Regional issue: talent shortage
Bill Flanagan, right, talks with Lynn DeHaven, vice president of the board of Washington County Council on Economic Development, following the council’s annual meeting Friday.
This photo was taken in January after the Washington County Tourist Promotion Agency moved out of the former train station on South Main Street in Washington and relocated to Southpointe.
MEADOW LANDS – Washington County and the rest of the Pittsburgh region are doing well, economically speaking, with employment numbers now higher than when the region’s steel industry peaked in 1979.
While Allegheny County leads the region in business investment, Washington County is No. 2 in the category, and across the region there are 26,000 jobs available.
While Bill Flanagan said those kinds of facts are cause for celebration, he cautioned against breaking out the champagne anytime soon.
Flanagan, executive vice president of Allegheny Conference on Community Development, was keynote speaker at Friday’s annual meeting of Washington County Council on Economic Development. While bearing good news, he also urged those in economic development to adopt a long-term view toward overcoming some challenges the conference’s research had identified that could eventually snuff out the successes here, if not addressed.
Speaking to a packed dining room of public- and private-sector executives at the DoubleTree hotel in Meadow Lands, Flanagan said when the conference looked at the 10-county region’s employment picture from 1970 through the end of 2013, it noted total employment last year stood at 1,275,000, more than the 1,082,300 who were working when the steel industry peaked in 1979.
He noted when Washington County decided to embark on the construction of the original Southpointe business park in the late 1980s, “we thought you were nuts.” He said the farsighted vision actually made it possible to create enough office space to be available as the economy rebounded and the energy revolution came to the region.
While energy and manufacturing are grabbing headlines, Flanagan said they rank second and third, respectively, as the most active, while the top driver of the economy is the financial and business sector.
“We’re no longer the steel center we used to be, but we’re one of the top financial centers in America,” he said.
It would appear those 26,000 open jobs would be a reason to celebrate, but that’s where Flanagan pointed to caution.
Despite the region’s high number of people who hold associate, bachelor’s and master’s degrees, there is a talent shortage that will need to be addressed in the coming years.
When the conference surveyed energy companies on projected job needs several years ago, Flanagan said, it was estimated the sector would need 130,000 people by the end of this decade.
And while the long population decline created by the loss of the steel industry is finally reversing itself, with growth now seen in Butler, Washington and Allegheny counties, Flanagan said the conference is projecting a deficit of 130,000 people in the 25-to-44 age group in the coming years.
“The whole region needs to make a big hit on educating and training people for the future … before it comes back to bite us,” he said.
One of the ways to fill the coming deficit is to become more welcoming to minorities, a challenge for a region in which 90 percent of the population is white, he said.
“We missed out on immigration,” Flanagan said, noting that while other major regions in the country have populations composed of 13 percent immigrants, the Pittsburgh region stands at 3.2 percent.
“The people who are available (to fill the vacant positions) don’t look like most of the people in this room,” he said.
The region also could do a better job of teaching skills to its black population, which was left out of much of the economic advancement of the past decade, he said.
The conference also is looking to promote jobs in the energy and manufacturing sectors to returning veterans. Flanagan noted the region has one of the highest populations of veterans in the United States despite the fact that it doesn’t have a major military base.
“These are really good times, but they can be a cause for concern,” Flanagan said, adding that anybody working in economic development “should think with as long of a view as you did 25 years ago.”
During Friday’s luncheon meeting, Ray Vargo, WCCED’s member-at-large, reported the council’s Small Business Administration microloan program loaned a total of $963,000 to a wide range of startup and expanding small businesses such as delis, boutiques, grocery stores, coin laundries and sports equipment providers.
WCCED, which was created in the mid-1980s to help revive the county’s flagging economy, now has the Starpointe business park in Hanover Township as its largest asset.
WCCED Executive Director Dan Reitz said the park sold five lots last year, has four more under sales agreements and has four additional sites drawing attention from a number of businesses.
Reitz also announced the council, which has had its offices at 40 S. Main St. for the past 12 years, will move into the former B&O train station on South Main, which it has owned since 1999.
The station was vacated earlier this year when the Washington Tourism Promotion Agency moved to Southpointe.
Reitz said the council and its staff of four should be in the new location by Jan. 1.