THERE’S AN old saying that Georgia is just Alabama with Atlanta added on.
Indeed, demographically, economically, and culturally the two states would be nearly identical – assuming you were able to lift the Atlanta area up and out of Georgia like a slice of cake.
That’s not really news. But current data shows that Atlanta is even more important to Georgia’s economic and cultural health than was previously thought.
Recently, Savannah City Council heard an eye-opening presentation from McKinsey & Company, entitled “Expanding the economic pie in the Peach State.”
Some of the findings are a mixed bag of fruit, at best, for Savannah.
For example, while Georgia went from 17th largest U.S. state economy to 9th largest from 1977-2017, fully 65 percent of that growth in GDP came just from metro Atlanta, which had over twice the growth rate of the rest of Georgia.
Atlanta, as the country’s 9th-largest metro area, is also considered one of the so-called “Superstar Cities” of the 21st Century — a magnet for millennials, for creative/STEM/high-tech jobs, and for the lifestyles desired by the people in those jobs.
It’s a self-feeding success story, as the more jobs are created, the more amenities are desired by the people filling those jobs — thus creating even more jobs.
But, as the report says, “the majority of ex-Atlanta metropolitan areas has not kept up with peer metros outside Georgia.”
There is also the insidious effect of the red-hot metro Atlanta economy contributing to inflation within Georgia, to an extent that cities like Savannah and Macon and Columbus, et al, can’t easily absorb it given our depressed wages and slower job growth picture.
What does this mean to these lower-tier cities? We must still provide for our citizens in terms of infrastructure and public safety — things which are generally closer to fixed-cost items — but with a stagnant or even decreasing tax base.
That can trigger a self-feeding cycle of its own, but in the wrong direction.
An observer might say that Savannah is in the eye of that storm as we speak. We’re a city with arguably greater PR value than actual business portfolio, with an ever-expanding slate of taxpayer obligations, but not really the job or wage growth to back it all up.
It will come as no surprise to longstanding local observers that workforce issues are at the core of Savannah’s problems.
This is not only a perennial problem locally, but a very stubborn problem for almost all cities and towns in Georgia outside the metro ATL orbit.
The report says, “Georgia’s economy has a significant mismatch between workforce skills and labor market needs; a large number of potential workers lack the skills to fill open roles.”
This forms the basis of a cruel reality: There are actually plenty of lucrative job openings, but many go begging because the pool of qualified applicants here is so low.
“High-skill sectors – such as healthcare, computation, and mathematics, which are growing 15 percent or more a year – currently have ten openings for every qualified candidate in Georgia who is looking for work,” the report says.
Meanwhile, “nearly five times the number of low- to midskilled workers are seeking employment compared with high-skilled workers,” it says — which I find to be a most remarkable figure.
“This imbalance highlights the importance of the state’s focus on education and targeted vocational and workforce-training programs to address workforce skills gaps and create the right conditions for the economy to grow,” says the McKinsey data.
How many times have you heard local leaders espouse the value of higher education to the Savannah economy?
But the reality is that right when we need their jump-start the most, both Georgia Southern and Savannah State are experiencing serious, and largely unexpected, enrollment declines.
Ironically, a major higher education success story here that we all should have been focusing more on — if you believe the McKinsey report — is that of Savannah Technical College, which hits the sweet spot of workforce development that is arguably most needed here.
As for start-ups, the news is also mixed. While Savannah does reasonably well in terms of launching brand-new startups, the so-called “growth-stage” firms — those companies begun between one and nine years ago — are experiencing growth that is tepid at best and less than zero at worst.
Not all the news is bad for Savannah, of course.
While disparity in health outcomes and healthcare availability outside metro Atlanta has been a brutal drag on smaller Georgia cities, Savannah is blessed with a vibrant healthcare sector.
The McKinsey Report also positively notes the “symbiotic” relationship between Savannah’s port activity and the crucial metro Atlanta economy.
Someone who may be sitting on City Council soon, Nick Palumbo, is deeply interested in these kinds of macroeconomic snapshots, and how they can be scaled down to good effect in Savannah.
He is running — so far, unopposed — for the 4th District Alderman seat.
“For us to compete in this new era of ‘Superstar Cities,’ Savannah must not only think about the next 300 years, but put enough effort in to make up for lost time. What the McKinsey report says to me is that if Savannah stands still, we will lose ground,” Palumbo says.
“For decades, we’ve treated economic development like we were hunters trying to bag the next big game. To join the ranks of other Superstar Cities that possess the amenities and features residents demand, we must become economic farmers — planting the seeds that will blossom into Savannah’s great future. That means more dedicated space for startups and entrepreneurs, and generating a civic culture dedicated to supporting an innovative home-grown economy,” he says.
Palumbo concludes, “We have to account for our distinctive natural and built environment as the ultimate advantage — something no other city can possess — as the keystone to our future.”