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Wages Play Key Role As Louisville Seeks To Boost Workforce

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Louisville leaders are looking to increase the city's share of high-paying tech jobs, but wages present a sticky issue for economic development officials.

Wages here are about 10 percent below the national median, said Kent Oyler, president and CEO of Greater Louisville Inc., the city's chamber of commerce. Higher wages would help the city attract and retain skilled workers, and one way to raise them would be to bring in better-paying jobs.

It's not as chicken-or-the-egg as it sounds.

In recent years, only about 40 percent of the available jobs in the metro area paid above a living wage (about $36,700 for a family of four), according to a 2013 Greater Louisville Project report. And about 7,500 full-time workers in Louisville live in poverty, the report shows.

Oyler said increasing wages hinges on the city's ability to attract high-paying jobs. "We want quality jobs that pay more, not just more jobs that pay," he said.

The best way to bring these jobs into the city, he said, is to build a skilled workforce.

Higher wages appeal to smart, talented workers and help Louisville remain competitive for their talents with other burgeoning cities, such as Nashville or Madison, Wis.

City leaders need an integrated approach when it comes to crafting such a workforce, Oyler said. That means marketing the city as a destination for recent graduates, as well as getting local graduates to stay and fill current skilled-job openings, he said.

The median wage for Louisville adjusted for cost-of-living is about $36,600, according to a 2013 report from the Greater Louisville Project. That's near mid-pack in the group of 17 peer cities often used to gauge how Louisville stacks up regarding jobs, health, education and income.

Stephan Gohmann, an economics professor at the University of Louisville, said wages are based, in part, on the quality of the labor force. A better-educated stock of workers, as well as few barriers to do business — think: taxes — can entice companies that pay well to locate to a city, Gohmann said.

"I know one employer who moved his business from Louisville to New Albany and then increased his workers’ salaries by the 3 percent he was paying for the city’s occupational tax," he said.

But boosting wages and getting more residents into higher-paying jobs aren't solely reliant on a highly educated workforce.

Louisville has good-paying jobs that don't require a college education, said Janet Kelly, executive director of the University of Louisville Urban Studies Institute. "The key is to identify the industries that require those skills and provide training that meet them," she said.

Kelly said efforts to get more residents earning college degrees are good, but employers also demand workers who are capable of learning skills specific to individual jobs — an employer's own software programs, for instance.

Richard Shearer of the Brookings Institution echoed that idea. He said city leaders should aspire for more than just attracting high-paying jobs.

"Sometime what's important is not necessarily that you're attracting high-wage jobs, but you're attracting jobs that give people opportunities to learn the skills that they need to earn more in the future," he said.

That's something city leaders are working on.

The public-private 55,000 Degrees initiative has advocated for increasing the number of college degree-holders in the city. Code Louisville offers free training to residents in computer coding.

Boosting wages is also part of Mayor Greg Fischer's strategic plan. His administration aims to earn the city a median wage that falls in the top half of peer cities by 2020 and in the top third by 2030.

KentuckianaWorks, in concert with the mayor's office and Louisville Forward, the city's economic development agency, are focusing on "business sectors where we can have the greatest success in rapidly improving skills for the largest number of well-paying jobs," said a spokesman for the job training organization.

These sectors include advanced manufacturing, logistics, business services, food and beverage, and lifelong wellness and aging care.

On the low end of the wage spectrum, late last year, the Metro Council approved a plan to gradually increase the city's minimum wage to $9 per hour from $7.25 per hour. Efforts to increase the minimum wage to $10.10 per hour were opposed by some in the business community, including Greater Louisville Inc.

The idea of ensuring that residents — including those who aren't highly educated — have access to a quality career is something for which Jason Bailey advocates. The executive director of the Kentucky Center for Economic Policy said focusing only on bringing high-paying jobs to a city can widen already existing economic gaps among residents.

"You can have growth without equity," he said. "We don't just want growth, we want shared prosperity."

Jacob Ryan is a reporter for the Kentucky Center for Investigative Reporting.
Jacob Ryan joined LPM in 2014. Ryan is originally from Eddyville, Kentucky. Email Jacob at jryan@lpm.org.