The development dilemma

Labor shortfalls, changing demographics challenge economic successes

Posted by , Insight on Business Staff Writer

By all accounts, it’s been a big year for growth in Brown County.

Employment is up 2.5 percent, as are weekly wages, 0.9 percent, and median household income, up about 2 percent. Housing starts across the county have made a comeback, while manufacturers have reported growth in both actual sales and projected sales for the coming year.

It seems in every corner of the county, a transformative project has either concluded or is underway, from a walkable downtown rising from what once was a vacant field in Hobart to plans for invigorating the south end of Broadway through the Shipyard project to the ongoing transformation of Ashwaubenon and the greater Green Bay region as Titletown continues to take shape.

There are a lot of great reasons to be optimistic about the region’s future.

“There are a lot of things going well right now,” says Kevin Vonck, director of economic development for the City of Green Bay. “It’s an exciting time to be involved in economic development.”

But as promising as the indicators and the projects appear — and they are promising —  the county faces a growing challenge that threatens to slow, or even derail, the success of the past several years: an ever-shrinking pool of available workers who build the buildings and craft the many products manufactured in the region.

It’s a trend county economic and government leaders have been watching for several years, but the intensity of its effects, and the desire to find a long-term solution, has reached a crescendo the past few years as demographic and economic forces have combined to put incredible pressure on efforts to expand the workforce.

“It’s going to be a challenge, that’s for sure,” says Jim Golembeski, executive director of the Bay Area Workforce Development Board. “We have been talking about the baby boomers retiring for 15 years, and now we have hit the strongest part of that trend.”

The shrinking labor pool has cost the county opportunities in the past. Insurance provider WPS Health Solutions recently located a new facility in Hampton, Va., after looking at sites in Wisconsin, including Brown County. The reason: The company could not find the 900 workers it needed.

“I’d love to have it in Madison or De Pere,” says Mike Hamerlik, the company’s president and CEO. “We just could not find the people.”

For now, that is the exception. But across industries, everyone has their eyes on the shrinking talent pool. Three other factors have combined to exacerbate the demographic trend, Golembeski says: The economy is expanding, a substantial portion of the millennial generation is caught in a skills gap, and the generation that follows them, which he refers to as the “cloud generation,” is much smaller in numbers.

Those shifts are happening at the same time the county is enjoying an unemployment rate of 2.6 percent, according to the latest preliminary numbers posted by the Bureau of Labor Statistics. Full employment is about 4 percent.

Essentially, almost all people who want to be employed are employed. The pool of unemployed candidates available to companies to fill vacancies fell steadily in 2017 and is now fewer than 4,500 people, according to the latest BLS data.

Yet, the number of people employed has been declining slightly, meaning the county is already starting to see more people leaving — baby boomer retirements — than it can replace.

“Our worst enemy is demographics,” Vonck says. “Our workforce is getting older, and we are not replacing it as quickly. We have been working with the Greater Green Bay Chamber and some of our other partners to look at our strategic advantage in terms of innovation and economy.”

Fortunately, one strategy can help stem the tide short term. Faced with similar challenges a decade ago, the NEW Manufacturing Alliance developed a model for both attracting talent and growing it through better relationships with the schools. Golembeski says that model can be adapted by other industries facing those same challenges.

Brown County officials have been active in efforts through New North Inc. and state initiatives to attract new talent to the region, while education and industry partners have been working together to meet recently adopted career planning initiatives.

“Once we can realize the effort to work with our middle and high schools to align with the needs of our core industries, that will solve the problem,” Golembeski says. “But that takes time.”

With one eye on the talent challenges, Brown County still can expect some big projects to continue reaping big benefits in 2018. Some key things to watch include:

The future of Titletown

In late 2017, the Green Bay Packers opened the public plaza, sledding hill and skating rink, which joined anchor development tenants Lodge Kohler, Hinterland Brewery and Bellin Health Titletown Sports Medicine & Orthopedics. Phase 1 included two years of construction and a $60 million investment by the Packers.

Almost as soon as the new features debuted, the Packers announced the start of the next transformation of the Ashwaubenon neighborhood surrounding the stadium: TitletownTech, a one-of-a-kind partnership between the Packers and Microsoft to bring world-class expertise and innovation to the Greater Green Bay area.

The $10 million development will include a business accelerator, venture capital fund and a tech lab that will help local firms innovate and develop new solutions to grow their business. TitltetownTech will play a key role in fostering the residential and commercial developments the Packers have planned in the next phase of the project. It’s expected to completed in the fall of 2018.

Phase 2 will include residential, commercial and retail development. The area is expected to become a vibrant neighborhood attractive to young professionals and entrepreneurs, where they and their families can live, work and play.

“I think anything that helps make Green Bay more attractive and provides more things you can do when you are here in this community, that’s a positive,” Green Bay Packers President Mark Murphy says. “Five years from now, we hope it’s a vibrant neighborhood with a lot of people living in it.”

The Shipyard

The city council has approved agreements for the indoor concert venue and 4,000-seat outdoor venue as part of the Shipyard development. Both are considered key pieces of a planned $13 million development to convert vacant, city-owned property along the Fox River into a multiuse sports, restaurant and concert venue.

With supporters such as Mark Skogen, CEO of Festival Foods, and a financial commitment from the Green Bay/Brown County Professional Football Stadium District, the project seems to have the momentum it needs.

Residential housing

Apartments are popping up across the county, from Howard to Ashwaubenon, as developers look to keep pace with demand for housing from young professionals and retirees alike. At the same time, homebuilders are reporting strong demand for single-family homes.

For now, the biggest drawback seems to be finding enough construction workers to keep up with that demand.

Data maintained by the Wisconsin Realtors Association shows that had sales not taken a slight dip in September and December, Brown County would have seen its sixth straight year of increased housing sales. The county saw 3,502 homes sold in 2017, slightly below the 3,595 sold in 2016. At the same time, median housing values have increased each year since 2012, topping out in 2017 at $169,000.