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Study says low salaries gives regional development an edge

September 18, 1997

By KERRY LYNN FRALEY

Staff Writer

Salaries lower than the national average give the region's I-81 corridor a leg up in attracting and keeping jobs, according to findings of a regional work skills study released Wednesday.

The study - commissioned by the Quad State Technology and Manufacturing Consortium (QUADTEC) - looked at workers and employment in Washington County, Md.; Berkeley County, W.Va.; Franklin County, Pa.; and Frederick County and Winchester, Va.; during June.

Intended to inventory work force skills existing in the four counties for economic development purposes, the study addressed levels of unemployment, underemployment, occupation trends, training and retraining needs and identification of potential new users of skills existing in the region.

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One advantage those counties have in bringing in new business and fostering expansion in existing businesses is lower salaries than nearby metropolitan areas, according to the study report.

Non-manufacturing jobs in the four counties pay an average of 14 percent less than the national average for corresponding work, said Clinton Hoch, president of Corplan Inc., the West Orange, N.J., consulting firm that conducted the study.

That makes the cost of doing business "reasonable, not cheap" for employers, said Hoch, who said the wage gap is partially offset by a cost of living 10 percent lower than the national average.

In the interest of economic development, he recommended keeping salaries at the "reasonable" level.

"If you upset the apple cart then you lose out," Hoch said.

A lower cost of living and higher quality of life generally make up for the lower salaries in keeping quality younger workers from leaving the area, said Michael J. Wagoner, executive director of the Tri-County Council for Western Maryland.

"Yes, our wages are a little bit lower, but it's certainly a better place to live than Baltimore or Washington," Wagoner said. "All of us would like to make more money, but I don't think you'll find the general public complaining."

While he said he could understand the concept of keeping costs down for manufacturing, Hagerstown Mayor Robert E. Bruchey II said he had a problem with viewing low salaries as a good thing.

"I don't see that as a plus really," said Bruchey, who said it's hard to tell high-quality workers to locate in an area when you don't offer them competitive salaries.

Bruchey said he did agree with the report's recommendations to get business involved in cultivating a skilled work force to meet the area's needs.

Among Corplan's suggestions were that local businesses establish a shared apprenticeship program to train potential employees and that business people go into the schools to talk to students about the income potential of in-demand trades.

Hoch said business people interviewed during the study complained of the poor quality of students coming out of local schools.

"This is a common complaint throughout the country, but we don't hear it as loudly as we did here," Hoch said.

Beverly A. Baccala, economic development coordinator for Washington County, said she has heard employers complain of graduates with insufficient problem-solving and teamwork skills, which they say should be addressed in the schools.

Other study findings include:

* The region has a strong and diversified manufacturing economy, providing 25 percent of total private employment in contrast to the national average of 10 percent.

* Because of reassignments, the closing of Fort Ritchie will only result in 20 to 30 displaced workers being released into the workforce.

* The downsizing of Letterkenny Army Depot will result in about 600 workers entering the workforce. Highly skilled artillery workers will lose their jobs. However, since they'll have the option of bumping employees at a lesser skill level, it's uncertain what types of workers will enter the workforce.

Because companies in the I-81 corridor employ a regional workforce, growth in one of the counties benefits all of them, so it's critical to look at the entire region in economic development efforts, local economic development officials said.

The Corplan study will provide a good base to work from, Baccala said.

Now it's up to economic development leaders, the business community and educators to take the information and come up with a cohesive regional plan, she said.

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