For job seekers, what matters is location, location, and skills

Job seekers need the skills in demand by prospective employers, but perhaps even more important is the location in which the job seekers reside—preferably an area of low unemployment where companies are willing to subsidize education and training.

Unfortunately, many communities don’t fall into that category. Many communities have large numbers of residents with only high school degrees, and even those with jobs earn low salaries and are at risk of losing those jobs to automation and offshoring, according to a new report prepared by the Center for Business and Economic Research (CBER) and the Rural Policy Institute’s Center for State Policy at Ball State University. The report cites the Aleutians East Borough in Alaska as particularly vulnerable to both offshoring and automation.

The situation is quite different in Kosciusko County in Indiana, home to roughly one-third of global orthopedic device production, according to Danielle Paquette writing in The Washington Post. “The lack of laborers not only threatens to stunt the growth of these companies, experts warn, but it could also force them to decamp their home town in search of workers,” she writes.

The Ball State study found that low risk of automation is associated with much higher wages, averaging about $80,000 a year. Occupations with the highest risk of automation have incomes of less than $40,000 annually. Paquette reports that machinists in Indiana certified in high school or by local technical programs can start at $50,000 per year and work their way up, often with the help of employer-subsidized higher education.

Commenting on the Ball State study, CBER director Michael Hicks says, “Automation is likely to replace half of all low-skilled jobs. Communities where people have lower levels of educational attainment and lower incomes are the most vulnerable to automation. Considerable labor market turbulence is likely in the coming generation.” (See this related article for lists of automatable and offshorable occupations as well as the least offshorable and automatable occupations.)

As for Kosciusko County, Paquette at the Post quotes Hicks as saying the lack of job seekers makes the chances of companies relocating “extraordinarily high.” He expects the companies wouldn’t relocate overseas because of quality-control issues and because they want to protect their designs from foreign competitors. They may, however, move to Chicago or Indianapolis.

Paquette explains how one company, artificial-bone giant Zimmer Biomet, is trying to cope with remaining in the area: asking machinists to log more overtime hours and bringing in workers from Puerto Rico and New Jersey, paying for their apartments and cars. The company also donated $50,000 to the local school system’s STEM programs, contributed $2 million for a nearby college’s science center, and underwritten another $2 million for the city’s YMCA.

Paquette quotes Monica Kendrick, head of communications at the company, as saying, “Homegrown is great, but we know we’re growing fast, so bringing people into the community is important.”