of my plans to move here. They’d say ” I’d love to live there, but no good paying jobs.” So over 20 years ago, I left new Orleans driving a 20 foot U-haul, towing my car and and my livelihood with me.
That said…it’s not the just the middle class in this town…the middle class is declining all over the county. I blame NAFTA/ Clinton and the Bushies.
July 16th, 2010 at 8:07 pm
It’s kinda hard to compete when there is an 8 year old Chinese girl who will make in a year what we would make in a week…
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July 16th, 2010 at 8:54 pm
Then how can I be building factories not far from here where non-Chinese people get jobs?
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July 16th, 2010 at 10:44 pm
Been reading the development plan for the city of Rome, GA. You’ve seen these things. Lots of “take advantage of leveraging regional synergies” BS. Not exactly a laugh riot.
But after my Sunday rant about turning the BASF site into a strip mall, this action item under “ENSURING THE QUANTITY AND QUALITY OF LOCAL OFFICE, COMMERCIAL, AND INDUSTRIAL LAND” made me laugh out loud:
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July 17th, 2010 at 8:27 am
Tom, I read your piece in the Mt. Express and I’ve read this one, and I’m trying to figure out what you think the cause of the problem is and what you think the solution might be.
You think the cause is a decision — a policy — by powerful interests to pursue tourism instead of industry? If so, how does it work? I can understand that they might not be making a serious effort to recruit new industry, but did they do something to cause us to lose the plants we had?
On the solution side, do we just need better recruiters? Better incentives?
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July 17th, 2010 at 12:26 pm
Leroy, boy, is that you?
If you’ll wait for the paper tomorrow, someone else is supposed to be weighing in with a story about past decisions and lack of leadership in this area.
And if you’ll be patient, I’ll have more on possible solutions in due course. But in “You can lead a horse to water” tradition, first there needs to be an audience for the answers. The point of last Sunday’s Citizen-Times piece was to try and break people out their complacency. Lots of people have simply acquiesced to low-paying jobs being a fact of life. Mtn. X’s Brent Brown has a take on that here.
Every town loses plants. Not every town is content to let those jobs go and not pursue replacements, as I have written before. (Sorry, the recent site upgrade seems to have messed up some of the older links and graphics.)
“But we’re not Greenville! We’ll never get a BMW,” you’ll hear.
The reason I was spending my Friday night reading the Rome, GA development plan is this 2007 article from Forbes. At half our size, they’ve managed to create a thousand manufacturing jobs in the last ten years, attracting over $309 million in investment. Many of them involve adapting existing spaces for new manufacturing, like this recent announcement.
Stay tuned.
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July 17th, 2010 at 12:40 pm
In the 30 or so seconds I was serious during my mayoral campaign this is something that I brought up. It was followed by the sound of crickets. Maybe because the audience was deaf (I mean literally deaf)…
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July 17th, 2010 at 12:44 pm
Or maybe it was the messenger.
July 17th, 2010 at 4:20 pm
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July 17th, 2010 at 5:15 pm
Britany (or Diogenes, or CJ, or Eugene, or Pat, or Bo, or any of the other names you’ve used in the last few weeks):
You may want to stop using multiple identities with fake e-mail addresses when leaving comments. This is called sockpuppetry. Please review our comments policy, and pay particular attention to the sections regarding valid e-mail addresses and sockpuppetry. This is your final warning.
July 17th, 2010 at 6:08 pm
Suetwo,
I am starting to get the impression that you may in fact not like me.
July 18th, 2010 at 9:00 am
From the “No, I’m Not Making This Up Department” (and a guest column from Waynesville in today’s AC-T):
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July 18th, 2010 at 12:51 pm
With all due respect, Tom, this just doesn’t cut it. The whole tourism-vs-good paying jobs debate is old, old news. So is the problem of the Chamber of Commerce types not really wanting unionized plants. There are thousands of well-informed people in our community who know and care about this problem and have been tearing their hair out for years over it.
It seems to me that if you are going to revive this debate, you need to add more to it. I fundamentally disagree with the analysis that minimizes enormous global market pressures. Yes, a plant will be built here or there, but the overall trends are historic. Ignoring these is like the downtown crowd thinking that THEY are responsible for the revitalization of Asheville in the 80s and 90s, when you could not have stopped it if you tried, the market was so strong.
HOWEVER, disagreement on that is less important than what you do about jobs now. I am STILL waiting for concrete ideas from someone. It seems to me they include (in no order): green businesses, high-tech niche industries, construction-related jobs (sorry) and health care (obvious, and maybe they’re about maxed out anyway). And yes, it seems as though we have a very lame industrial recruitment sector here (though the critics should be zeroing in on what they’re doing wrong specifically, not whispering about elites).
At any rate, I’m no expert, and, like most people, my interest in your subject will wane shortly if there are no specific, innovative ideas offered. It’ll get boring fast. Surely, someone can contribute something really smart here…
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July 18th, 2010 at 2:00 pm
Was just in Charleston; they’re getting a Boeing facility.
http://www.postandcourier.com/news/2009/oct/28/boeing-picks-charleston/
Anyone from our economic development down at Charleston or researching what sort of satellite companies follow a facility like this with s[in-off businesses? Seems to me it would behoove the people paid to seek business development would be sniffing around and attempting to promote this area for those spin off type businesses. With our quality of life advantage and all. Charleston is only four hours away.
July 18th, 2010 at 2:29 pm
Dixie, I’ve been asking how much parts spinoff we get from BMW, just 90 minutes away.
Leroy, The first problem is lack of leadership. That’s why decisions to focus primarily on tourism matter. Unless there’s first a shift in emphasis, there won’t be a redirecting of resources.
Other areas where I work wouldn’t let manufacturing go: Greenville-Spartanburg, Raleigh, Charlotte, Charleston and Savannah (both big tourist towns). And Rome, GA? Not even a good connection to the interstate and a podunk airport. What are they doing landing 1,000 manufacturing jobs in the last ten years in the face of powerful historic pressures?
WNC decided to focus on areas where where we supposedly have a “competitive advantage.” This is from Advantage West’s last (2004) development plan.
Where is the emphasis? Right where Mr. Woodcock said they told him it was back in the mid-1990s. “Wages remain low.” Go figure.
If you’re new here, you’ve missed a few past posts on the subject. I’ve been offering ideas here for awhile. The problem is in building an audience — particularly among the movers and shakers — for charting a new course.
I’m working on taking that up a couple of notches, including press, phone calls, direct investment and lobbying. Like I said, stay tuned. Or jump in. My spare time is limited.
UPDATE: I almost forgot a seriously good, idea-filled comment thread on the topic here. Lots of good ideas, but as firelady said, “what is missing is prioritization and action.”
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July 18th, 2010 at 9:04 pm
Tom, I read the past strings you provided, and I was impressed. You have not only offered a lot of substance, but you’ve been doing it for a while. (Just not in that op ed
)
I went back and read your AC-T opinion piece and I don’t think it does justice to your perspective. I think that making retail out to be a problem and affordable housing out to be treating the symptom is a little off the track and not helpful. Neither is causing us to lose jobs (quite the opposite) and neither is causing us to care more or less about getting jobs.
My humble opinion is that you should not let your eye off the ball: industrial recruitment, in the narrow and broad sense. Gordon? How hard can it be to hold the usual suspects accountable, once and for all? There’s a lot at stake here.
Maybe the process of holding them accountable would also help answer the question Nathan Ramsey raised, a question I think is critical and which was not really answered on this blog. Ramsey defends the recruiters by basically arguing that this community as a whole is unfriendly to development, and therefore is not competitive with communities that are, say, capable of building a highway without a decade of culture wars. He is saying that they can’t DO their jobs well, because the community they’re selling is not one the employers are buying. I suspect he has a point. Maybe that’s why so many are fixated on “green jobs”… because they believe that THOSE are employers who would be enchanted with us and our coffee shops and drum circles, unlike those square Chamber of Commerce types, who would actually live in the upstate. And maybe that’s right too.
Gordon, this guy Tom is one of your Hooligans, right? Is he off base or not? Why not try something radically different as far as recruiting industry? Everybody knows how tired the usual suspects are, but nobody does anything about it.
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July 18th, 2010 at 9:47 pm
“Dixie, I’ve been asking how much parts spinoff we get from BMW, just 90 minutes away.”
Yes, but…it was 12 to 15 years ago that BMW came to the upstate and a slew of spin-offs followed suit. It made the upstate the nationwide highest in job gains for a fair amount of time.
I’m saying, how can we attract spin-offs to Boeing or other Companies that need to be near, but not too near. Why can’t we use our “quality of life” aspect to lure some here??????? Anybody looking into why we can’t???
July 18th, 2010 at 10:11 pm
That’s the $64,000-a-year question, isn’t it? If somebody is not looking into it, maybe they’d better start. I have e-mail and phone traffic asking why we can’t just hire a new set of somebodys.
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July 18th, 2010 at 10:24 pm
I was trying to make the point a while back that we are not as unified as some other communities in what type of businesses that we want to expand/locate here. I don’t think anyone would debate that.
Because of macro economic factors (like globalization & productivity growth), these projects are more competitive than ever. If a site consultant was comparing say Rome GA, Spartanburg SC and Asheville (many searches begin electronically and often communities never even know they were considered), they would find lower cost of living (starting with housing prices) and more of an unified community effort.
This is definitely a discussion worth having because with the Great Recession, we are probably all facing a new reality and communities as well as families must make some fundamental decisions on where they are headed. We are blessed with a diversified economy with healthcare (it will continue to grow because we are all getting older), tourism (we have over a century of luring those from all over the world to these beautiful mountains), manufacturing (mfg. still employs over ten thousand in buncome with much higher than average wages and despite all the negativity there are still local mfg. employers who can’t find skilled workers) and thousands of entrepreneurial small businesses. However, each of these sectors all face significant challenges and helping high skill jobs (if they aren’t high skilled there is probably some place in the world willing to work cheaper than we are) expand is the best medicine to treat our affordable housing, under and unemployment, healthcare, transportation, tax burden, etc. ills.
Going back to our local economic development folks, I never in eight years of working with them saw or heard anything that would indicate they weren’t enthusiasitic and passionate about helping our local mfg. companies expand and recruiting new firms to the area. I did hear some in the community question why are we trying to recruit industrial companies (that’s old school) and for criticism to be directed at ED staff members who were thought to be too laser focused on industrial development. At the end of the day it’s all about money, some are hard cost like such as site cost, labor cost, other
costs specific to the company, etc. and others are more qualitatitive factors such as quality of life, etc.
Another factor to consider, we spend through the TDA over $5M per year (public money generated by the room tax) to grow our tourism sector, and if you add the total spent to help local companies expand/recruit new firms by the county, city, and chamber it would add up to around $1M (excluding incentives). The TDA investment has been good for our community but we don’t have a similar revenue source to fund industrial growth (current local funding comes out of the general fund which is financed by ad valorem and sales taxes).
July 18th, 2010 at 10:44 pm
Welcome back, Nathan, and thanks for that input on revenue. I’m anxious to see what effect this [Bill to boost domestic manufacturing OK’d] will have on the issue. The L3C (Nathan, see MOOMilk) is very new (it’s called a Community Interest Company in England), but it passed both houses in Raleigh with a single No vote.
I’m already looking into plans being made to use it for reviving some existing facilities in Burke Co. Still early, though. (But too late for me to be doing more of this tonight.)
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July 19th, 2010 at 3:11 pm
Great conversation, everyone. Ben Teague of the Economic Development Coalition sent me this information and invited me to share it here:
(Last thing for now – Leroy, everyone who contributes here does so with complete editorial autonomy. No one here is “one of my” anything! Scrutiny Hooligans is a group blog, and every opinion here is that of the writer.”
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July 19th, 2010 at 4:01 pm
FWIW – http://video.forbes.com/fvn/bizplaces09/best-places-for-jobs-business
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July 19th, 2010 at 7:07 pm
Serious puzzlement. So are we or are we not in a good job climate????? Forbes seems to think we are.
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July 19th, 2010 at 8:04 pm
The accolades from Forbes, Site Selection, and others for NC are very much appreciated and I will continue to defend the EDC, NC Commerce, and Advantage West staff for their efforts. I would say the same thing to them now that I did two years ago when I was in public office, we have not been as successful as I and many others would like in recruiting new companies to the area. In the eight years I was in office, Jacob Holm was our largest new company with an investment over $60M and around 120 jobs. I would hope we could recruit more companies at a similar investment and wage rate.
We had many expansions and job number one is always to work to help existing employers grow. Before September 2008, the greatest challenge we faced from ’03 on was workforce skill gaps; finding skilled labor for existing businesses who were paying $15/hour plus with benefits. Today with our unemployment rate doubling we face different challenges.
I question whether we are as focused as we should. Affordable housing, transportation, healthcare, education, environment, etc. are all important and all play a vital role in community building but at the end of the day the best welfare check, subsidy, stimulus plan is giving people the opportunity to provide for themselves and their family. In my opinion, the effort behind the Asheville HUB was to give us a better competitive advantage. We probably haven’t seen huge concrete results, but that’s what our federal, state, city, county, chamber, and other leaders are working on and we all need them to be successful.
This was a challenge for our community 25 years ago when I was in high school and it’s still a problem today. Many of our young people leaving for school and not returing because they couldn’t find a comparable job in WNC. WNC has many great assets, our economy just seems to persistently lag where we would like it to be. We should never become consumed with negativity because many good things are happening but like AA, we first must be candid with where we are and where we want to be and the numbers show area incomes (especially median family income and avg. wage per job measures, we tend to do better on per capita income) falling further behind state and national averages.
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July 19th, 2010 at 9:50 pm
We do better in per capita income because of the large percentage of income derived from rental, retirement, and investment income. It’s not in paycheck income which, as hourly wage earners know, is correspondingly less. (I’ve been tracking those BEA numbers for a decade.) It’s the old, “Bill Gates walks into a bar…” story.
Nathan’s right about there being a somewhat negative attitude towards industry here in some circles. The thought experiment in my Sunday piece was aimed directly at those people, to show how out-of-date the mental image of industry is. I often wonder if some of the reasonable sounding objections you hear aren’t simply a cover for “We don’t want them here.”
It’s funny, but people tend to see themselves singled out in the criticisms I have leveled, but the core problem, as I see it, is a collective one. We urge employers to pay a “living wage” so people who are not getting by can barely get by. We want to provide You-Know-What so people in low-wage jobs will get by more comfortably in their low-wage jobs. We don’t have enough land to attract better-paying industrial development, but we have enough industrial land (BASF) to attract retail development, arguing that it will be good for the area because it will create (more low-paying) jobs. How we create a higher standard of living for working people gets short shrift in the public discussion.
The phrase “soft bigotry of low expectations” almost captures it.
At the end of the short bio of former Greenville, SC mayor, Max Heller, he says, “the bottom line is Greenville will always come through. You can make it here. You can succeed here.”
As well-intentioned as our efforts are, the meta-message behind them, one which people don’t seem to see, is:
We can do better.
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July 20th, 2010 at 12:18 am
Oy vey! Such diplomacy from the politicians. The recruiters are defending themselves with statistics?! They’ll clean your clock, Sullivan, if that’s the ring you fight them in. I hope you step up your game. Stay focused and don’t stop until one of you is down for the count. This mincing around is not worth the price of a ticket.
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July 20th, 2010 at 7:21 pm
Nathan and Gordon, one of my calls was from a guy who had lived around the country. He said he had retooled a number of Chambers of Commerce. He shared my frustrations, of course. He observed that we have little development groups tripping over each other here.
Question: Who really sets the tone and the agenda for marketing the area? City, county Advantage West? For example, Advantage West’s posted 5-yr plan is set to expire. Presumably, a new one is in the works. Who decides that our regional priorities for the *next* 5 years are promoting tourism, building second and retirement homes, and arts and crafts? Who do we petition about setting our sights a bit higher? (I’ll worry about the resources later.)
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July 20th, 2010 at 10:48 pm
Gordon can give you a better perspective than myself because its almost been two years since I’ve been involved. For Buncombe County, I’d say the EDC takes the lead, especially when we are talking about industrial type prospects. The EDC is truly a partnership between the city of asheville, county, and chamber (private sector). The county (which includes Asheville city taxpayers) provides the bulk of the funding followed by the chamber and city. Advantage West and NC Commerce are housed in the same building at the airport and work together on a daily basis. With most expansions and new prospects, all of these groups will be sitting around the table along with AB Tech and other partners including maybe other local governments depending on the needs of the business.
Some leads come through Raleigh, Commerce and Advantage West while others are locally generated. Advantage West must cover 23 counties while Commerce covers the entire state. On a large project all of these groups are important because state and local incentives will be involved as well as workforce training, etc.
As far as the regional priorities, I’d say that was part of the justification for the HUB, to create a strategic plan of creating high paying jobs in the area where we have a competitive advantage. Advantage West, Chamber, city, and county leaders all sit around the table with the HUB along with UNCA, Mission Hospital, and others. The basic idea is that Asheville is the hub for WNC and how can we leverage our region’s unique assets to grow high paying jobs. One aspect of the HUB is how we can grow our creativity cluster which would include arts&crafts as well as tech innovation,etc.
TDA focuses on tourism development. No one focuses on drawing folks for second homes and retirement homes but as long as WNC is a desirable place to live with outstanding medical and other resources, that trend will continue. No incentives needed there.
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July 21st, 2010 at 8:39 am
Tom,
I’d say Nathan’s got it right.
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July 21st, 2010 at 2:26 pm
Mnfctrrs dn’t wnt t b hr prcsly bcs thr sn’t ngh hsng fr th wrkrs. f th Mnfctrr cn py lss t wrkr wh cn chv th sm lfstyl fr lss vr n Jhnsn Cty, bcs tht wrkr s pyng lss fr th sm sz hsng nt, thn why n rth wld th mnfctrr wnt t cm t Bncmb?
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