U.S. Regional Wage Study: Tourism Drags Down Wages, and Implications for Ashtabula County

Increasingly Greater Cleveland and Ashtabula County have looked to tourism as a source of economic development. Tourism is growing in both areas. This is good news, but is tourism a wealth builder for workers? In general, it is not. That doesn’t mean we should lessen our push for tourism development, but it does mean we should give greater attention to tourism business opportunities that provide higher wage jobs to residents.

A new national study of regional wages across the nation points out that tourism-dependent regions, especially in the Sunbelt states, drag down wages for workers. The current issue of Governing Magazine presents the study results, which say many areas with the lowest estimated wages are found along the coasts, particularly in economies tied to tourism. Areas of the South with few higher-paying jobs are also characterized by similarly low cost-of-living adjusted wages. Some of the main drivers pushing wages up or down include regional industry concentration, education levels and housing costs.

The Governing study goes on to say that region’s wages depend to a large degree on the mix of industries and the availability of qualified workers. Regional economies in parts of the South are hinged more to slow-growing industries supporting fewer high-skill occupations that pay well, such as nondurable goods manufacturing.

The Center on Education and the Workforce at Georgetown University has identified a growing gap between the South and the rest of the country in jobs requiring a post-secondary education. The group projects that 65 percent of all U.S. jobs will need some form of post-secondary education and training by 2020; Maryland, North Carolina and Virginia are the only southern states expected to exceed national levels. Much of the South, according to the center, finds itself stuck in a “low-wage, low-skill equilibrium.” Less demand for higher-skilled jobs translates into fewer workers seeking to pursue further training and education. Areas that do have more young college-educated workers risk a brain drain without an ample supply of good jobs.

Read the Governing article.

The take away for Ashtabula County from the Governing study is this:

1. Tourism is an important industry for the county because it builds on the county’s natural asset base, including its water resources, parks and open spaces, and agriculture (grapes and wine).

2. If tourism is to become a wealth builder from a wage and benefit standpoint, the county must concentrate efforts on building highly innovative tourism businesses that use educated and skilled labor and pay higher wages and benefits. The question is what are these businesses? We need to figure that out.

3. It seems to me that Ashtabula County is stuck in the low-wage, low-skill equilibrium described by the Georgetown Center on Education and the Workforce. We need to break out of that position, which requires placing a much higher emphasis on educational attainment in the county on all levels (K-12 and higher education. In conjunction with this push, we need to give more attention to creating high skilled jobs in existing and new/emerging industries.

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