story by Roby Brock, a TCW content partner and owner of Talk Business & Politics
The state’s economic development community concluded two days of workshops hearing from leaders who called for a workforce overhaul and potential changes to Amendment 82, the state’s superproject amendment.
Grant Tennille, director of the Arkansas Economic Development Commission, delivered his state of the state’s economy address to the Arkansas Economic Developers, a group of chamber leaders, professional economic developers, and site selection consultants on Tuesday at the Little Rock Marriott Hotel.
In an interview prior to his speech, Tennille said the group needed to urgently address better labor development to meet job needs.
“We have heard every speaker talk about the workforce piece. It’s what we lack. And there are a lot of people thinking about, but at this point, it is an emergency,” Tennille said.
“We have the tools we need to compete. We have sites, we have the prime location, we have the transportation infrastructure. We’re better at logistics than almost anybody else in the country. What we don’t have are the people to go to work,” he added.
State Chamber of Commerce officials estimate that as many as 40,000 existing jobs are vacant in Arkansas, while nearly 81,000 Arkansans are currently unemployed.
Tennille said that to turn around the labor deficit the state must redirect resources and partner with business to address skills shortages. However, he said the biggest leap will occur when parents have realistic conversations with their kids about marrying education with job opportunities.
“It comes down to sort of the basic value proposition of life for Arkansans,” he said. “What we don’t need any more of are people graduating with a B.A. in French Literature running around out here looking for that middle-class job. They don’t exist, they’re not going to exist. We’ve got to focus on the skills training because that’s the route to making money.”
State leaders are now assessing workforce education and training in hopes of revamping the system of public schools, two-year colleges and universities to better prepare students for available jobs. Tennille said the state is at the point where private industry should pony up money, take over training in key areas and encourage state and local resources to follow.
“I think they should. Because at some level, as motivated as the state is, there are competing politics and policies that make it difficult for anybody short of a king to be able to say this is the way it’s going to be,” said Tennille. “Business can do that and probably should. I think it would help the state because it would show, ‘Here’s the path. Now, take the state money and invest it along this same path and we’re going to be okay.’”
He cited as an example the need for more welders as the state’s first superproject, Big River Steel, gears up for construction.
“I think a project like Big River Steel could drive it to a head. They’re going to need 500, 600, 700, 800 pipe fitters across the next 18 months. Every pipe fitter worth his salt right now in the region is in south Louisiana. Where are we going to get them? We’re going to have to make them,” Tennille said.
He added that welders could be trained to meet Big River Steel’s needs within 6-12 weeks with the right amount of intensity and focus. He noted that a private welding academy recently launched in Jacksonville to meet industry demand.
“You’re going to see business put money into that thing and it’s going to go,” he said.
In a morning session to discuss lessons learned from the Big River Steel Mill, Mississippi County economic developer Clif Chitwood said the state needs to revisit Amendment 82, the superproject amendment.
Chitwood said other states have more flexibility to compete for super projects and Arkansas needs to keep up.
“We have some do’s and don’ts in our constitution that our sister states do not have, which allow them to react much quicker and with a more tailored package of incentives, when those are called for, than we are able to do in Arkansas,” Chitwood said.
Noting that site locators estimate that at least 10 automotive plants will be built in the southern U.S. or Mexico in the next decade, Chitwood said Arkansas’ superproject amendment “can’t raise enough money to actually win an auto manufacturing plant.”
Amendment 82 allows for general obligation bonds of the state to be issued to finance infrastructure or other needs to attract large economic development projects. The bonds may be issued for up to 5% of state general revenues — which would equate to roughly $300 million under a calculation using a $6 billion revenue figure. Any changes to the constitutional amendment would require statewide passage by voters.
“Arkansas ought to have one [auto plant]. They employ 3,500 people. If one went into Central Arkansas it would have an enormous impact on jobs,” said Chitwood. “And I can’t think of a single industry that would help the entire state of Arkansas more than an auto manufacturing plant.”