Richmond County faces this predicament if it wants to make a dent in its high poverty rate: It needs to recruit higher-paying jobs, but those middle class income jobs are disappearing from the economy.
In recent years, Augusta has landed about 2,000 customer-service-sector jobs at companies such as Teleperformance, T-Mobile and ADP. But these jobs pay, on average, $11.78 an hour in the Augusta metro area, according to the 2009 Georgia Wage Survey. They are solid jobs, but they don't pay enough to help a person reach middle class status, said Gary Burtless, an economist at The Brookings Institution in Washington, D.C.
"The jobs that produce the sort of wages that can have an impact on a community's poverty rate are in the manufacturing sector," Mr. Burtless said.
Walter Sprouse, the executive director of the Development Authority of Richmond County, said good-paying jobs have been brought to Augusta, referring to those that have been created recently.
He said that "everything is relative" and depends on a community's cost of living. He said that he couldn't say whether some industries, such as manufacturing, provide better jobs. He said it's "like comparing apples with oranges."
"It's almost impossible to draw that parallel because every economy is different," he said.
Troy Post, the executive director of the Development Authority of Columbia County, said local development agencies are always seeking "high value-added jobs." They're mindful that employees need to earn a good living, he said.
"Sometimes those are out there for us to pursue, and sometimes they're not," he said. "We are working to try to identify companies and firms that are trying to make capital investments in the area that would pay decent wages and provide good benefits. ...
"It's very much something that is on the mind of people in this field. We definitely want to attract and be the place that has firms that will provide good-paying jobs to our citizens," he said.
SPARTANBURG COUNTY in South Carolina and that part of the Upstate is an example of how an area can benefit from landing a large manufacturer, snagging BMW Manufacturing USA in 1992, said Carter Smith, the executive director of the Economic Futures Group at the Spartanburg Area Chamber of Commerce.
"It's having a major positive impact on the community. From a standpoint of not only BMW's direct jobs, but also from the suppliers that came into the area and existing automotive suppliers that may have picked up some business," Mr. Smith said.
A 2008 study by the Moore School of Business at the University of South Carolina supports the plant's strong economic impact on the Upstate and the state in general.
BMW Manufacturing has pumped more than $8.8 billion into South Carolina's economy, and for each job created at the company's Upstate facility, 4.3 jobs are created throughout the state, according to the study. The plant generates $1.2 billion in wages and salaries annually and supports 23,050 jobs in South Carolina. The plant has more than 5,000 full-time employees.
"They're easily in the upper half of the market in terms of wages and benefits. Traditionally, manufacturing jobs do pay better than most of the service-sector type jobs. There are exceptions, without a doubt, but as a general rule of thumb manufacturing jobs pay fairly good wages," Mr. Smith said.
But those jobs are vanishing from this country, Mr. Burtless said. And there's fierce competition for those that remain.
"Whenever there is a plant that might locate somewhere, the terrific fights you often hear between different jurisdictions in order to get a BMW plant or a new chip-manufacturing facility," he said. "Lots of local areas around the country fight like heck to persuade the business owner to set up the plant where they are because a lot of the local people can be trained to do the jobs and the jobs tend to pay pretty good wages."
One good thing about having a high poverty rate -- Richmond County's 24.1 percent is higher than the state average and that of neighboring Aiken and Columbia counties -- is tax incentives.
Low-income counties with high unemployment can receive tax incentives in the form of job tax credits from Georgia, said Monty Osteen, a member of the Georgia Economic Development Board and past chairman of the Development Authority of Richmond County. Georgia has four tiers of tax credits. Tier one receives the most tax credits and involves counties with high unemployment and low income, such as Richmond.
Columbia County falls into tier three, which receives limited tax incentives, he said.
"You could say that poverty does have an impact where lower-income areas get higher tax benefits and higher incentives than higher-income areas. That's geared to create jobs where they're most needed," Mr. Osteen said.
Federal programs also exist to spur economic development, primarily administered by the U.S. Department of Housing and Urban Development. If a community qualifies as a low- income or blighted area, it is eligible for certain grants or loans to develop in those areas. In the 1980s Augusta received a $7.5 million, 30-year, interest-free loan that was used for Augusta's Riverfront development, he said.
"The developers were able to get the grant and do the development because it was in a low-income area with high poverty rates," he said.
In addition, several areas in Augusta have been designated as Enterprise Zones by the local government. Georgia's Enterprise Zone Employment Act is designed to improve areas within cities and counties "that are suffering from disinvestment, underdevelopment, and economic decline and encourage private businesses to reinvest," according to the Department of Community affairs.
Enterprise Zone areas must meet three of five criteria, including pervasive poverty as established by the U.S. Bureau of Census.
"I'm not saying that poverty is good, but when poverty is present there are a lot of programs aimed at reducing it and creating jobs in those areas where high poverty rates exist," Mr. Osteen said.
Reach LaTina Emerson at (706) 823-3227 or email@example.com.
AUGUSTA'S RECENT RECRUITING SUCCESS
Some companies that have recently located or expanded in Augusta:
- In July 2008, Teleperformance USA opened a 50,000-square-foot customer service center on Wylds Road near Augusta Mall. The company will grow to 300 employees. Wages will start at about $9.50 per hour, said Bob Massey, the executive vice president for client services.
- Automatic Data Processing Inc. has built a $40 million factory on Flowing Wells Road that will employ more than 1,000 workers at full capacity. Workers will handle the human resources issues and payroll for clients. An official with the company said in 2006 that salaries would range from about the mid-$20,000s to well into the $60,000s, depending on position and skill level.
- Knology has begun construction of a $3.5 million building on Wheeler Road. The cable television and Internet company employs 280 people in its Augusta call center and plans to add 40 to 50 additional employees.
- T-Mobile opened its call center in October 2008.
- Sitel recently expanded its facility, adding 300 customer-service jobs, but the full-time positions start at $8 an hour. The new positions are the result of the expansion of one of Sitel's largest clients, a wireless telecommunications provider.