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Should Developers Pay A “Pipeline” Fee?

by Paul Bass | Feb 14, 2012 11:46 am

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Posted to: Business/ Economic Development, Jobs Pipeline

Paul Bass Photo As New Haven moves to connect local people to local work, developers will either put “skin in the game” or face demands that will make them flee town—depending whom you ask.

That debate arises now that labor-backed aldermen have voted to have the city form a “jobs pipeline” to link unemployed New Haveners to jobs in town, at a time of 11.7 percent unemployment in the city. They’ve given a working group 90 days to draw up a detailed plan for that pipeline. Some of the aldermen have specifically proposed requiring developers like Carter Winstanley to guarantee hiring specific numbers of New Haven people in return for receiving government help.

Mayor John DeStefano has embraced the “jobs pipeline” idea too but argues it makes no sense to put such requirements on developers—especially since they build the real estate but don’t occupy the buildings or hire the permanent workers.

Who’s right? Should the city create a “jobs pipeline”? If so, how should it work? And what’s the best way to engage business?

Three guest Independent “Pundit Dream Team” members—New Haven State Rep. Gary Holder-Winfield, Local 34 (Yale clerical & technical workers) union President Laurie Kennington, and Business New Haven/ New Haven magazine publisher Mitchell Young—addressed the questions with each other over half an hour on a live Google doc. The results follow:

* * *

“Skin In The Game”

Thomas MacMillan Photo Mitch Young: I’m very sympathetic to folks that see a billion dollars spent on promoting the “egghead ” economy, but they have no access to a job, decent or otherwise. Unfortunately this is just a continuation of the Plantation Economy that some would build in New Haven.

The business community started the discussion of education reform in our newspaper in 1994. The first reaction was to call them racists; I was called a racist myself by high-ranking government officials for calling for reform.
 
We [Business New Haven] have steadfastly been against almost every government proposal to fund businesses, with the exception of workforce development.

Laurie Kennington: One of the biggest problems with existing programs is that people are being trained based on the skills employers say they need, but when people are job-ready, employers still aren’t hiring them. It only makes sense to ask employers to put skin in the game so that all stakeholders have a shared interest in the program’s success.

Gary Holder-Winfield: The concept of a jobs pipeline makes a lot of sense to me. If it is that people are really in a pipeline—meaning training and matching up to jobs for which they are then qualified—I am for that. 

Mitch Young: I have talked to hundreds of business people over the years, about education, job creation, government programs. I can’t tell you how many don’t even want to take an SBA [Small Business Administration] loan because they don’t want involvement from another entity telling them what to do. If we’re talking about the major developers—Yale, they did great in bringing a diverse workforce to their job sites. They, and frankly Mayor DeStefano, were the ones that pushed the unions and the employers to change the makeup of the construction workforce. They did a great job compared to what it was in the ‘70s.

Is This A Stick-Up?

Mitch Young: Let’s be clear—some folks claiming to be the “community” essentially demanded jobs from one of the best companies in New Haven, a company that is working harder than any I know for the betterment of New Haven, Higher One. In fact we just declared them our Corporate Citizen of the Year. I don’t know of another company that is on their scale that would make the effort to be in New Haven and Science Park that they made. To focus on what it took to put them there is completely self-destructive.

Gary Holder-Winfield: Mitch, whether one agrees with the tactics and who was focused on, the people you are referring to are a part of the community and reflect the sentiment of many within the community. 

Mitch Young: As I said, I think they should be frustrated with the trickle-down thinking being deployed by some. The solution is not to keep independent business people from coming to New Haven.

Gary Holder-Winfield: I don’t think they see it as such. And perhaps some would see it as creating an atmosphere that is not conducive to courting business, but the people in the community are looking for the businesses to be what they would describe as better partners. That can be quibbled with of course, but that is what it is

Laurie Kennington:The resolution that the Board of Aldermen presented doesn’t make specific recommendations about specific developers. The plan that I support is to bring all key players to the table to make this work. Mitch, do you think it makes sense to try to start this discussion and get buy-in from everyone involved?

Mitch Young: The discussion that needs to be is whether we need to look beyond the “egg head” economy and the trickle-down thinking. We just challenged [State Rep.] Brendan Sharkey about his position to not rebuild an agriculture committee. Why we see it as important, it represents a route to jobs for people today, not 20 years from now. We see more food manufacturers, like Chabasso, being born out of a revitalized ag sector. Governor Malloy said think big; we agree.

The first thing we should do is examine the bus routes to the suburbs and see if they are efficient in getting people to existing jobs.

Laurie Kennington:I agree it makes sense to have as diverse an economy as possible, but given where New Haven’s growth is happening now, doesn’t it make sense to figure out how to connect residents to the new jobs?

Gary Holder-Winfield: Laurie is on point about bringing everyone to the table. That is how a real jobs funnel works. It isn’t done by force.

Laurie Kennington:In our union, we know that “Eds and Meds” [education, higher-ed, medical, and biomedical] jobs are attainable. It doesn’t take 20 years to train people to do a lot of the work to support biotech and medical research. 

Gary Holder-Winfield: Examination of transportation infrastructure is necessarily a part of this discussion and not always what is brought up. We are taking about dense communities with people who rely disproportionately on public transportation. If the system in place doesn’t work then we have a major issue whatever we do with a jobs funnels

Who Lost Biotech?

Paul Bass File PhotoMitch Young: We were the first to write about biotech in 1994. A billion of dollars of private investment later, I think we have two or three viable non-research companies. Neither is in New Haven. We lost our major pharmaceutical company; this is not where to focus for the community. Higher One did not come out of any public help, smart kids built a company. I’m not sure they have one customer in Connecticut yet, and they sell to colleges, keeping them in New Haven—amazing.

Laurie Kennington: One reason we have lost biotech companies is that we don’t have trained workers here. We need a robust pipeline that is attuned to the needs of employers. Let’s dig in and figure out how. I believe that we are lucky because a lot of the major employers here have a long-term interest in the health of this community. That creates an opportunity for this kind of thinking.

Mitch Young: This is not why the companies were lost. Every biotech executive I’v e talked to has said they get the key people from wherever around the world; they are science companies. We lost Bayer, because the attacks on pharmaceutical companies caused a bunch of mergers. It is not a workforce issue. What we should be concerned about is the coming crushing shrinkage of hospital jobs that will come to the Northeast.

Laurie Kennington: Just to clarify, I mean that we have lost biotech start-ups when they are transitioning from R&D [research and development] to manufacturing. Let’s talk about industries that are already here instead of speculating about the economy we would like to have. There is economic growth in New Haven; it just doesn’t currently match the skills of people who need jobs.

Mitch Young: I have fought this battle in New Haven for 17 years. One billion for the egghead economy, almost nothing for the rest. That is one company in Connecticut, Alexion, nobody else has gotten that far.

Laurie Kennington: Clearly, the government is committed to this question. Regionally, $12 million was spent on workforce training, but only half of adult participants secured jobs, and those jobs earned an average of $11,500. How can we spend this money effectively? 

These are tough economic times, but parts of New Haven had disproportionately high unemployment prior to the crisis. History has shown us that moments of crisis are also great moments of opportunity. Now is our chance to put programs in place to make structural changes. We have a unique moment now because many key players: government, employers, labor, community leaders are interested in figuring out solutions.

Gary Holder-Winfield: This conversation focused understandably on bioscience. The issue is the jobs pipeline, which is broader than that. The issue is what is meant by it and whether as Laurie asks the players will be sitting around a table to make it work. I for one hope they do because it is one prong in dealing with the issue we have in our city.

Mitch Young: It’s not about programs, it’s about an environment that supports business development. New rules will just send businesses to the next town. Focus on adult education. New Haven needs to go beyond this idea of training to a community of people who are committed to success; that’s not what this program is.

Gary Holder-Winfield: Programs have an effect on environment.

Laurie Kennington: I agree with Mitch that past programs have not succeeded. We don’t need more of that! and we should be a place where business wants to come. Let’s do that by a NEW strategy that prepares residents to be ready to meet business needs.

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