The Unexpected Advantage of Having the Highest Unemployment Rate in Our Region

January 7, 2019

I just received a labor report from our local workforce board showing November unemployment numbers. I already knew what the numbers would say before I opened the spreadsheet: Hutchinson County has the highest unemployment rate of all counties in the Texas Panhandle - again.

The unemployment rate of Hutchinson County currently sits at 4.6%, which is down from 5.2% one year ago and, historically speaking, a very low unemployment rate. Still, Hutchinson County's unemployment rate remains the highest in our region (the 26-county area that makes up the Texas Panhandle). It's also higher than the current national average of 3.7%. I constantly report this number to my Board of Directors, and we've recently taken more steps to address skills gaps by partnering with our local workforce board and community college to invest in training for high demand jobs. It wasn't until recently, though, that I started thinking about how this statistic might be an advantage to us while we work to attract expanding businesses. While unemployment is certainly a harsh circumstance for a family to face, we have to take that hardship and use it to position ourselves for growth. Here's how:

We communicate with companies that unemployment means more available workers who are actively seeking new employment. The Bureau of Labor Statistics' Local Area Unemployment Statistics (LAUS) report states that as of November 2018, 396 previously employed workers in Hutchinson County were currently unemployed and actively seeking new employment. Other than Potter and Randall County, which house the Amarillo MSA, this is the largest pool of available labor in the entire Panhandle region. If a company was expanding to this region and needed an available labor pool of 200 people, Hutchinson County would be one of the few locations that would even be feasible for a company to consider.

We educate employers that unemployed does not mean unwanted or unskilled. Borger is the micropolitan area that drives the economy of Hutchinson County. We're also home to one of the world's largest inland refinery complexes. The cyclical nature of refineries and petrochemical complexes means that workers are hired on and laid off as demand for labor ebbs and flows during large capital projects, such as turnarounds and expansions. Once a project is complete, the unemployment rate for this area may rise slightly and stay that way until the next large project. However, these laid-off workers are highly capable of working full-time in construction, manufacturing, and oil & gas. How do we know that? We know that because of our location quotient.

We use location quotient data to attract primary jobs employers. Hutchinson County's location quotient (or LQ) for the goods-producing super section is 2.6. This economic development jargon simply means we have over 2.5 times the concentration of workers in industries like construction, manufacturing, and oil & gas than the average U.S. location. Businesses in these industries are known as "primary businesses" or "primary jobs employers", which just means that the business is creating something that is being sold or exported outside of the region, bringing outside money into the local economy and creating wealth. So, it is likely that many of the individuals who are currently unemployed already have experience in fields like manufacturing.

You might ask, "If these workers became full-time employees for another company, then what would happen the next time the refinery had a large project and needed labor?" Well, projects that require temporary labor are ideal for importing labor from other areas. In fact, this is already happening. When a large turnaround at the refinery requires over 2,000 temporary workers, companies send people into Borger to work on the project until it is complete. Therefore, the refinery does not need to depend on solely on local workers to fill its short-term needs for labor during large projects.

Although there are several factors (many of them out of our control) that impact the unemployment rate of our area, it is our responsibility as economic developers to use that information, study the labor markets, talk to employers, and develop a plan for creating more employment opportunities in our area.

Happy New Year! And please join us in 2019 by following us on Twitter, Facebook, LinkedIn, and Instagram for industry news, economic development trends, and information on our region as we grow over this next year.

Contact:

Katie Lingor, Executive Director

Borger Economic Development Corporation

1111 Penn St., Borger, Texas 79007

klingor@borgeredc.com

(806) 521-0027