It’s football and economic development in today’s papers.
In the Richmond Times-Dispatch, Mark Warner’s record on economic development is reviewed by reporter Greg Edwards. Almost uniformly, local and state officials offer praise, especially for the outgoing Governor’s efforts in attracting businesses to Southside and Southwest.
Also in the T-D, Secretary of Commerce and Trade Michael J. Schewel is confirmed as leaving his post to return to private law practice. There had been conflicting reports about his plans. A new Secretary will probably be named this week by Governor-elect Kaine.
Sticking with the theme of economic development in Virginia’s less prosperous areas, Washington Post reporter Ellen McCarthy left the hustle and bustle of Metro DC for the wide-open spaces of Lebanon in Russell County, where CGI-AMS and Northrop Grumman will locate new high-tech facilities that are the crown jewels of the Warner record. Naturally, the locals are thrilled and the transformation potential is viewed as great.
Worthy of discusssion, however, is this snippet:
In fact, the tech companies that line the overflowing roads of Northern Virginia have thousands of open jobs they can’t fill. The job market in Washington is so tight, companies regularly pay bonuses and inflated salaries to recruit employees with technical skills, even though the work required to develop new software programs has become increasingly routine. Banks and insurance firms long ago cut their software development costs by shipping the work to India and China, but legal restrictions and the politics of government procurement have prevented federal contractors from following suit.
So they are looking at rural America instead — to places where rents are cheap, traffic is light and, instead of companies being forced to offer bonuses or poach employees from a competitor, rsums [sic] pour in by the dozen.
Are there issues with rural Virginia being America’s “India?”
The average salary for the 300 people CGI-AMS expects to hire in Lebanon, for instance, will be $50,000 — far above the town’s $27,606 average annual wage but about half the salary an advanced software developer in Northern Virginia might earn.
Given the apparently dire employment situation in NVA, shouldn’t we be seeing companies not involved in state contracting moving to less populated areas in Virginia?
The move of software developers and some other more routine jobs “will be a growing pattern,” said Anirban Basu, an economist and chief executive of the Sage Policy Group. “The Washington-area cost structure is pushing jobs out of the region.”
Or, are the CGI-AMS and Northrop Grumman deals essentially expensive “bones” thrown to make a particular deal?
Donna S. Morea, president of CGI-AMS, said the [state] contract had no bearing on the decision to locate in Lebanon. A $4.5 million incentive package put together by local and state officials, however, was taken into consideration, she said.
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