Archive for July 18th, 2011

Two reports are out and cited in the Winston-Salem Journal this week state it will be three to four years before unemployment in the Triad area returns to pre-recession levels. I won’t repeat the quoted findings The Journal quotes, you can read them here, but I do question any such report. There is a clear exodus from the Winston-Salem area. This exodus may help lower unemployment rates by simple adjusting the numbers of employable workers but it is a major drain on the pool of skilled employees. This in turn reduces the area’s outlook for generating new jobs as businesses look elsewhere with lower taxes as well as a better educated and trained work force. If you don’t think that is what happens then look at this quote I will take from the paper by a senior economist at Wells Fargo Securities.

"We believe a large proportion of today’s high unemployment is structural in nature, resulting from a huge skill mismatch between the jobs being created and the existing skill sets of jobseekers," said Mark Vitner, a senior economist with Wells Fargo Securities.

Winston-Salem Journal, July 15, 2011

As I have stated in the past with a shrinking business climate and fewer worker bees you will see a general drop in revenue generated for the local governments. This will result in those governments being required to drastically cut budgets and that means laying off more workers, granted we could do with some trimming of public employees around here. Those cuts however won’t be enough to meet deferred cost on expenses the city of Winston-Salem has taken on such as the Baseball stadium and surrounding obligations or plans for a downtown rail line. As the city will have to meet those obligations the only way to do it in a generally smaller and smaller revenue pool is to raise tax rates. Raising taxes on a workforce that is already leaving the area due to high unemployment will just exacerbate the situation in my opinion and in general delay but not solve the problem. As people are taxed more, see fewer opportunities there is a delay in the ultimate leaving of those workers for other areas of the state or country but it is only a delay as they make those plans, it does not stop the migration or the ultimate result.

Maybe it’s time for The Chamber, The Mayor, Winston-Salem Business Inc., Winston-Salem Alliance to stop chasing “Boys of summer” dreams and start wondering why small business after small business is moving outside of the Winston-Salem area or how a almost 43,000 square foot building set empty for TWO YEARS in a prime retail location? By the way I am speaking of the old Circuit City building on Hanes Mall which finally sold in May to a developer who plans to repartition the location into a multi-tenant space.

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