Friday, March 09, 2012HERMITAGE, Pa. – The secretary of community and economic development, C. Alan Walker, is encouraged by the reindustrialization of Pennsylvania, he told Penn-Northwest Development Corp. Thursday, and urged the commonwealth to pursue the Republican strategy for faster economic growth, lower taxes and less bureaucracy.
He also urged his audience of Mercer County business leaders and businessmen – “opinion leaders,” he called them -- to get the message out, “Low taxes and less government spur job creation.”
As this message sinks in, he said, “Better times are not only possible but soon to come.”
The luncheon event was hosted by Penn-Northwest and co-sponsored by chambers of commerce in Mercer and Lawrence counties. It took place at the Avalon Country Club at Buhl Park.
The rate of unemployment in the Keystone State is 1% below the national average, Walker reminded his listeners and continues to fall. Pennsylvania employers have 200,000 jobs they’re looking to fill, the secretary said.
The problem is the people who possess the skills needed to fill them are lacking. The Corbett Administration is attacking this situation on two fronts, Walker reported. One is a program that allows those laid off to continue to collect unemployment insurance and work up to 30 hours a week learning a new job. Called “Keystone Works,” Walker described it as “a great program that will help people transition back into the workforce.”
Another would lend the owners of small businesses funds to train their workers so the workers can acquire the skills needed in manufacturing. “We [the state government] have a lot of assets [funds] that are just sitting there,” he stated. By lending small-business owners funds from the Liberty Financing Authority, he explained, the state could provide $100 million to $200 million to train workers so they could fill jobs requiring more qualifications.
Employers would repay the authority from their increased profits and those funds could be re-lent other employers for train their workforces. “Pennsylvania needs a trained workforce,” the secretary declared.
While such steps would help the Pennsylvania economy, Walker said, he allowed other factors are holding growth back. One is the number of people, mostly young people, who fail alcohol and drug tests when they apply for jobs in manufacturing and transportation.
He also lamented statistics he cited that show only one in 15 people who graduate from a Pennsylvania college or university with a teaching certificate stays in Pennsylvania. And only one in eight physicians who earns a degree from a medical school in Pennsylvania stays around to practice in the state.
One the bright side, with the many new jobs resulting from exploration and drilling in the Marcellus and Utica shale, 85% of those jobs are held by residents of Pennsylvania, he said.
Walker is also encouraged by the “reshoring” trend, that is, companies that left the United States and built plants and factories abroad seeking to pay lower wages are returning. They learned that with lower wages came a lower quality of work, he said.
He cited Hershey Foods returning from Mexico to Hershey. When that reshoring is complete, Walker said, the workforce will number only 100 fewer than when Hershey left for Mexico.
With 42 years spent in the private sector, Walker thinks government in general -- and the Department of Community and Economic Development in particular -- has much to learn from how business leaders run their companies. The last time Community and Economic Development wrote a strategic plan was 10 years before he became secretary last April, Walker said. Team Pennsylvania, a private entity, underwrote the expense and the department today has an updated strategic plan.
He lamented the fact that he cannot reward his staff for good performance as he did in the private sector. This inability makes it hard to retain good employees, Walker said.
Two lessons government must learn to remain effective – lessons too many private companies lost sight of – are adapting to change and remembering that failure to plan is planning to fail. Politics too often gets in the way of government programs that can encourage and aid economic growth, Walker said.
In the first half of the 19th century, a system of canals seemed to hold the most promise for citizens in the western United States to ship goods east. Indeed, in 1829, Martin Van Buren, then governor of New York State, wrote President Andrew Jackson of the threat railroads posed to the Erie Canal and other waterways in western New York. In reminding the president how many canal employees voted, he urged Jackson to take steps against the railroads. (Van Buren succeeded Jackson as president.)
“Van Buren lost sight of the big picture,” Walker noted.
Walker thinks the Pennsylvania Legislature would benefit from having more businessmen in its membership, representatives and senators who understand what it takes to run a company and apply those lessons to government, including not losing sight of the big picture.
The secretary also urged state support of technological research and development. “This is creating the next generation of jobs,” Walker said, and he would have Harrisburg get behind those engaged in R&D so the commercial applications of their research is realized.
“I hope we can innovate faster than the Chinese can steal our technology,” he said.
Copyright 2012 The Business Journal, Youngstown, Ohio.