The work of the future

Now it’s our turn. We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit and reform our government. That’s how our people will prosper. That’s how we’ll win the future. —President Barack Obama, State of the Union, January 25

That Obama and his speeches—he always makes it sound so easy. A little innovating, educating, and infrastructure building, and we’ll win the future. Simple as that.

Or not. What does it actually mean for greater Charlottesville to win the economic future? What kind of prosperity are we heading toward, and how good is our map? How do we keep from getting lost in an economic thicket the size of Detroit?

Many of the answers unfortunately lie with national leaders, who are doing such a hot job that we’re on the brink of a government shutdown. So what can we control locally?

We’re probably not the next Detroit, but there’s still plenty for us to fret over. Within the local context, the debate involves anxieties about sprawl and the value of blue-collar work.

Charlottesville’s great fortune is undeniably the University of Virginia, which means that our major sectors—education, health care, and, increasingly, defense intelligence—aren’t going anywhere anytime soon.

All appear to be, if not booming, at least growing steadily. The University plans to expand by 1,500 students over the next five years, provided it’s aided by the state as promised. The current student-to-employee ratio is about 1 to 1, which, if perpetuated, would mean new jobs for professors, administrators and other support staff.

In health care, the aging baby boomers almost certainly mean nurses and doctors will continue to be in high demand, too—the state’s 65-plus population is projected to increase from 13 percent today to 16 percent by 2020. The way health care reform plays out will likely dictate how the industry changes, but the field is certainly not in danger of going away.

And barring an outbreak of world peace, Charlottesville’s burgeoning defense intelligence sector should flourish over the next decade. About 350 of the new Defense Intelligence Agency employees are already here, with 650 more coming by September. A steady “contractor tail” of related private businesses like Booz Allen Hamilton will likely grow ever bushier.

Those three sectors will continue to be our bread and butter, and for the most part, that means lots of high-paying jobs. Yet many in the workforce of greater Charlottesville—meaning the city and the counties of Albemarle, Nelson, Fluvanna and Greene—don’t have access to the good jobs in those fields.

Jobs get the usual lip service around here, but government action on the subject often smashes into the standard local divider, growth and its ugly step-cousin, sprawl. More jobs often means more people, particularly in a place like greater Charlottesville, where the unemployment rate is typically low—currently around 5.2 percent—when compared to the rest of Virginia and the U.S.

That’s what makes Michael Harvey so special. Since arriving in Charlotteville four years ago, Harvey, president of the Thomas Jefferson Partnership for Economic Development (TJPED), has cut across the growth issue by focusing on those who live here now—trying to figure out the skills of current residents compared to the jobs available in greater Charlottesville. He’s trying to ascertain why 11,000 commuters a day are leaving the area for Richmond, Culpeper/D.C., and the Shenandoah Valley.

Increasingly, he’s focused on those left out of our steady sectors. He’s most troubled by the area’s shrinking proportion of blue-collar skill jobs.

“A lot of people see me as a tool of developers, housing,” says Harvey. “We have nothing to do with it. I’m focused on that [skilled trades] wedge, that’s my biggest focus.”

We’re not necessarily losing our middle class, says Harvey, but what the middle class does for a living has shifted. Since 1990, middle class white-collar jobs (think office staff and salesmen) have gone from 34 percent of the workforce to 41 percent. The opposite has happened to blue-collar skilled trades, which have dropped from 27 percent of the local workforce in 1990 to 16 percent today. In many instances, the skilled trades actually pay more than white-collar jobs, and fewer of them require a college degree.

Many of those jobs were in manufacturing, where jobs disappeared across the country. But Harvey points out that it’s because we’ve gotten more efficient—the U.S. is still the largest manufacturer in the world, producing 20 percent of the globe’s manufactured goods, down only 1 percent from 1990.

“There are other sectors in that, like construction, like trade, transportation and warehousing that have grown with the global economy,” says Harvey, “but they haven’t grown here, and that’s something that is concerning to me. Are we doing something to put a cap on it? Are we doing something to discourage that?”

Often, politicians and business advocates talk about jobs as if they were completely interchangeable. One-hundred new jobs at DIA—rah rah! Fifty new jobs at State Farm —rah rah! Thirty new jobs at Wal-Mart—rah rah! But the people who can be hired for those jobs are rarely interchangeable. A defense job requires a security clearance, no small chore to obtain. A State Farm job usually comes with its own training, and is usually open to a wider range of potential employees. And the Wal-mart job probably requires few skills but also doesn’t provide much pay or opportunity to advance.

“What you have is an economy that’s running away from a lesser educated population,” says Harvey. The threat is a perpetual underclass, a place where the rich play and prosper while the working class hovers near financial disaster. A new Weldon Cooper Center report shows that while only 10 percent of Central Virginia families technically live in poverty, 25 percent are “income inadequate,” meaning they don’t make $39,500, the amount the Center calculates a four person household needs to be self-sufficient in our area.

In order to remain in the middle class, those without credentials for professional or white collar service work have to chose: drive to somewhere else, get more education, or fall into a lower-paying job.

“When Hyosung Tire plant closes, and you’ve got a guy who’s been working on a shop floor for 30 years, what are the chances of him becoming a radiologist?” says Harvey. “He’s probably going to be looking at driving elsewhere first. Then he’ll look at re-training. But some of them may end up in lower-wage occupations.”

Beyond our bread and butter sectors, what’s grown locally over the past 15 years have been government jobs and hospitality. While private sector jobs have increased 21 percent since 1995, public sector jobs have grown 35 percent. That includes UVA and NGIC, state and federal employers, but local government has grown more, by 37 percent over that period.

“There’s a blessing and a curse to that,” says Harvey. “There’s the tax issue that comes along with that when you’ve got a public sector employer that is growing. Is this really going to pay for itself?”

As for hospitality, Harvey also wonders if it’s sustainable. “We’re all for tourists coming here, spending their money, and going home, but it does drive job growth at the low end, and we have to ask the question, does it really pay for itself if you’re basically maintaining a permanent underclass?” The percentage of those in the lowest rung, blue-collar service, has remained roughly constant over the past 15 years, hovering at 30 percent.

Harvey points out that, as of 2007, 95 percent of those using government-funded social services were employed.

“It should be my job to give those people an opportunity to get up and out, and if I’m contributing to that issue, maybe I need to re-think my economic policy.” 

There’s very little that Harvey—an employee of a nonprofit partnership—can do by himself. What he can do is gather data on the problem—along with potential solutions—and present them to local government.

When it comes to the skilled trades in particular, there are broadly two ways of tackling what has to happen—improve education options and grow blue-collar skilled trade jobs.

Generally, Harvey thinks we handle the education side here almost as well as anyone. In terms of K-12, “You’ve got two superintendents here who are really on the ball,” says Harvey. Piedmont Virginia Community College has proved adroit at creating specialty classes when businesses need them, and it has done particularly well at filling an education role for the wine industry and, increasingly, the defense sector.

Still, it’s not always easy to get kids into classes that will prepare them for the jobs that actually exist. Charlottesville Albemarle Technical Education Center (CATEC) provides vocational training for both the city and county public schools to about 370 students. While CATEC has started offering classes in green building and geospatial technology, which suits the defense sector, demand isn’t as strong as it is for culinary arts and automotive classes, where job placement is more difficult.

Moreover, high school vocational tracking is a delicate matter, historically seen as siphoning poor or minority kids off the college track. Since more and more jobs will require college skills, a strong current of thought suggests educators should focus strictly on college prep rather than blue-collar skills.

Still, race and class remain broad signifiers about who’s on the college track: Among Charlottesville High students taking the SAT in 2010, only 22 percent were African American even though blacks comprise 44 percent of the student body. In Albemarle County schools, 33 percent of white students take an AP class, yet that’s the case for only 9 percent of black and 8 percent of students classified as economically disadvantaged.“I just don’t think that’s realistic,” says Charlottesville Mayor Dave Norris, who strongly agrees with Harvey’s focus. “Maybe in some highly educated, affluent parts of our country, you can set an expectation that 90 percent-plus of your young people are going to go to college. I don’t think that’s a realistic expectation for Charlottesville, for our region. And I’m O.K. with that.”

Even high school graduation remains skewed along similar lines. Though graduation rates have improved at Charlottesville High, disparities are still telling: 88 percent of white students graduated on time in 2010, but only 75 percent of black students. Seventy percent of students who are “economically disadvantaged” graduated on time versus 92 percent for those who aren’t.

Those numbers are borne out by statistics on education level and unemployment. In the City of Charlottesville, 53 percent of whites 25-years old and up had a post-secondary degree; for blacks, that number was 12 percent. Thirty-five percent of blacks had no high school diploma, which was true for only 15 percent of whites. From 1997 to 2006, blacks averaged about 22 percent of the city population but 53 percent of its unemployed, according to numbers Harvey provided.

“We used to have a stronger black middle class,” says Norris. “It’s not nearly as robust today. Part of this has to be growing, attracting and maintaining people of color in our workplace.”

And for Norris, that also ties into increasing the options in the skilled trades workforce. On that front, Norris readily admits that the city hasn’t always taken an active role in providing skilled trades jobs.

“I think the skilled trade, the manufacturing, has to be front and center,” says Norris. “We’ve got more work to do to convince the powers that be to make that a higher priority.”

Norris, who is presumably part of the powers that be, says one option is for the city to build a business park—buy land and provide a malleable space that burgeoning businesses can lease while starting up.

It’s an idea borrowed from Harvey, who saw it succeed in Knoxville, where he worked before moving to Charlottesville. While in Knoxville, the focus was on high tech jobs, a Charlottesville business park could help create “flex space,” for small industrial employers.

“People don’t really fit into a neat box any more,” Harvey says. “There are certain spots around town that make me wonder, why aren’t they doing that?”

As an example, he points to the re-use of the Comdial building on 29 North. The former telecommunications office has been chopped up into several suites for smaller outfits like Vamac, a plumbing supply company, and TransDigital, a digital document service.

A Charlottesville business park is among the more grandiose ideas. Overall, Harvey thinks the task of increasing jobs opportunities for those without college degrees involves a lot of small stuff.

“There are no real outstanding, brilliant ideas,” Harvey says. “It’s a lot more about blocking and tackling to accommodate the kind of economic development that you want.”

Part of the problem will be maintaining solidarity across the local government line. The struggle to maintain a tax base can lead to regional infighting, as has long been demonstrated by the conflicts between Charlottesville and Albemarle.

Since the 1960s, the city has lost asset after asset to the county, as employers and retailers moved operations to the fresh dirt outside city limits, newly accessible thanks to the proliferation of the automobile. State Farm’s operation center started on Emmet Street in 1950 before moving to the county in 1972, a trend followed more recently by major employers like the National Ground Intelligence Center and, this year, Martha Jefferson Hospital. The Downtown Mall owes its existence to Charlottesville’s desperation to remain relevant after Main Street’s businesses fled to 29 North. The Omni arose thanks to government money for so-called urban renewal and as the city competed with the county’s DoubleTree for hotel and conference space.

Competitive spirits flared recently, over the city’s use of tax incentives to lure WorldStrides, a student-travel company, to the city. WorldStrides will anchor the Waterhouse building that’s going up on Water Street, just off the Mall, thanks to an incremental tax plan that allows the developer, Bill Atwood, to reap 50 percent of any increase in area taxes after Waterhouse is built.

That’s fueled contention between city and county officials, already hot over infrastructure issues and revenue sharing. Supervisors Ken Boyd and Dennis Rooker both questioned the move, arguing that stealing employers back and forth across locality lines doesn’t help grow the economic pie.

Norris brushes it aside. “It’s a tiny amount of money in the grand scheme of things,” he says. “Really I see that as leveling the playing field. It’s more expensive to build new development in a built up urban area than it is out in the suburbs.”

“I don’t think I was so much upset about that as much as wondering if that’s the right use of tax dollars,” says Boyd. “I think there’s plenty of room for growth in both the city and the county.”

Still, the WorldStrides issue represents a larger one: should local government offer incentives at all to encourage businesses to relocate or start-up in greater Charlottesville?

“In upstate New York, you have to stuff money in people’s pockets,” says Timothy Hulbert, president of the Charlottesville Regional Chamber of Commerce. “We don’t really need to do that here. The best economic development program is a program of low taxes and reasonable regulation.”

For Hulbert, reasonable regulation and welcoming go hand in hand—a willingness to work with businesses that want, say, a building 20 feet taller than zoning allows. To that extent, Albemarle County Supervisors have approved an “economic vitality action plan” that encourages, among other things, streamlining of development review and zoning issues.

Boyd helped lead the charge, and he overall favors a “get government out of the way” approach to job creation similar to Hulbert’s vision. “I’ve not said that I want to lower the bar on regulation. What I want to say is, let’s figure out a way to expedite it,” says Boyd. “Why does it take a year to two years to get site plan approval?”

What will come of the economic action plan remains to be seen. “One person’s streamlining is another person’s elimination of protections for the public,” Rooker says.

But much of it does focus on increasing opportunities for residents currently without “good jobs,” and it’s a testament to Harvey that he’s gotten both the county’s Boyd, a conservative Republican, and the city’s Norris, a liberal Democrat, to agree on the need to focus on blue-collar skilled trades. The county voted to contribute to a $25,000 consultant study that Harvey is commissioning to figure out the most appropriate target industries for job growth.

Still, Rooker (an independent) is not completely sold on the idea that the region should focus on adding skilled trades jobs more than, say, high tech jobs. Nor does he completely share Hulbert’s vision of a business-friendly environment.

“People want to come to a place because it looks good, it’s healthy, it has good schools,” says Rooker. “Sometimes this focus on a government going out and trying to sell somebody on coming to the area is not necessarily a better investment than focusing on providing infrastructure and the regulatory framework that helps make a community a good place to live, and I think that helps attract business.”

Infrastructure was part of the triad that Obama preached in the State of the Union, and compared to most communities, greater Charlottesville has put a lot of thought into roads and water supply.

The problem is action. On top of years of declining state funding, local consensus is elusive, as the issues—over the Meadowcreek Parkway, over the water supply—usually stem from the debate over growth and sprawl.

“I’m not particularly interested in infrastructure that’s going to facilitate suburban sprawl,” says Norris. “I think that’s where the divide has been, is, and will be.”

City Council and the county Board of Supervisors recently came to grudging agreement over the height of a new dam at Ragged Mountain Reservoir, the first step in expanding the water supply to meet current and future needs. But when it comes to consensus over water supply and roads, the norm is instability—the prime exhibit being the 40-years-in-the-making Meadowcreek Parkway, simultaneously under construction and facing a lawsuit.

Harvey thinks that, over the years, the growth wars have unintentionally squeezed out skilled trades jobs.

“It’s like physics, there’s a reaction to a reaction,” he says. “And if you take some of the steps that you’ve taken here over the past 25 years, people with less education are going to be effected by it. And to ignore that is something that we ignore at our own peril.”

The problem with predicting the future is that it is, well, the future.

There are many things we just don’t know. Hulbert likes to recite a stat he heard from a consultant.

“He said in 2009 that 50 percent of the new 2014 jobs in the economy haven’t been invented yet,” says Hulbert. “We’ve got an Academy Award-nominated film about Facebook—five years ago, what’s a Facebook?”

Among anxieties about tomorrow is whether we’ve got the right anxieties. In worrying over improving the lot for those without college degrees, are we like a homeowner shoring up his locks against petty theft when a hurricane is about to strike?

Last month, I grew uneasy watching Watson whip “Jeopardy” geniuses Ken Jennings and Brad Rutter. In the aftermath, philosophers and computer scientists reassured us that Watson still can’t think, that it’s just a bulky computer rigged to parse riddles using statistical probability. They pointed out Watson’s incapacity to understand a category when answering Toronto for a final “Jeopardy” question about “U.S. Cities,” a mistake no human would make.

I was not reassured. The hardware required several rooms and cost $3 million. Nevertheless, if an IBM team can build such a machine, it seems only a matter of time before processing efficiency increases, technology costs decrease and Watsons appear in virtually every information field, replacing many of the white collar workers whose jobs haven’t been shipped overseas. I started imagining Call Center Watson, Lawyer Watson—just after the show, IBM crowed that it’s already developing Doctor Watson, or at least Medical Textbook Watson. How long until Journalist Watson, who will compose in eight milliseconds a thoroughly researched 3,000-word article after only a few keywords entered by clumsy human hands. Might the newspapers of the future involve just one person, who simply points Journalist Watson in the right direction and looks over his shoulder to double check whether Toronto’s a U.S. city?

The day after Watson’s triumph, I visited State Farm’s operation center on Pantops. State Farm is one of Charlottesville’s largest private employers, with about 1,500 jobs that mostly fall into the “good jobs” category, jobs that pay a living wage and have seemed unlikely to go away. There’s room at State Farm for people without college degrees, and there’s room for many to move up. In addition to its own training, the company offers tuition credits for those pursuing higher-ed. It’s an employer almost no one can argue with—Hulbert told me that “we need another State Farm.”

But might not those State Farm jobs, and their proffered pathway to the middle class, disappear just as similar blue-collar jobs did?

I toured State Farm, with its maze of cubicles and echoes of human conversation, guided by a young P.R. rep, Amy Preddy, who felt fortunate to land her job a few years ago after graduating from James Madison University. She proudly mentioned that Charlottesville is home to the company’s longest-tenured employee, Earl Wood, who works as an underwriter after 51 years on the job.

About 60 percent of its employees work in claims, handling the calls of those unfortunate customers who need assistance. Claims employees have to quickly advise people in distress about procedures that vary state to state. It can be a lot to keep up with. A Claims Watson might need some extra programming in order to handle distressed customers, but on the knowledge side, it could master the complexities of state-by-state regulations in a few nanoseconds.

Is it possible, I asked Preddy, that the bulk of State Farm jobs might eventually lose ground to a computer?

“I don’t think that’s anything we’ll see in my lifetime,” laughed Preddy. “I don’t think a robot can replace a person. That personal connection and that personal touch are very important to our customers.”

And with that, she told me about some of the technical advances over the years. Mail, once hand-delivered by people pushing mail carts through the 367,000 square foot building, now gets handled on an endless loop. Who does the work? Two robots, Oliver and Milton.