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Where The Jobs Are…

By Vince Winkel, posted Jan 27, 2017
Unemployment is low in Wilmington, and companies large and small have openings to fill. But while there are jobs in the high-paying and low-paying sectors, there seems to be a gap in the middle. (Photo illustration by Nina Bays)
On the surface, job growth in Wilmington is strong.

The unemployment rate in all three area counties is essentially a full percentage point below where it stood a year ago, with New Hanover County the lowest at 4.4 percent. According to the N.C. Department of Commerce, about 5,000 more people are working in the Cape Fear region than a year ago.

But beneath the surface, there remain questions. Is job growth here equal across the board, or are there disparities that paint a different picture?

“It’s true nationwide and for North Carolina,” said Michael Webb of the UNC Center for Urban and Regional Studies. “You are seeing a lot of job growth at the upper end, particularly in industries like finance, education, health care, and then you are seeing job growth at the lower end as well, in service professions – waiters, restaurant jobs, hospitality jobs.”

That appears to be the case in Wilmington as well.

“Wilmington has a large tourism industry, with restaurants, shops,” said Michael Walden, N.C. State University economist. “Of course any industry and any job is valuable, but the fact is as a whole the tourism industry has low wages. While this may not be a concern for students and entry-level workers, it does make the low-wage sector somewhat larger in the Wilmington region.”

Walden is forecasting that the Wilmington MSA unemployment rate, which today is hovering around 4.5 percent, will be down to 4 percent by December.

The numbers seem to bear that out. In the fourth quarter of 2016, according to the state commerce department, New Hanover Regional Medical Center had the most job openings in the region at 329, followed by University of North Carolina Wilmington with 132. That was followed by a pair of food service and support services companies – Compass Group and Aramark – with a total of about 200 jobs. Lastly according to the N.C. Department of Commerce, the state had 89 jobs open in the region, followed by Harris Teeter, at 86.

“You are seeing really large growth in education jobs, health care jobs,” Webb said. “You are also seeing a lot of growth in your hospitality industry and service industries as well.”
Webb said the trends are worrisome.

“I think there are damaging effects to this shift to what I call a bifurcated job market, where you have got some jobs at the top that pay very well but require a lot of skills, a lot of education, and these jobs at the bottom that pay very poorly, that don’t require skills or education,” Webb said.

“The trend of the middle-wage jobs disappearing has been around for some time,” said Adam Jones, an economist at UNCW. “Routine-cognitive and routine-manual jobs are being disrupted by technology at a higher rate than other activity classifications. Non-routine jobs, both analytical and manual are more difficult to automate and are seeing less disruption.

“The explanation for the slowdown in middle wage job creation in the region isn’t yet clear,” Jones added. “It could be an acceleration of automation or it could be the nature of the recovery and lags in certain industries. To the extent it’s the latter we could see a pickup in middle-wage job creation in the future.”

Jones explained that there are several factors at play.

“For example, construction employment is still down considerably from where it was pre-recession, a significant chunk of the missing middle-wage jobs, and we haven’t seen much growth in others such as professional, scientific and technical services. However, we picked up employment in health care services.

“The reasons for these shifts in employment growth patterns aren’t clear but likely have to do with the nature of our development. Wilmington’s growth period corresponded to the national housing boom magnifying the effect here and now the composition of employment is shifting from community growth to providing services to the new residents,” he said.

Staffing professionals, however, believe they are seeing some signs of improvement for workers in the Cape Fear region.

“When they say middle jobs, middle-paying jobs, that’s right in line with what I place,” said Alexis Hinds, owner of Sea Coast Staffing in Wilmington.

Hinds places staff with large companies, startups, smaller companies and the service industry and hospitality.

“We have seen an expansion in jobs and in pay rates. We have seen pay rates get pushed up over the last six to 12 months,” Hinds said. “Our candidates are demanding more, and our clients are paying it.

“I am optimistic,” she added. “Last year we saw a big jump in our direct hire because unemployment was low and quality staff was in demand. Our clients were very interested in direct hires rather than the temp-to-hire. I see the market going the same way this year as well.”

Others, however, are not quite so bullish.

“You need a lot more education to have a shot at a job that pays a living wage. And there is no guarantee you’ll keep that job for your entire career, with the pace of technological change,” warns Patrick McHugh, an economic analyst with the N.C. Budget and Tax Center, a division of the progressive research and advocacy group N.C. Justice Center.

“It’s not just a question of the fact that we’re getting this bifurcation in wages, it’s also a problem because a lot of those middle-class jobs that have been disappearing are things that you didn’t necessarily need a ton of education to get into them,” he said.

McHugh said the future needs a workforce training system that assumes just about everyone is going to need updates on what they do, and increased education, to keep pace.

“Particularly when we look at automation,” he said. “There is every reason to believe that the automation that is going to happen in the next 20 years is only going to exacerbate this trend. The first wave of automation happened in manufacturing, automating physical processes. Now what we are seeing is that we are increasingly automating cognitive processes. A lot of the jobs that have a threat from automation, are often in the middle-income range such as drivers.”

Moving forward, Scott Satterfield, CEO of Wilmington Business Development, said the solution is clear.

“Diversification, diversification and diversification,” Satterfield said. “Nature blessed us with a great tourism economy, whose total impact goes well beyond just wage figures. But clearly we need more than that. Manufacturing, given its high wages and extensive supply-chain demands, is a powerful economic engine for the region. There is room for that sector to grow, but that takes work. We have to showcase our workforce, infrastructure and technical assets, which are extensive.

“Logistics and distribution is another sector to watch. Jobs in that line of work don’t pay quite as well as manufacturing, finance or I/T, but then again they don’t require such extensive skill sets,” he added.

“As for solutions, that’s a tough question,” said economist Jones of UNCW. “We need to accept the reality of change and technological innovation and be training our students, and even current workers, to think creatively and be competitive for the non-routine jobs. The days of doing repetitive work for a good salary are gone or going away.

“And we as a community need to provide an environment that is attractive for high-wage jobs. This means having proper infrastructure, a smooth permitting process and thinking beyond just manufacturing.”

The devil is in the details though, Jones added.

“Infrastructure includes not just water and sewer but also internet connectivity, speed, reliability, airport services, interstate access,” he said. “We need physical space for startups to use and resources to support their efforts. This includes training options but also funding networks such as community banks and venture capital. Yes, Wilmington is a nice place to live, but there are other nice places competing with us.”
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