The Skills Gap

August 2, 2014 7:30 am

by Jon Richards · 38 comments

If you’ve driven along I-85 in southern Gwinnett County, you have undoubtedly noticed the huge building just south of Jimmy Carter Boulevard. The 170 acre facility opened in 1972, and was once the home of Western Electric’s fiber optic cable manufacturing plant, employing thousands of people in the type of job that provided a decent salary and lifestyle for someone with only a high school education.

Forty years later, the facility had been sold to OFS Technologies, which moved much of its production overseas. The company now only uses a small portion of the facility, and Jacoby Development wants to repurpose the complex into a movie studio known as Atlanta Media Campus. I got a tour of the facility a few weeks back, and saw where some of the Walking Dead and Hunger Games movies were made. It’s large enough to support the production of several movies at a time once it’s fully redeveloped.

Turning the complex into a studio keeps the property, one of the largest single parcels in Gwinnett, from being split up and sold off in pieces. It offers the prospect of long-term employment and high paying jobs for members of the creative class, who could repopulate and improve an area that had seen better days.

There’s one problem. As this morning’s edition of The Economist notes, Atlanta Media Campus has run into a shortage of skilled workers.

Georgia offers generous tax incentives to lure production companies. They can receive a credit for up to 30% of the costs incurred while making movies, as long as they spend more than $500,000. This convinced Mathew Hayden to move his firm, Cinipix, from California to Georgia. But Mr Hayden still imports many workers from Florida and New York. “It’s a big concern,” he says. The state’s movie business will only prove as profitable as its workers prove employable.

Georgia has invested a lot in supporting end encouraging the creation of educational opportunities that go beyond the traditional four year college degree. The article cites efforts like Go Build Georgia, and the investment of $318 million last year in the Peach State’s technical colleges. Also noteworthy is the merger earlier this year of Georgia’s workforce development and economic development departments.

In Governor Deal’s stump speech, he trumpets the state’s number one ranking as a place to do business. As this article reminds us, however, it’s not enough to provide tax incentives to lure companies to relocate or stay here. It’s also about providing an educated workforce that is prepared to take on the careers the 21st century provides.

{ 38 comments… read them below or add one }

seenbetrdayz August 2, 2014 at 7:56 am

Except these companies just left states with educated workforces after having realized that higher taxes were needed for that workforce to exist.

Sort of a chicken and egg conundrum.

Although, let me also add that ‘tax breaks’ are not the same as ‘lower taxes’. My taxes didn’t go down one cent, which is why I often joke that maybe I should leave Georgia and come back to see if it applies to me then.

Chris Huttman August 2, 2014 at 10:45 am

It’s like car insurance you gotta switch to save.

Harry August 2, 2014 at 10:54 am

A shortage of educated marketable skills in Georgia…who would’ve guessed?

saltycracker August 2, 2014 at 11:33 am

Unemployment (redefined to not count those not looking) is up around 7.4% in Georgia. ….maybe we need to look into situations where those checks go to a credit on a course at a Tech college.

Choosy Mothers Choose Jiff August 3, 2014 at 9:57 am

pft, oh please. What is this, “Let them eat textbooks?”

Have you checked out the curriculum at many of the tech schools? They are two year associates that do not teach even the most fundamental of college level skills. It’s like Special Education, only economic instead of intelligence based.

Pretty much 90% of the degrees offered are for blue collar industry skill levels. The most they can rise to is a ‘line supervisor’ unless they start a small business. I know this because I am considering getting an undergrad degree in horticulture if, for anything, a sense of accomplishment and knowledge expansion. And, of course, to get in on the soon to come Peach State Big Cannabis, LLC™ industry, once barriers to legitimate profits are lifted by the regulation happy GOP controlled state government. Ergo, this is not an option, but a swipe at people when they are down. Drawing unemployment does not make one a leech on society, bub. If you imply that, expect to be called out on it.

You know, technically, I’m unemployed since I turned the business over to my partners this year. Yet I am not a drain on the tax base. TBH, Salty, comparative wise YOU are more of a drain on society than me and I assume you have a job somewhere.

Jon Richards August 3, 2014 at 12:06 pm

Isn’t the purpose of a technical school to teach skills that aren’t taught in a traditional bachelor degree granting college? The bottom line is that there are plenty of high paying jobs available that don’t require a four year degree, and many go begging for workers.

Here in Georgia a skilled welder can make a six figure salary. And that’s without a four year degree, but with the skills that can be learned in a technical college.

Another option for those earning an Associate’s degree from a technical college, especially if they want to seek a management position, is to earn a bachelor’s degree from a four year college. Here in Gwinnett, for example, there are articulation agreements between Gwinnett Tech and Georgia Gwinnett College that allow many of the credits earned at the associate degree level to be transferred towards the earning of the bachelor’s degree.

I hear many people complain about how it’s no longer possible to make a good living as a semiskilled worker like one could working the line at the Doraville GM plant, for example. Many of the jobs are still out there, but they require additional training beyond what one can get in high school.

Georgia gets that, and that’s why the state has significantly invested in workforce development.

saltycracker August 3, 2014 at 1:28 pm

Jon

Correct.
Also, The “situations” in my tongue in cheek response would apply to some able bodied I know that make a career out of collecting unemployment. Wouldn’t want them eating good textbooks when they get the munchies but would take their food stamps – improperly used- away and let them pick up food from a distribution point. What I’m impressed with is that they can always find a way to get a business to hire them and let them slide until eligible. The public dole is a lifestyle for too many capable of working but just don’t want to or it doesn’t fit their dream.

Choosy Mothers Choose Jiff August 4, 2014 at 12:29 pm

The public dole is a lifestyle for too many capable of working but just don’t want to or it doesn’t fit their dream.

That is a Kovian myth. Can you tell me what percentage of humans fall in that category, and how much exactly would we save if we threw out the starving children with the “welfare lifestylers”.

Have you ever been poor? What makes you think people want to be poor and on the public dole? You come across as if it were either genetic, or a character flaw.

Just say what you mean because we all know what you implying.

Noway August 3, 2014 at 1:45 pm

Jon,
Interesting that you mention the welding opportunity. I have a good friend who left his regular job two weeks ago and headed to North Dakota, to be trained as a welder for just the type of opportunity you wrote about. North Dakota is literally exploding with opportunity in the energy sector. Oh, and the guy I know has zero experience in welding. They are OJTing him for a month, then letting him work closely supervised. The six figures will be available to him within 12 months! Ain’t this country great?! Hell, yes!!!!!!

Jon Lester August 4, 2014 at 11:50 am

Hope he doesn’t do meth. It’s everywhere in oil country.

Choosy Mothers Choose Jiff August 4, 2014 at 12:31 pm

Hope he doesn’t do meth. It’s everywhere in oil our country.

FTFY..FWIW

Jon Lester August 4, 2014 at 2:48 pm

I was in the Billings, MT bus station recently, and a company man was telling a prospective employee that it wasn’t so long ago when you could leave your doors unlocked and walk the streets at night. Someone else told me of a friend in ND whose warehouse coworkers spent half their time crawling all over the floor looking for something that may have been dropped. Sure, it’s everywhere in America, but it’s especially pronounced in these boom areas, because you know that’s what moves in ahead of everything else.

Charlie August 4, 2014 at 11:17 am

I’m surprised that this is your characterization of technical schools. It makes you sound more of an elitist than…me.

I met with a Fortune 50 company a few weeks ago. They can’t find people, here in Georgia, that have the technical skills to work on their assembly lines.

GA’s office of Workforce Development told me a couple of years ago that there were roughly 2,500 welding positions open with an avg starting salary of $70K/year.

On the flip side, I know many who have graduated with liberal arts degrees, are in their late 20’s, can’t find a job outside the service industry, and are carrying five to six figure student loan debt.

Without going all ‘Judge Smails’ with “the world needs ditch diggers too”, our economy does depend on people having technical skills. And the market is willing to pay well for them.

Choosy Mothers Choose Jiff August 4, 2014 at 12:46 pm

Why do you think welding pays so much? It is often listed as one of the top 10 worse or dangerous jobs in the world. Welding includes underwater, high structure repair, and high pressure to do the job quick, cheap, and right. As is other services, pick any 2 and that is what you get. And then there is the exposure to the gas, heat and blinding light.

Disclosure: That type degree is the only one I have, an associates from a community college. In music and audio recording engineering. Groovy! Dallas at the time was hiring people practically off the street for such jobs. They were hiring like crazy!

Then came digital and most everything I learned in that Technical School was rendered obsolete in 2 years. The other formal educations became obsolete, as jobs often do.

I also took something called FORTRAN because I heard they were hiring people like crazy! I took metal shop and learned to weld. But I wanted more for myself than a solo business welding gig, blindness, a meth addiction and a big screen pickup truck.

FWIW I am considering getting an undergrad degree in horticulture. Heard there was something called Big Cannabis™ on the horizon and I bet they will be hiring like crazy!

Not so much elitist, Charlie; more so a pragmaticist based on personal experience.

Dave Bearse August 2, 2014 at 1:16 pm

Tax credits subsidizing importation of workers from elsewhere. Sounds like business friendly to me. Why not pay our unemployed to move somewhere else?

Choosy Mothers Choose Jiff August 3, 2014 at 10:01 am

Yeah! Like…Africa?

wait…

Get back to us when you lose your job and we will see if you have the same position, my thirsty friend.

Raleigh August 3, 2014 at 8:43 am

Wait a minute; Hayden said “The state’s movie business will only prove as profitable as its workers prove employable.” I guess Georgia’s movie business is profitable enough for him to move his firm here even if he does “import” many workers. I wonder where he will move when the government freebees run out because when those freebees run out they all will move on. Those government freebees are the only reason they are here in the first place.

Choosy Mothers Choose Jiff August 3, 2014 at 10:07 am

*facepalm* you didn’t go there. SOMEONE TELL ME HE DIDN’T GO THERE!

State exactly what ‘government freebies’ this industry gets. We will need sources, unbiased, of course. And let us not be loose with the term ‘freebie’. Farm subsidies are freebies. Deferment caps on taxes are not ‘freebies’ they are ‘special tax tables’. OK GO….

Once you find that massive cost to the taxpayers (try not to assume the industry would be here in the first place, paying typical business tax rates because that would be unrealistic. Assume instead they would have moved to, say, Alabama if they offered the same as GA), compare the potential economic impact and number of jobs that would be created by this new industry.

There are many skilled workers out there for this industry. They just don’t want to move here because of attitudes like yours: Backwards and Regressive.

And the stupid drug laws, too.

Harry August 3, 2014 at 10:36 am

Here’s the tax credit information. Didn’t check to see if the credits are “refundable”.
http://www.georgia.org/industries/entertainment/production-incentives/
Some light commentary here:
http://southernjournalmagazine.com/movement-behind-georgia-film-tax-credit/

So, the age-old question: Who benefits? Who pays?

Choosy Mothers Choose Jiff August 3, 2014 at 10:58 am

because I know s/he won’t click the link, here is the offensive part (at least, to Raleigh) –

OVERVIEW
Georgia production incentives provide up to 30% of your Georgia production expenditures in transferable tax credits.

The program is available for qualifying projects, including feature films, television series, commercials, music videos, animation and game development. With one of the industry’s most competitive production incentive programs, the Georgia Film, Music & Digital Entertainment Office can help you dramatically cut production costs without sacrificing quality.

STATE TAX CREDIT BENEFITS
Highlights from the Georgia Entertainment Industry Investment Act include the following:

20 percent base transferable tax credit

10 percent Georgia Entertainment Promotion (GEP) uplift can be earned by including an embedded Georgia logo on approved projects and a link to TourGeorgiaFilm.com on the promotional website

$500,000 minimum spend to qualify

No limits or caps on Georgia spend, no sunset clause

Both resident and non-resident workers’ payrolls and FICA, SUI, FUI qualify

No salary cap on individuals paid by 1099, personal service contract or loan out.

Payments made to a loan out company will require six percent Georgia income tax withheld

Production expenditures must be made in Georgia to qualify from a Georgia vendor

Travel and insurance qualify if purchased through a Georgia agency or company

Original music scoring eligible for projects produced in Georgia qualify

Post production of Georgia filmed movies and television projects qualify

Development costs, promotion, marketing, license fees and story right fees do not qualify

Which brings us back to OP; the need for training facilities in order to keep up with the demand. Also the video game production industry is producing creative entertainment product that outsells film entertainment in some cases.

Someone please again point out to me the ‘freebie’ aspect of this issue, and why it is different from what other states do in order to attract major high paying job creators?

Although I do not like the ‘no cap’ issue. Like capping a salesman’s position, if not done, the entity could grow so powerful it could take down the economy (“Too big to Fail”) like a salesman could take down a company if he moved his accounts to a competitor.

Raleigh August 3, 2014 at 1:16 pm

Face palm yourself. Companies that look for “Tax Incentives” as reasons to move operations are likely to continue “looking” for the next handout. The empty Merman Miller Facility in Cherokee County is only one prime example. They wanted those tax breaks extended and when it looked like it wasn’t going to happen they shut down a 3 year old facility to go to the next “lowest” bidder. Companies such as Herman Miller look for short term gains not long term commitments and they are not looking for long term skills. An educated workforce had nothing to do with it. Of course states only have themselves to blame for this predatory environment they created it. I wonder where Caterpillar will move when their “incentives” run out? South Carolina maybe. Before you make outlandish statements without all the facts you might do well to study just a little more but you do seem to enjoy being outlandish and wrong most of the time. So enjoy.

Jon Richards August 4, 2014 at 6:58 am

If all a company needs to be profitable is a staff of fairly low-skilled, easily trainable workers, then it makes sense for them to jump from one tax incentivized location to another. There is very little cost to make the move.

For other companies, there are specific reasons to locate and stay in one place. Here in Georgia, for example, you have Hartsfield-Jackson Airport, one of the few that offers nonstop flights to almost anywhere, and the ports of Savannah and Brunswick, which provide easy access to the world’s markets. The port of Savannah is one of the main reasons Caterpillar chose to locate where it did.

Another is the presence of universities with research programs, like UGA and Tech. Add Emory and the CDC complex, and you have access to a lot of talent. That’s why NCR moved here from Dayton. That’s also why the state is trying to develop is nascent bioscience industry.

When attracting a new industry like filmmaking, which requires a lot of skilled people, seenbetrdayz’s analogy of a chicken and egg situation is actually spot on. You want to attract industries with new jobs, but to do that, you need a workforce with skills unique to that industry; one that isn’t here because there are presently no employers who need that skill set.

In this case, offering the tax incentives offsets the expense of relocating people and/or training employees on the skills needed. For the state, the hope is that at some point a critical mass is achieved with a balance of skilled labor and businesses ready to hire.

Raleigh August 4, 2014 at 9:26 am

You’re making my argument for me. Along with the Chicken and Egg seenbetrdays also said “Except these companies just left states with educated workforces after having realized that higher taxes were needed for that workforce to exist.”

Key word “Higher Taxes”. Those companies wouldn’t have come unless they would gain an advantage for their bottom line. Now looking at Caterpillar, what’s to stop them from relocating to South Carolina when their incentives in Georgia run out? I’m sure SC can offer incentives too and they would be just as near the Port of Savannah. They moved for the incentives this time so what’s to stop them for doing it again?

The point is Companies do this for purely financial reasons. Infrastructure is a factor but just how large is it? In the case of Mr. Hayden he left his skilled workforce behind and moved here. Now that he is here he wants to stop importing workers (costly to him) and have the state train people. He doesn’t want to pay for that himself nor lose his tax incentives. There is the chicken and the egg. Seeing that he has already moved his business where there was a skilled workforce because of taxes what do you think he will do if those incentives run out even if we provide him with a “Skilled” workforce? If his past history means anything he will pick up and move again leaving us holding the bag.

Choosy Mothers Choose Jiff August 4, 2014 at 12:58 pm

The point is Companies do this for purely financial reasons….Those companies wouldn’t have come unless they would gain an advantage for their bottom line Yes. This is what is called “business”.

Now that he is here he wants to stop importing workers (costly to him) and have the state train people. He doesn’t want to pay for that himself nor lose his tax incentives. There is the chicken and the egg. erm, not to be picky but the better analogy would be ‘having cake and eating it too.’ Just sayin’…

I am not really sure what your beef is. Is it just not collecting enough taxes because everyone is a Special Snowflake and every participant gets a First Place Ribbon and how DARE anyone get an advantage?

Is it “This smells like spending tax money” so you are opposed to spending taxes in general because ALLTAX=ALLBAD?

Or are you missing the situation where skilled people do NOT want to live here because it is considered a backwater state culturally to someone with a skilled technical background?

Or are you just anti-business in general? One thing for sure, you are all OVER this issue. Just sure where you are coming from with this liberal/conservative passive aggressive angst.

Noway August 4, 2014 at 3:17 pm

Hey Jif,
Is there a brain drain of tech school grads leaving “backwater” GA I’m not aware of? LOL!

Noway August 4, 2014 at 3:30 pm

Yeah, I just heard the owner of Shumate Heating and Air lamenting the fact that her latest HVAC technician applicant turned her down because Robert Shaw was no longer conducting the ASO!!

Harry August 4, 2014 at 3:52 pm

An evening of the ASO with Jessye Norman under the baton of Robert Shaw was the highlight of my musical existence.

barrycdog August 4, 2014 at 4:21 am

What specific skills do they need? I mean tech schools don’t exactly offer Film or Special Effects 101.

Charlie August 4, 2014 at 11:19 am

I think the entire point is that they need to, and I recall seeing recent stories that many of our technical schools are shifting their courses to respond to this rapidly growing need.

Ellynn August 4, 2014 at 1:03 pm

We think of the people in the movie and film world as just workers. They are are creative and professional. In the case of most artistic types, they are not social conservitive.

I had an interesting chat with one of the SCAD Film grad students last fall as he was getting ready to move to Washington state to work in Vancover. He would have loved to stay here. He grew up in Leesburg. STill has a large family there. He had offers in Atlanta, but he does not think Georgia will be ‘kind’ to his future family and plans. He’s 26, has a high school sweetheart (an accountant) who he has been with for over a decade. They want to get married. They want to start a family. In this state, it’s currently illegal.

Tech schools work wonderfully, and I have no doubt they could create a film division to create skilled labor, but you need to look at who works in the industry. Many would attend the program, and receive the education, but that does not mean they would stay here.

Noway August 4, 2014 at 6:14 pm

If you think GA is gonna be getting 4.6 billion in movie revenues you’re higher than Spicoli! Other than GWTW, the next best piece of creativity uttered by the GA film industry consisted of that unforgettable line, “you look jus’ like a hawg!”

Jon Richards August 5, 2014 at 8:23 am

Movie revenues isn’t the proper way to look at the issue. Instead it’s economic impact. These figures are from Governor Deal’s office:

In Fiscal Year 2014, the film industry generated an economic impact of $5.1 billion and employed nearly 23,500 Georgia jobs. Here’s the press release.

I’ll see your Spicoli and raise you an Alex Keaton.

Dr. Monica Henson August 5, 2014 at 3:45 pm

“I’ll see your Spicoli and raise you an Alex Keaton.” This, folks, is why I follow Jon Richards.

Wit aside, Jon makes some excellent points, and those who knock a technical education as “something lesser” simply don’t know what they’re talking about. The reading level required in many technical fields rivals that of university studies, and technical writing is a highly prized skill.

Jon Lester August 6, 2014 at 10:40 am

Anyone who’s done enough living with their eyes open would know that vocational-track people are often smarter than academics, in a true sense. Also, there’s no good reason why anyone can’t have both; everyone should be open to expanding and diversifying their skill set.

saltycracker August 6, 2014 at 11:09 am

Agree totally with the value of Vo-tech and as we realize the importance, what makes me nervous is the zealots that push to button hole our youth way to early in their development and education. We always over or under run a good idea.

Charlie August 6, 2014 at 2:06 pm

I’ve seen this line of thinking more and more from rank and file conservatives, and frankly it leaves me perplexed. So I’ll play along, genuinely trying to figure out the thinking here.

We’re the party of “personal responsibility”. With that comes choices, and decisions. These choices have consequences.

Is everyone in 9th grade ready to be an adult? Hell no, nor should they be. But are we capable of evaluating aptitudes and attitudes to begin specializing education toward the student’s most likely path of success? I think it’s almost criminal if we don’t.

Will we/they get it wrong from time to time? Sure. That’s what community colleges and vo-tech schools. They can get an older student ready for college or work training that was on the wrong track. These schools are a safety valve for kids that may track wrong.

The upside is that the kids that are tracked correctly are able to learn a skill or prepare for the college career that they’ll embark on. And be ready to be productive taxpaying members of society in their early 20’s.

The alternative is that we keep K-12 from being worth anything, let colleges continue to spend much of their resources on remedial learning, expect kids to spend 5-6 years in college to “find themselves”, and have a bunch of 26 year olds wandering around with five or six figures of debt, no work experience, and little hope of matching their skills to a job.

I hardly think setting expectations that the four years of high school need to directly matter to the education/career path of a student is too much. What am I missing here?

Harry August 6, 2014 at 2:14 pm

You’re not missing anything. And many of those who have been misdirected end up falling off and out before they can even graduate high school.

saltycracker August 6, 2014 at 3:08 pm

Couldn’t agree with your points more. It wasn’t until my second year in college that I took a few tests on my aptitudes and interests. I would have been better served if I took the tests earlier. My interests and aptitudes covered a big swath (just got off a call from the Arts & Sciences alumni push) and shifted some, not a whole lot from middle school.

No need to throw out a lot of anecdotal stories but some of my crazy friends that were destined, at best, to vo-tech had some epiphany along the way, and went to college and successful careers after college, graduate or law or medical school. And others with college in mind didn’t find it agreeable and found a skill they loved and were highly successful at. Early testing might have saved all some time and money. Making them choose too early would have been a mistake.

The key words in my remark were zealots (school decision makers) and button holing. I’ve talked to some kids that have taken tests early on and we smiled at the results. My concern is locking them into the fork in the road they must take. As long as the consultations are advisory, it’s good. The choices must be theirs.

We’ve always had optional courses in high school to prepare for life after. What most of the remedial college courses are is to get students up to speed in areas also important in vocational schools – basic stuff we should be expecting of a high school grad.

The cynical side of me worries that good intentions will be twisted in the edu-bureaucracy to focus on a smaller section and toss the rest into a tank of let’s get these kids outta here to tech school. Any fork they take requires a sound high school education. College admissions have criteria that they need to be aware of and take by choice. Guidance good, no options bad.