To say city officials were keen on bidding for Amazon’s second headquarters is, perhaps, the understatement of the year.
In all, 238 cities in the United States and Canada applied for the spot, lured by the promise of 50,000 jobs and $5 billion in investments. In January, Amazon whittled the list down to a mere 20 candidates, and at this point, we know one of the reasons why: Of those eliminated, many cities did not have the technical labor pool necessary to fill HQ2’s jobs.
This isn’t a fluke. Despite the economic growth and job creation we’ve seen so far in 2018, many of the 12 Federal Reserve System districts are experiencing labor shortages, according to a government report released in January.
A lack of bodies and skill sets can put a serious strain on cities and the businesses that inhabit them, slashing bottom lines and triggering price increases across industries. Take construction, which saw higher costs last year because companies were forced to hire pricey subcontractors due to a lack of skilled workers. Larger trends such as the increase in automation, the digitization of tasks, and the mass exodus of Baby Boomers from the workforce aren’t helping matters, either.
The bottom line is this: If cities can’t create a strong labor pool, they’ll miss out on more than the bragging rights that come with Amazon HQ2. They’ll fail to not only attract new companies to the area, but also support the ones already there.
In the same way cities try to attract large businesses bringing desirable jobs, many urban centers focus on attracting talented workers who will command higher salaries, pay more in income tax, and contribute to the local economy. What cities are missing out on, however, is the creation of talent, where they introduce more advanced skill sets to the existing labor pool. This way, employees can work better-paying jobs, while companies can benefit from the increased expertise.
Currently, only a few cities in the United States are known for attracting talent en masse — think New York City and San Francisco. When such a small number of contenders dominates the scene, it leaves the remaining cities at a huge disadvantage. Even when an area does have a high share of jobs, such as San Diego’s life sciences and tech opportunities, job seekers are too busy looking elsewhere to notice.
Unemployment may be at 3.9 percent (the lowest rate since December 2000), but underemployment remains at 8.2 percent. Fortunately, all these individuals need is an opportunity to gain new skills, and cities are in a great position to provide that pathway.
Because talent is essential to both attracting new companies and retaining the businesses already there, cities need to focus on cultivating a talented labor force. Here’s how:
1. Develop apprenticeship programs.
By cultivating and supporting apprenticeship programs, cities can encourage more companies to take on junior talent and build their pipeline. Companies benefit because they can teach the specific skills needed to fill open positions, and employees earn a livable wage while gaining crucial job training. Apprenticeship Carolina is one such program. It offers tax incentives to companies that participate in apprenticeship programs sponsored by the Department of Labor along with apprenticeship consultants at no extra cost.
2. Nurture alternative education.
Companies have long relied on traditional colleges and universities to fill jobs, but many simply aren’t producing the quantity of graduates to keep up with demand. Furthermore, as more jobs require technical skills, individuals are turning to alternative training programs built to scale, such as coding boot camps or online courses. Cities provide a plethora of resources to colleges and universities, and it’s time that other training initiatives receive that same support. Many of these opportunities are in IT, and nurturing these professionals will promote additional startup and business growth.
3. Lower the barriers to entry.
There’s an intimidating gap between the number of job openings and the number of qualified individuals to fill them. But there’s also a largely untapped pool of talented individuals who can learn the skills necessary to succeed but who face systemic barriers to entry.
To successfully fill open jobs, cities can’t just create free training programs; they must also make them more accessible for the average citizen who’s already working a 9-to-5. Providing residents with industry-specific training will allow them to fill lower-skilled jobs at an accelerated rate — at which point they can either rely on their on-the-job training or use their salary to pay for additional training opportunities.
Prioritizing attracting talent over growing it locally is like running on a treadmill hoping you’ll win the marathon. Instead, government officials and community leaders should prioritize accessible training opportunities for individuals already living in the region, showing them a path to prosperity that’s well within their grasp.
Jeff Mazur is the executive director for LaunchCode, a nonprofit organization aiming to fill the gap in tech talent by matching companies with trained individuals. As one of the winners of the 2017 MIT Inclusive Innovation Challenge, LaunchCode has been recognized for expanding “the tech workforce by providing free coding education to disadvantaged job seekers.” Jeff lives in St. Louis with his wife and twin girls.