Situation is critical

October 16, 2003

Bulletin Staff Writer

Henry County and Martinsville need a comprehensive, sustainable economic development strategy if the area is to address four key concerns, according to an economic and demographic profile of Henry County and Martinsville.

Those concerns, according to the profile, are a shrinking work force, a relatively weak work force, low income data and an unsustainable economic structure.

"The most important problem facing Martinsville-Henry County is that it cannot continue to rely on the historical manufacturing sector if it wants to achieve and sustain long-term economic growth," the profile's conclusion states. "The steep unemployment levels are no doubt due to the many manufacturing plant closings and layoffs that have occurred," primarily from the closings of Tultex Corp., VF Imagewear and Pillowtex.

The loss of manufacturing jobs is occurring nationwide. In the fall of 2002, the "Kiplinger Letter" reported that by 2010, an estimated 900,000 U.S. jobs, mostly in manufacturing, would be moved to China, the profile states. It adds that furniture imports from China represented 31 percent of the U.S. total in 2001, and that estimate was expected to double within a few years.

"With the furniture manufacturing sector representing at least 12.8 percent of total employment in the Martinsville-Henry County area as of the first quarter of 2003, it is very likely that the area will continue to experience significant job losses if it does not aggressively pursue an appropriate economic development strategy," the profile adds.

The 66-page profile was compiled by Market Street Services of Atlanta. The profile is part of a $250,000 economic development study commissioned by the Chamber's Partner for Economic Growth (C-PEG), and funded by a grant from The Harvest Foundation for C-PEG. The study was the brainchild of the Martinsville-Henry County Chamber of Commerce, according to chamber President Kim Adkins.

Higher-paying jobs are needed along with economic diversity, the profile states. It said Gov. Mark R. Warner's recent announcement to try to boost racing-related employment and a larger tourism economy for the area may help, but it notes that entertainment and tourism-based jobs traditionally are not the highest earning in a community.

One bright spot in the report is the area's health care sector. "Memorial Hospital is one of the area's greatest assets, and if effectively pursued, the hospital may prove to be a source of economic growth that can improve both employment opportunities and the earnings base of the community. Clearly, diverse, multiple strategies are needed to improve the economy of Martinsville-Henry County," the profile states.

But the overall report paints a bleak picture of the area. It includes 46 pages of statistics, charts and data which reveal, among other things, an aging population with a large number of adults without a high school education, average incomes below the state and national means, thousands of jobs lost and a rising number of people commuting to jobs outside the area.

Based on these and other data, Market Street identified the four key recurring themes that need to be resolved to improve the region's economic health:

The shrinking work force: In 2000, the city had 9,488 people aged 18 to 69 and the county had 38,990. That represented an 8.6 percent decline since 1990 in the city and a 0.4 percent decline for the county in the same period.

In the city, the largest portion of the population loss in the 1990s was due to more deaths than births, the profile states. From 2000 to 2002, both the county and city lost population primarily due to people moving out of the area. "If this decline continues to occur, it will be difficult to attract new businesses to the area and encourage existing business to expand," the profile states.

Weakness of the work force: The area's higher percentage of adults without high school diplomas is "seriously undermining the quality of the available work force," the profile states.

Education attainment improved from 1990 to 2000, "but this is still an issue the community will need to address," it states.

The profile also notes that the city's crime and teenage pregnancy rates are "quite high, harming the quality of life and future potential of the community."

Low-income community: The area has a higher percentage of the population living below the poverty line than the state or country, and those levels are increasing even as the state's and the country's decline, according to the profile.

Almost all of the area's employment sectors have average weekly wages less than that of the state, the profile states. The state's manufacturing sector has an average wage of $782, compared to the city's $566 and the county's $510. The largest manufacturing subsectors, furniture and textile mills, pay only $433 and $456 respectively.

"These are not promising statistics for a sector that is such an important component of the present Martinsville-Henry County economy," the profile adds.

Unsustainable economic structure: "The significant decline in labor force participation rates in the city and the county indicates that many individuals have stopped looking for jobs and removed themselves from the work force. This suggests that the need for employment is likely even greater than the recent high unemployment rates ... indicate," the profile states.

Labor force participation is the percentage of people ages 18 to 69 who are working or unemployed and seeking work. It does not include those who have retired, stopped working to raise children or those who stopped looking for work because they could not find a suitable job, or who have left the work force for other reasons.

Diversification of the economy is needed, the profile states, and there needs to be a better correlation between sectors that employ the most residents and those that pay the higher wages.

"The community will need to address all of these concerns in order to recover from its recent economic hardships and ensure success in the future," the profile adds.


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