WS Chronicle

By Algenon Cash

The New York Times published a sobering analysis of Winston-Salem’s economy on July 16 – “Why Midsize Cities Struggle to Catch Up to Superstar Cities.”

Undoubtedly local officials drunk off a never-ending stream of their own self-promoted data were reeling. I personally felt a sense of vindication and largely agreed with Mr. Porter’s view of the city. As many readers know, I’ve also published a series of articles the past few months highlighting a variety of structural challenges in the local economy; similar obstacles Porter notated preventing us from achieving higher population growth, stronger wages, and sustainable economic expansion.

My thoughts can be viewed on The Chronicle’s website. No doubt those commentaries have attracted much attention from the same cohort of local officials crying foul about The New York Times recent piece.

Rightfully, The New York Times’ article discussed the progress made as we transition our local economy away from being centrally based on textiles, furniture and tobacco, into a technology and innovation hub focused on nurturing start-up companies. The article quoted many of the key players in the quarter, including Dr. Atala and Graydon Pleasants, but also accentuated the road to greener pastures is far more difficult than most citizens realize.

For the past 15 years, local officials have been working overtime to sell Winston-Salem as a place for companies to start, grow, and blossom – however those efforts have yielded minor wins at best. One glaring positive is the population in Winston-Salem continues to grow despite wages dropping; most would credit Innovation Quarter with being a magnet that attracts domestic migrants relocating here for high paying tech jobs.

However the migration is not outpacing the decline in middle-income jobs that provide a city with more diverse economic inclusion. Broader growth also pushes up median wages. Local officials tout a growing average wage in Winston-Salem, which can be skewed by outliers, but in reality the median wage helps us to better measure the labor market’s true health.

As properly noted in The New York Times article – private sector employment, median wage, and our poverty rate all significantly diverge when compared to larger cities such as Raleigh and Charlotte.

Winston-Salem has one of the highest poverty rates in the country and the article spotlighted income per person declined to 90.9% of the average for metropolitan areas in 2017, from 93.7% in 2009. Furthermore, the article states the median wage is $16.87 an hour, almost $2 below the national average. Not to mention private sector employment is barely higher than it was in 1999, which was 20 years ago.

The widening gap between Winston-Salem and larger neighbors such as Raleigh and Charlotte is further exacerbated by the economic shift from being a country where we solely focused on making stuff to one more focused on technology and developing innovation that grows productivity.  The latter requires highly skilled and educated workers to drive growth, whereas the former provided opportunities for many blue collar employees.

The New York Times’ article pointed out that we have five leading universities in our backyard – Wake Forest University, Winston-Salem State University, Salem College, North Carolina School of the Arts, and Forsyth Tech. 

Wake Forest enrolls four out of its five students from out of state. So we have no barriers preventing us from attracting young talent, but local economic conditions result in a low retention of rising leaders.

Likewise, most local officials would argue without Forsyth Tech, it would have been next to impossible to recruit Caterpillar. It is a primary tool when it comes to workforce development initiatives that can help low-skilled workers to acquire the knowledge required to improve their personal economic circumstances. We must leverage the community college more as we seek to level the playing field for low- to middle-income citizens.

The article triggered me to reach out to Mark Owens, the president of the Winston-Salem Chamber of Commerce; he responded quickly and we met to discuss his thoughts. 

“It’s great to be mentioned in The New York Times,” stated Owens. “The article placed us on the radar of many site selectors who may not have any knowledge about Winston-Salem.”

We both agree the city has a qualified opportunity to develop into a place where entrepreneurs seek to launch, build, and mature business ideas. But we lack a clear, united, and compelling vision to effectively motivate local officials and residents. 

Owens, a young talented professional himself, is working hard to alter the narrative being set forth by outlets such as The New York Times.

After our meeting, Owens provided me with a white paper that is being circulated by the Winston-Salem Chamber of Commerce; the piece addresses a variety of hard economic facts about our city.

In addition, the article outlined how well the local real estate market continues to perform. Zillow rates the housing market as pretty cheap, but “very hot.”

But Jake Cashion, a local real estate professional, recently shared, “It’s amazing. We’re selling a lot of real estate.  But if there was an economic development plan with a focused, disciplined, and aggressive approach, I can’t imagine how the local economy could grow.”

Owens and other local officials are seeking to develop a focused plan with the input of leaders from around the city.  I encourage him to include the many ordinary voices often left out these conversations. 

But no matter what plan is presented, it must include some of the key assets that I’ve long emphasized and are now spotlighted in The New York Times article – we must advance key infrastructural projects such as mass transit, an improved airport, access to rail, and more amenities that drive economic mobility.

We have a plethora of challenges and obstacles in our midsize city, some rooted in social and political history, but others wide open and ready for change. The article correctly punctuated – if any middling city can make a transition to a technology-centered future, however, Winston-Salem should.

Algenon Cash is a nationally recognized speaker and the managing director of Wharton Gladden & Company, an investment banking firm. Reach him at acash@algenoncash.com.