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Referenced From This Company Policy
February 10, 2005
In Northwest Arkansas, Jobs
Are Plentiful in Two Areas:
Professional and Menial
A Tool Maker Switches Careers
By KEMBA J. DUNHAM and KORTNEY
BENTONVILLE, Ark. -- Many Americans got a glimpse of Northwest Arkansas two years ago when socialites Paris Hilton and Nicole Richie milked cows and cleaned chicken coops in the town of Altus on the Fox show "The Simple Life."
Now, north of where the show was filmed, the cities of Rogers and Bentonville are bustling with construction of gated communities. On a recently built stretch of Interstate 540, Cadillac Escalades and three-ton Hummers whiz past cow pastures on the way to a new Starbucks, office buildings and an airport with nonstop flights to Los Angeles and New York.
In a state long known for its poverty, this region is growing fast -- but some are being left behind. As in some other parts of the U.S., a two-tiered labor market is emerging in Northwest Arkansas, with a well-paying rung for college-educated workers and a much lower rung for those with less education or outdated skills. And many of the best jobs are going to newcomers, not to native Arkansans.
The biggest force behind the growth is the world's largest retailer, Wal-Mart Stores Inc., based in Bentonville. Meat processor Tyson Foods Inc. and trucking company J.B. Hunt Transport Services Inc. have also helped turn the area into a business magnet. Hundreds of Wal-Mart suppliers, start-up companies and upscale retailers have flocked here.
"I've lived in a lot of towns and I've never seen as much opportunity as I've seen here," says 35-year-old Mark Reasoner, who arrived with his wife in 1999. Mr. Reasoner first worked on Nabisco's account with Wal-Mart's Sam's Club stores. After several job changes, he's now in charge of Wal-Mart and other big accounts for sports-equipment manufacturer Spalding, a unit of Atlanta sporting-goods company Russell Corp. He says his income has risen significantly from the $45,000 a year he first made in 1999.
The Milken Institute, an independent economic think tank in Santa Monica, Calif., ranked the Fayetteville-Springdale-Rogers area No. 1 in 2003 and No. 7 in 2004 in its "best-performing cities" index. The index ranks U.S. metropolitan areas based on their ability to create and sustain jobs.
But the boom isn't helping Terence and Crystal Hale, a Springdale couple with two small children, who together earn $20,000 a year. They say jobs at the many restaurants and manufacturing plants in the region that have "now hiring" signs don't pay enough to sustain a family. Mrs. Hale, a native Arkansan, makes $7 an hour working at a local Head Start program. Mr. Hale, a unionized welder, says few factories are hiring permanent full-time employees. In his field, he says, "there are no good-paying jobs here."
The U.S. economy created 2.2 million jobs in 2004, the largest annual gain since 1999 and a number that nearly reverses the 2.3 million jobs lost from December 2000 to December 2002. Economists have debated how many of those new jobs are well-paying and how many are undesirable ones near minimum wage.
In Northwest Arkansas, "there's a lot of job creation in the high end and the low end, but not a lot in the middle-income sector," says Jeffery Collins, director of the Center for Business and Economic Research at the University of Arkansas's Sam M. Walton College of Business.
Northwest Arkansas is still in an early phase of its boom, and it could spread to people such as the Hales as the region develops. Over the longer term, the influx of higher-income people could improve schools and social services, helping the next generation get prepared for well-paying jobs. Donald Ratajczak, an economic forecaster and retired professor at Georgia State University, says it's no surprise that the revival of Northwest Arkansas would begin with a smaller high-income group. "Even though the gap is widening now, it's OK as long as there is enough mobility," he says. "But if you never see people from the lower-income group advancing...then you have problems."
Even within Arkansas, the northwest used to be considered poor. In earlier decades, agriculture and manufacturing were the main livelihoods and thrived in places such as the Mississippi delta in the east. The northwest was isolated and supported predominantly by marginal agriculture, low-skilled manufacturing and the University of Arkansas in Fayetteville.
Today, the region has developed good infrastructure with the help of business leaders including the Walton and Tyson families. The Northwest Arkansas Regional Airport, which opened in 1998, Interstate 540 and the Beaver Water District all have been a boon to area businesses.
Between 1989 and 1999, the number of households in Northwest Arkansas with an income of $125,000 or more increased more than sevenfold to 5,860. Per capita personal income in Fayetteville-Springdale-Rogers rose 2.9% to $24,788 in 2002, the latest figure available. That's above the national increase in per capita income of 1.2%, according to the Bureau of Economic Analysis.
"We're getting extremely highly paid executives moving here and to keep them happy, we're getting good schools, good entertainment and an exciting intellectual community," says William Schwab, chairman of the sociology department at the University of Arkansas in Fayetteville. He calls this a "double-edged sword" because "the difference between the rich and the poor is becoming exacerbated."
A lot of jobs are passing Arkansans by. Andy Murray, chief executive of Saatchi & Saatchi X, a Springdale-based unit of Publicis Groupe SA's Saatchi & Saatchi, said he hired 15 design and marketing professionals last year, all from out-of-state cities such as New York and Dallas. For entry-level positions, he recruits locally, but only the "very best talent" from area universities. "It's just very difficult to find people here," says Mr. Murray, whose unit advises clients such as Procter & Gamble Co. and Perdue Farms Inc. on in-store marketing. "We need people who are used to doing advertising for major brands, and there aren't a lot of people in this market in our profession."
Erica Groshen, an economist at the Federal Reserve Bank in New York who has studied the job market, says that attitude is typical among employers. "In Northwest Arkansas, firms are looking for people who have the desired skills when they walk in the door," she says. Companies "are no longer looking to hire people they expect to keep for a long time and have to train."
The demand for talent helps Mr. Reasoner, who moved to Northwest Arkansas from Memphis and received an M.B.A. from Webster University in Fayetteville. He has switched jobs three times since 1999 and says each time he was recruited by companies offering positions with more responsibility and a higher salary. He lives in a subdivision in Rogers, one of several referred to as "Vendor Village." Land around the subdivision has been developed in recent years with more high-end homes, a golf course and an office building.
Dale Baughman, who has lived in Northwest Arkansas all his life, has had a different experience. Three years ago, the BB-gun manufacturing plant where he worked for 29 years closed and he lost an $18.50-an-hour tool-making job. "It's hard to find a job and the ones you can find don't pay anything," says the 52-year-old, who has a high-school diploma. He looked for machine-maintenance jobs at factories that would match his old pay but found only ones paying $12 to $13 an hour. He partly blames a rise in immigration, which he says is keeping wages low for less-skilled labor.
Mr. Baughman, who is divorced, gave up his lakeside home in Rogers after his layoff and moved back to his mother's farm. He got training to be a truck driver and now earns $900 to $1,000 a week but spends much of his time out of state on long-haul routes because local routes pay only $8 to $10 an hour.
At Northwest Arkansas Community College in Bentonville, a center teaching job skills opened in September 2003 and has developed several training programs to help people acquire licenses in areas such as heating and air-conditioning. It has also started a course around the needs of Wal-Mart vendors, which are looking for marketing analysts who can crunch sales numbers and figure out how to move merchandise faster. Such analysts can earn $30,000 to $120,000 a year.
However, the course costs $2,495 and requires applicants either to have taken college algebra and several English composition courses or to show a medium level of proficiency in those subjects on standardized tests. More than 70% of the students are college graduates. "We want to embrace all members of the community, but we do have requirements," says Shawn Beezley, the program's coordinator.
Other workers agree that immigrants from Latin America are helping employers push wages down in jobs such as construction, where some native-born workers say they earn less now than they did 10 years ago. According to the Census Bureau, 6.9% of the area's population was foreign-born in 2000, up from 1.5% in 1990. In addition to Latin Americans, Springdale has the largest concentration of people from the Pacific Ocean's Marshall Islands outside of their native land -- an estimated 4,000 people, many of whom work in local factories and poultry plants.
James Bishop and Lisa Broadwell are longtime residents of Northwest Arkansas and both have years of experience in a trade: Mr. Bishop in machining and Ms. Broadwell in dry cleaning. Yet both are underemployed. "Hispanics are taking over the jobs in the poultry industry -- jobs that used to go to people who live here, and as a result, those people that used to be in the poultry industry are taking over our jobs," Ms. Broadwell said.
The couple spent much of last year in a homeless shelter before moving into a home recently. They picked up odd jobs such as weeding, lawn mowing and construction site cleanup for $7 to $12 an hour. But the work is unpredictable and Mr. Bishop, 49, finds it strenuous dumping heavy concrete blocks at construction sites. "I never had a problem getting a job before. I could walk out of one job into another," said Mr. Bishop. "But nowadays the average person here cannot survive in this area." He has applied for several factory machinist jobs paying up to $11 an hour, but competition was heavy and he didn't get any.
Kimberly Gross, executive director of Seven Hills Homeless Shelter in Fayetteville until several weeks ago, says when the shelter opened four years ago, only one person came for help. Last year, an average of 64 people came through the shelter each day. "It's our dirty little secret," she says, "since a lot of people who are struggling and homeless are living in the woods, not panhandling in the street."
Write to Kemba J. Dunham at firstname.lastname@example.org and Kortney Stringer at email@example.com
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