Editor’s Note: Northwest Arkansas’ economy didn’t fall as far as many during the recession and is recovering faster. Beginning today and ending Friday, NWA Media explores what’s driving the rebound and how it’s changed our future.
Northwest Arkansas suffered economic downturns before 2008, but something changed with the latest bust and recovery, Marianne Haddock said.
“We have had people come in seeking employment who have a super-good work history, and we couldn’t place them because they didn’t have a GED,” the equivalent of a high school diploma, Haddock said.
Haddock has helped workers and employers find each other in Northwest Arkansas for 29 years. She manages the Bentonville and Springdale offices of the employment firm Manpower Inc. Manpower, which has its headquarters in Milwaukee, is one of the largest human resource consulting firms in the nation.
Getting a job without a high school degree was always difficult before, but a good, real-world work history counted for more, she said — until now.
The recession that started in late 2007 raised the education and skill threshold for getting a job. There is no sign of that threshold going down, years after the worst of the downturn passed, she said.
“During the recession, employers kept their work forces as much as they could, but with the expectation they would do more,” Haddock said. “To do that, they expanded their workers’ skills.”
The most productive workers got to stay during the worst economic times, she said. Now when a job opens up, employers look for a replacement who meets or exceeds that higher skill level, Haddock said.
Haddock’s observation jibes with what Bureau of Labor Statistics data shows, said Michael Harvey. Harvey is chief operations officer for the Northwest Arkansas Council and one of its chief researchers. The council is a group of regional and business leaders.
Overall, Northwest Arkansas’ figures show a recovery, Harvey said. The region has not regained the pace of growth it had during the pre-2008 boom times, but the economy is back up to the level in income and jobs it had before the crash, according to figures. What’s apparently changed is the skills demanded for a job are greater, Harvey said.
Jesse Donohew of Springdale and Dusty Rhodes of Siloam Springs, both diesel mechanics in-training, said they have had jobs lined up for at least a month. They will start as soon as they graduate this month from Northwest Technical Institute in Springdale. Both men are 20 years old and going into full-time employment for the first time after finishing the 18-month diesel technology program at the school.
Both students picked the course because “wherever you are, there are diesels to work on,” as Donohew expressed it.
Rhodes agreed, saying “Why go to school for four years when you can turn around after 18 months of hitting it real hard and have a career?”
Both were familiar with engines, but neither have a family history of working on them.
“We knew enough to keep them going on the farm, but we didn’t dig too deep,” Rhodes said. “Now I’m confident we can do anything with them.”
Employers share that confidence in the program’s graduates, said Keith Peterson, vice president of instruction at the institute.
“Our placement rate for graduates of that course is 100 percent,” he said. The same is true of the school’s nursing program, he said.
Alan B. Hughes, president of the Arkansas AFL-CIO, agreed lower-skilled workers have a hard time recovering from the recession. Lower-skilled workers from different regions within the state now compete with each other for scarce jobs, he said.
“I know people who were laid off at Whirlpool and Rheem plants in Fort Smith who went to a plywood plant in Crossett, moved their families and then got laid off there,” Hughes said. “I’ve heard more people crying in the last couple of years than I ever wanted to hear.”
More and more wage-earners are willing to work out-of-town “and go home to see their families every couple of weeks or once a month,” he said.
Regional employment began dropping in March 2008 and bottomed out in July 2009, according to figures provided by Harvey. There were setbacks in early 2011 and a dip as late as January 2012. Despite this, employment within the federal “metropolitan statistical area” that includes Northwest Arkansas surpassed its March 2008 level in January 2012. The area, set by the U.S. Census Bureau, consists of Benton, Washington and Madison counties in Arkansas and McDonald County, Mo.
The region’s job recovery is markedly better than the national average, Harvey said. Employment in the United States remains well below 2007 peaks. The nationwide number of jobs fell 6 percent below the prerecession peak during the downturn. The number of jobs is still 3 percent below the peak, according to those figures.
“We’re back to where we were, and the nation as a whole is only halfway there,” Harvey said.
Northwest Arkansas recovered more quickly “because our economy is like a V-8 engine,” he said. “Unlike the rest of the country, some of our cylinders always kept firing. They pulled the rest of the engine along until the others started firing again.
“Look at Las Vegas. That was a very housing-dependent economy tied to tourism. Well, people stop going to Vegas when the economy drops off. They don’t stop buying chickens or shopping for good deals at retail.”
Northwest Arkansas is home to major poultry processors and Walmart has its headquarters here.
Incomes overall in the Northwest Arkansas region have grown too, Harvey said. Average incomes in Benton County have caught up with the national average, although that is largely a result of incomes in other regions going flat or falling while Benton County incomes kept showing an increase. Washington County incomes overall also kept increasing, he said.
The finance sector was famously hard hit in this recession, Haddock and Harvey said. The recession was a bust brought on by a collapse in lending, after all. Yet people who lost their jobs in the finance sector are college educated and have recovered more than people whose highest academic attainment was a high school degree, Harvey and Haddock said.
“If you don’t have a high school diploma, you’re really behind the eightball,” Harvey said.
Haddock said she doesn’t think things will ever get back to a state when a good work history will allow employers to hire the relatively undereducated and hone their skills on the job. That is especially true in cases where the applicant has been unemployed for months, she said.
“It was always important to have a high school diploma or GED, but now it’s more mandatory than it was before,” Haddock said. “Employers are looking for that and for more experience. People have to understand — especially young people — how critical it is to complete their high school education.”
People without a degree need to get a GED, she said.