Category Archives: Labor & workforce

Addiction as a Workforce Development Issue

How ubiquitous is drug abuse in Virginia’s workforce? In western Virginia, it’s mind-numbingly pervasive.

“In many environments, as many as 50 percent of employee applicants who are eligible on the basis of their training, skills, and background fail to be employable because they fail to pass a drug screen,” Dr. Bob Trestman, chairman of psychiatry for Carilion Clinic, told Roanoke-area employers in a panel talk yesterday, reports the Roanoke Times.

Most employers have Employee Assistance Programs but Trestman said employees are reluctant to use them because addicts are stigmatized. “We need to think of them as people with an illness. Then we can reframe how we approach care and treatment and engage and support them in the workplace safely.” Continue reading

Yes, Let’s Restore Drivers Licenses. But…

The General Assembly spiked bills in the 2019 session that would have ended the practice of suspending the drivers licenses of Virginians who fail to pay court fines and other obligations unrelated to driving. Without some kind of repercussion, foes of the bills argued, those obligations often would go unpaid.

Now Governor Ralph Northam is proposing to use the budget as an end run around the failed legislation. He is adding an amendment to the budget bill to end the licenses-suspension practice and reinstate driving privileges for more than 600,000 Virginians.

“Having a driver’s license is essential to a person’s ability to maintain a job and provide for their families,” Northam said at a press conference yesterday. “It is especially pertinent to those that live in rural Virginia because we don’t have public transportation that is adequate to get to employment.” Continue reading

UVa Raising Minimum Wage to $15

Demonstrators backing the Living Wage in a rally outside the Rotunda earlier this month. Photo credit: Cavalier Daily

I’ll give the University of Virginia credit for raising the minimum wage it pays its employees to $15 an hour. The University is putting its money where its proverbial mouth is. It doesn’t just preach social justice for others — it practices its version of social justice itself.

It turns out that increasing the minimum wage for 1,400 employees on the Grounds is a bit trickier than envisioned, however. As the Cavalier Daily reports, “a variety of legal barriers may complicate that endeavor for those who are employed by external contractors rather than the University itself.” UVa President Jim Ryan said the increase, which will go into full effect Jan.1, 2020,  will apply to only 60% of full-time employees who earn less than $15 an hour. But the university is working to extend the same wage to outside contractors. Said Ryan: “This is legally and logistically more complicated, but our goal is to make it happen.” Continue reading

Virginia Manufacturing Jobs Still in Decline

Source: StatChat blog

Virginia has lost nearly 136,000 manufacturing jobs since 2000, a 36% decrease, according to Kyaw Khine writing in the StatChat blog. The losses occurred mostly in the latter phases of the 2000 and 2007 recessions, but, far from making up the losses during the last eight years of economic expansion, manufacturing jobs have been treading water.

Further, Khine cites long-term industry projections by the Virginia Employment Commission that employment in Virginia’s manufacturing sector will decrease by another 5.7% between 2016 and 2026.

Khine’s numbers call into question the economic-development priorities of Virginia’s non-metropolitan areas which continue to invest resources in building a manufacturing base as well as the Northam administration’s well-intentioned goal of ensuring that no region gets left behind economically. Continue reading

Passing Class No Guarantee of Certificate In New State Workforce Program

Average earnings three years before and one after completing the VCCS FastForward workforce certificate program. Source: SCHEV. Click for larger view.

Virginia’s FastForward workforce credential program now in its third year is showing good success in getting students through training, but a high number of people in some programs do not earn the matching certificate.  Those who achieve both usually show the highest wage growth.

For those who went into the program earning under $20,000 a year, the subsequent increase in earnings is dramatic, almost 140 percent year over year.  “We are serving a very high need population, even compared to the traditional community college population,” said Lori Dwyer, assistant vice chancellor for programs for the Virginia Community College System.   Continue reading

Virginians Have a Right to Free Speech, Not a Right to a Job

Can an employer in Virginia fire an employee for his loathsome political views?

Such a thing is happening in Patrick County, where emergency management technician Alex McNabb is being fired for making derogatory comments and using racial slurs on a neo-Nazi podcast. There is no evidence that McNabb has discriminated against anyone while providing emergency care, but his online persona often tells stories about being an EMT interacting with African-Americans.

The board of directors of the JEB Stuart Rescue Squad voted unanimously Sunday to terminate McNabb’s employment, reports the Martinsville Bulletin.

Legally, the case should be cut-and-dried. Virginia is an employment-at-will state, and employers have the right to fire anyone for any reason (save on the basis of race, ethnicity, religion, or sexual orientation). McNabb has a constitutional right to freedom of speech. In other words, government cannot use its powers of coercion to silence him. But he doesn’t have a constitutional right to be protected from the consequences of his speech. Employers have a right to disassociate themselves from people whose views they find abhorrent.  Suck it up, dude.

Now, let’s make sure we apply the employment-at-will principal consistently, not just when the offender is a neo-Nazi.

When Businesses Welcome Regulations

by Richard W. Hall-Sizemore

The recent news that the General Assembly may not confirm Governor Ralph Northam’s appointment for director of the Department of Professional and Occupational Regulation (DPOR) triggered one of my longstanding complaints. It is not about Jay DeBoer, the beleaguered appointee; I know nothing about his record as director of this agency. My beef is with the agency itself and its role.

The legislative battles over occupational licensing are carried out largely out of view of the public; they do not generate headlines. Furthermore, after the legislative battles are over, the battles over the details, i.e. the regulations, are carried out even further removed from public scrutiny, although they are open to anyone in the public who is willing to put in the time to participate. As arcane as these activities are, they can affect the public greatly. Continue reading

Map of the Day: Virginia’s Disabled Populations

In Lee County, Virginia’s westernmost jurisdiction, more than one quarter of the population (25.7%) has a disability, according to American Community Survey data. The rate of disabilities — physical or mental impairments that limit a person’s ability to work — is almost as high in neighboring counties, as shown in this map produced by the Virginia Public Access Project. Virginia’s most economically depressed jurisdictions tend to have the highest disability rates. Economy and disability… which is the chicken and which is the egg?

Virginia’s Disconnected Youth

Source: StatChat Blog.

Virginia’s overall unemployment rate has been declining steadily for years, reaching 3.2% in June 2018. But youth unemployment remains disconcertingly high. Indeed roughly 10% of the state’s 16- to 24-year-olds are “disconnected” from the labor force, neither working nor pursuing an education, reports Shonel Sen, a researcher with the Demographics Research Group at the University of Virginia.

Living up to stereotype, almost 60% of disconnected youth still live with parents. A majority of the economic dropouts are white, although a significant minority are black, Sen writes in the StatChat blog. While one out of five is a high-school dropout, half have high school degrees or GEDs, one out of five has some college, and 7% have B.A. degrees or higher. Continue reading

Amazon Deal Highlights Virginia’s Competitive Advantage Over Maryland

Many Virginians have qualms about the $550 million in job-creation incentives plus more than $1 billion in promised transportation and higher-ed investments it took to recruit a $2.5 billion Amazon facility to Northern Virginia. But things could be worse. Maryland offered an $8.5 billion package — and didn’t land the deal. The Washington Post is asking if the Old Line State, which pitched a Montgomery County location, has lost its economic-development mojo.

For the record, Maryland officials are putting on a positive face. They are delighted that Montgomery County was one of Amazon’s 20 finalists, and they say that the facility’s location in Arlington/Alexandria will send positive economic ripples throughout the Washington region.

But Montgomery County — the Fairfax of Maryland — has studiously refashioned itself over the past few decades as a walkable urban community with access to abundant mass transit, just the kind of urban fabric Amazon was looking for. The county has access to the same high-tech labor pool as Arlington and Alexandria, which snagged the deal. And the state offered $6 to $7 billion more in inducements than Virginia.

Anirban Basu, chairman of the Maryland Economic Development Commission, has been asking himself, “Why would Amazon turn away billions of dollars in subsidies to go across the river?”

Experts quoted by the WaPo pointed point to site-specific factors that favored Virginia. National Landing (the rebranded location in Crystal City and Potomac Yard that Amazon selected) is closer to downtown Washington, D.C., and so close to Reagan National Airport that Virginia has offered to build a walkway to link it to the Amazon office complex. National Landing has direct access to a Metro station, which the Commonwealth has offered to upgrade. And most of the property involved in Virginia’s bid is owned by a single developer, JBG Smith.

And who would believe this? Northern Virginia’s transportation infrastructure compares favorably to that of Maryland.

Northern Virginia’s transit and road networks also outpace the Maryland suburb’s. Virginia recently expanded its part of the Capital Beltway with tolled express lanes, and the second phase of Metro’s Silver Line, which will extend the subway to Dulles International Airport and into Loudoun County, is slated to open in 2020.

Finally, Basu cited Virginia’s “creative stroke of genius” in lining up $1.1 billion in higher-education support to build the computer-science talent pipeline. Virginia’s plan includes $250 million toward Virginia Tech building a $1 billion “Innovation Campus” near the future Amazon hub.

I would add another factor not mentioned in the WaPo article. Amazon has a history of working closely with Virginia officials and its largest utility, Dominion Energy, fostering development of Amazon’s cloud-services business in Northern Virginia. The company knows it can get things done in Virginia, whereas Maryland, where it has had little experience, is more of a cipher.

But Maryland’s competitiveness issue runs deeper. “One of the reasons Maryland created such a large incentive package for Amazon is because we know our business climate is not as competitive,” said Basu, whose Baltimore firm, the Sage Policy Group, conducted the state’s economic impact study of Amazon’s potential benefits but was not involved in the bid.

As the WaPo quotes regional economic analyst Stephen S. Fuller, 25 years ago economic activity in the Washington region was split equally among Northern Virginia, Washington and the Maryland suburbs. By last year, Northern Virginia’s share had grown to 48 percent, while the Maryland suburbs held about steady with 31 percent, and Washington had dropped to 21 percent.

Think about that. For all of Northern Virginia’s horrendous problems with traffic congestion, autocentric land uses, skilled labor shortages, lack of a top-tier research university, local-government unfunded pension liabilities, and some of the highest taxes in Virginia, it has been kicking Terrapin butt for two-and-a-half decades as measured by job creation. Writes the WaPo:

[Basu] has concluded that Amazon must have rejected the state’s “antiquated” regulations and higher taxes for corporations and top-earning residents. Amazon has said salaries at the new headquarters will average $150,000. Unlike in Virginia, Maryland jurisdictions impose a local income tax in addition to the state tax.

According to the Tax Foundation, Virginia is has a more favorable tax climate than Maryland almost across the board.

Personal income taxes
Virginia ranked 35th
Maryland ranked 45th

Corporate taxes
Virginia ranked 10th
Maryland ranked 22nd

Sales taxes
Virginia ranked 10th
Maryland ranked 18th

Property taxes
Virginia ranked 30th
Maryland ranked 42nd

Only in “unemployment insurance taxes” does Maryland compare favorably to Virginia, with a 28th ranking compared to Virginia’s 43rd.

Bottom line: Virginians get to keep more of their paychecks. When you’re  a company recruiting high-end business and technical talent, that counts for a lot.

Update: I have edited the original version of this story to distinguish between Virginia’s “incentives” paid directly to Amazon and state and local promises to invest in transportation and higher-ed.

The Workforce Skills in Greatest Shortage Are Not Math and Science


As Virginia legislators ponder future investments in the Old Dominion’s talent pipeline (see my previous post), they might consider consulting data recently published by the Organisation for Economic Cooperation and Development (OECD). The organization defines skills as hard-to-find (or in shortage) when employers are unable to recruit staff with the required skills in a labor market at the going rate of pay and working conditions. Skill surpluses arise in the opposite case, when the supply exceeds of demand for a given skill.

In the United States, surplus skills tend to be associated with physical abilities (strength, coordination, speed, reaction time) — no surprise there. But, given focus on the shortage of IT workers in Virginia, one might surmise that STEM (Science, Technology, Engineering and Math) skills are in shortest supply. According to OECD data, those skills are in modestly short supply, but the greatest skill deficits are education & training, social skills, verbal abilities, and management. (Those are national numbers, not Virginia-specific. Virginia labor markets may or may not reflect national trends.)

What does this tell us? It’s all well and good to strengthen Virginia’s K-12 and higher-ed math and science curriculum. But we can’t neglect reading, writing, communications, and collaboration. Who knows, a humanities education might come back in style one day.

Where Will 30,000 More Tech Degrees Come From?

There are many moving parts to the Amazon, Inc., deal to invest $2.5 billion and hire 25,000 employees in Northern Virginia. In one of the most important deliverables, the Commonwealth has committed to increase the number of bachelor’s and master’s degrees in computer science and related fields by 25,000 to 35,000 over and above the already-ambitious baseline forecast over the next two decades.

Peter Blake, executive director of the State Council of Higher Education for Virginia (SCHEV), says the goal is achievable but it won’t be easy. The number of students graduating from Virginia high schools is not forecast to increase substantially in the near future. If the baseline student population isn’t increasing, where will the IT degree seekers come from?

He sees four places to find the students to earn those degrees.

  • More college-ready high school graduates. On average about 72% of Virginia high school graduates continue their education at college-level institutions. One way to increase the number of tech-degree seekers is to boost the percentage of high school graduates who pursue higher education.
  • Improved college retention. Only 70% of the students who enter college manage to earn a degree within six years. Virginia can bolster the talent pipeline by reducing the college dropout rate, thereby increasing the retention rate.
  • Improved “recovery” of college dropouts. Tens of thousands of Virginians have earned college credits but failed to earn degrees or credentials. Potentially, the higher-ed system can coax some of these college dropouts back into school to complete their degrees.
  • More out-of-state students. If all else fails, Virginia can increase admittance of out-of-state students into Virginia higher-ed institutions.

“We have to step up in each of those areas,” Blake says. “Business as usual won’t get us there.”

The deal makers negotiating the Amazon package anticipated some of these issues. The Governor’s website explains how it expects to build Virginia’s talent pipeline.

  • Bachelor’s degrees. To expand the number of bachelor’s degrees, the Commonwealth will establish a performance-based tech talent investment fund, with General Assembly approval. This fund will enable higher education institutions across Virginia to receive startup funds for faculty recruitment, state capital investment (where required), and enrollment funding to expand the number of bachelor’s degrees the institutions confer annually in computer science and closely related fields (e.g., computer engineering).
  • Master’s degrees. To expand the number of master’s degrees, the Commonwealth plans investments of up to $375 million for academic space and operational support over the next 20 years. These performance-based, master’s degree investments will be provided to George Mason University for its Arlington campus and Virginia Tech for a new campus expected to be located in Alexandria.  Those institutions must match the state commitment dollar-for-dollar.
  • K-12. Virginia will invest $25 million in the K-12 STEM and computer science experience for students and teachers over the next 20 years.

Blake offers no comment on whether those resources will be adequate. Legislators will have to decide whether they will be adequate. Here’s my concern: The General Assembly can set aside money to increase the institutional capacity to provide ~30,000 more advanced degrees, but that’s no guarantee that the so-called “talent pipeline” starting with K-12 schools can increase the supply of students with the aptitude and desire to earn those demanding technical degrees.

If Virginia can’t develop enough home-grown talent to fulfill the demand, Blake suggests, colleges and universities may have to consider recruiting out-of-state students more aggressively. In that case, legislators may have to re-consider the out-of-state enrollment caps it has placed on some institutions.

The good news, says Blake, is that SCHEV reports key metrics — number of degrees granted, college dropout rates, out-of-state students enrolled, and the like. Legislators will be able to see if Virginia stays on track to meet its 20-year targets, and they should have time to make any needed mid-course adjustments.

A Tightly Focused Plan for Boosting Virginia’s Business-Climate Rankings

Virginia’s business climate rankings have recovered modestly in recently years, but they remain significantly lower than in its glory days and well behind the states with which the Old Dominion competes for major corporate investment. That harsh reality comes through loud and clear in a presentation made by Stephen Moret, president of the Virginia Economic Development Partnership (VEDP) at a Virginia Chamber of Commerce executive briefing on the business climate yesterday.

Virginia trails its competitors in the perception of relocation consultants on the cost of doing business, the corporate tax environment, business incentives, access to capital, and other key business-climate attributes.

But Moret, who was hired to reinvigorate Virginia’s economic development machinery, has a plan to bolster the state’s business climate. He is working on five targeted initiatives that he thinks can make a big difference.

Create a world-class, turnkey, customized workforce development and training incentive. Workforce typically tops the list of site-selection priorities. While Virginia has a highly regarded public system of higher education, the system does not work closely with economic developers on turnkey, customized workforce solutions for corporations interested in investing in Virginia.

Moret, who developed a highly touted program in Louisiana, said the General Assembly has funded a VEDP-community colleges collaboration to the tune of $2.5 million in Fiscal Year 2019. Once the team is assembled and ready for launch, VEDP will identify three to five pilot projects in preparation for a full launch. His ultimate goal: “Virginia will break into the top five of state workforce development programs in the country within three years, with a solid chance of top three within five years.”

Implement a robust, third-party marketing program. One reason that Virginia’s perception lags among CEOs and site consultants is that competing states market themselves more aggressively. Virginia now has a $1.7 million marketing budget for FY 2019 (and $2.7 million for FY 2020), still short of what is needed to implement a program designed for a budget of $10 million (similar to that of some competing states). But the funding should be sufficient, Moret said, to improve Virginia’s perception as a place to do business among key influencers.

Goals for the marketing campaign include pushing Virginia back into the Top 10 in business rankings, creating 100 additional leads per year, and bringing 5 to 7 additional projects and 1,200 jobs to Virginia per year. A fully funded marketing budget would accomplish commensurately more.

Secure transformational economic development projects that create positive national attention. A small number of high-impact economic development projects, such as Fortune 500 headquarters locations, major auto assembly facilities, and the like, attract outsize national media attention, and influence executive perceptions about business climate. Moret proposed “aggressively courting leading companies with a custom-fit, aggressive approach,” which includes developing “a list of potential custom incentives and investments by region and sector that could be deployed to attract transformational projects.”

The goal would be to snag two or three of these mega-projects per year, gradually covering every region of the Commonwealth, benefiting both urban and rural areas.

Enact targeted tax changes to reduce state/local tax burdens on new business investments and expansions. Virginia’s corporate tax system treats established businesses well but is punitive toward new capital-intensive manufacturing enterprises — indeed, the effective tax burden is the second highest in the country. The tax burden on new investment hurts Virginia’s business climate rankings — the Tax Foundation’s Location Matters scores are incorporated into several state business-climate rankings — and discourages new investment, especially the kind of transformational projects Moret seeks.

Moret’s presentation offered no details beyond suggesting that the tax burden needs to be lower. He proposed collaborating with key stakeholders such as the Virginia Association of Counties and Virginia Municipal League to develop specific proposals.

Assemble more shovel-ready sites. The ready availability of industrial sites served by with all necessary infrastructure often looms larger in corporate investment decisions than incentives. Georgia, Tennessee, and North Carolina often win over Virginia because they have invested in build-ready sites. The lack of prepared sites and buildings have cost Virginia nearly 50 projects and $6.5 billion in investment over the past five years.

Virginia has a “relatively robust portfolio” of project-ready sites less than 25 acres in size, according to Moret’s presentation. But the economic impact is small, so VEDP is focusing on building the portfolio of sites 25 acres or larger, the development costs of which are beyond the scope of any one locality to fund, and often beyond the capability of any one region.

A Massive Waste of Human Capital

Graph source; Cranky’s Blog. (Click for clearer image)

In the 2012-13 school year, roughly 32,000 students entered Virginia’s public universities. Six years later, some 9,000 of them, 28%, had failed to graduate. And if they hadn’t graduated within six years, the chances were remote that they ever would. John Butcher provides the numbers in his latest post at Cranky’s Blog.

Think of the waste in human capital — 9,000 kids, the vast majority of whom took on student-loan debt and were unable to earn a degree that would give them to earning power to pay off that debt. Nine thousand kids mired in modern-day indentured servitude.

As John points out, the problem doesn’t originate at the University of Virginia or the College of William & Mary, which accept only students with high SAT scores. High SAT scores are highly correlated (almost 90%) with college graduation rates. The college drop-out rate is highest at schools that cater to students with low SAT scores. But even then, some schools do a worse job than others of nursing students through to completion. The biggest under-performers, adjusting for average SAT scores, are George Mason University, Virginia Commonwealth University, and Old Dominion University.

ODU has the excuse that it serves a transient military population. What’s VCU’s and GMU’s excuse?

Why is this a scandal only for for-profit diploma mills?

JLARC Report on Licensing: Useful, But a Missed Opportunity

As the old saying goes, you find what you look for. And in its examination of occupational licensing in Virginia the Joint Legislative Audit and Review Commission (JLARC) largely found what it was looking for — inefficiencies and overcharges. Conducting the review was worthwhile, but the exercise was small ball — it missed the opportunity to examine much bigger issues.

In 2017, JLARC instructed its staff to study the Department of Professional and Occupational Regulation (DPOR) staffing and organization, its processing of occupational licenses, and its enforcement of occupational rules. Staff also assessed the affordability of fees and the processes for adjusting fees.

Here’s what JLARC did not study: To what extent does licensing create barriers to entry into the regulated occupations and professions? To what extent do regulated professions use regulations to protect their occupational turf and boost their earnings? To what extent does the public suffer from these legalized labor monopolies?

To its credit, given the limited scope of its inquiry, JLARC did come up with some interesting findings in “Operations and Performance of the Department of Professional and Occupational Regulation“:

  • No legal justification for regulating 11 occupations. Eleven occupations regulated by DPOR appear not to meet the criteria for regulation established in the state code. These include community managers, opticians, residential energy analysts, soil scientists, landscape architects, waste management facility operators and others. Regulation of these occupations does nothing to advance the public health, safety and welfare of the public.
  • Excess fees. DPOR is funded by the fees it charges to applicants. DPOR’s method for calculating fees has over-projected agency expenses leading to unnecessarily high fees in the past. Fees have been reduced since, but the balance still has grown $27.2 million — up from $15 million ten years ago, and far more than needed.
  • Many complaints go unexamined. Staff closed 71% of the disciplinary cases it opened in FY17. Staff do not investigate all potential violations.
  • Poor use of IT. DPOR does review and approve licensing requests in a timely manner, but it would make the process more user friendly by making it more accessible online and by automating key processes.

These are all useful findings, and the report makes some 36 recommendations on how to improve the system. While the goal of improving administrative productivity is laudatory, however, making a flawed system work more efficiently doesn’t do much to build a more prosperous, equitable Commonwealth.

Conservatives have long targeted occupational licensing for creating barriers to upward mobility. Do the state’s 73,000 barbers and cosmetologists really need regulating? Do they really need formal education and credentialing? Is the public health and safety truly harmed if someone gets a bad haircut or cracked fingernail? The crafts of hair cutting, cosmetology and hair-braiding, which provide an avenue of occupational mobility for lower-income Virginians, could be taught perfectly adequately in informal apprenticeships. Why burden people with educational costs and licensing fees?

Of greater concern is the regulation of the medical professions. In theory, the system is designed to protect the public from frauds, charlatans and malpractice. The system does do that, so some form of licensing is necessary. But the system also carves out occupational turf, protecting doctors from competition from nurse practitioners, and nurse practitioners from registered nurses, and registered nurses from licensed practical nurses, and so on down the line. That may not be a big problem in major metro areas, but it is a huge problem in large swathes of rural Virginia that have trouble recruiting medical professionals.

Indeed, it is fair to say that the crisis of access and affordability in rural health care is largely the result of rigid occupational licensing rules that prevent nurses from performing a high percentage of the routine procedures, and dental hygienists from cleaning teeth and filling simple cavities. No health care, it appears, is better than health care not delivered by doctors and dentists.

I would love to think that the General Assembly might get serious about tackling these issues. But I don’t see it ever happening. As the Richmond Times-Dispatch editorial page observes today, only one in twenty jobs required government certification a half century ago. Today, one in four does. It should come as no surprise that highly compensated professions, intent upon maintaining their occupational monopolies, have become major campaign contributors. According to the Virginia Public Access Project, physicians have donated $347,000 to political campaigns so far in 2018-19, dentists $223,000, optometrists $114,000. Nurses? Only $33,000. Don’t expect rural healthcare reform unless it involves paying doctors and dentists more money.