Next City: Memphis Looks to Medical Manufacturing to Cut Poverty
Poverty rates have dropped in Memphis, Tennessee, since the start of the decade, but it’s still one of the poorest large urban areas in the U.S. With 18.4 percent of its 1.3 million residents taking home annual incomes below the federal poverty threshold, it’s second only to Tucson, Arizona, when it comes to lacking opportunity for a living wage.
One local industry could help: medical device manufacturing. And the city was just awarded nearly $6 million from the U.S. Department of Labor to help fortify the system of community colleges, manufacturers and workforce organizations pulling talent from Memphis’ poorest communities to prep them for this booming sector.
Similar cash injections went to 22 similar efforts throughout the U.S. — 18 of which are urban areas with populations greater than 50,000 — as part of President Barack Obama’s community college reimbursement plan, called America’s Promise. The $111 million doled out during this round will help these cities build up the types of cross-sector workforce programs backed by federal law through the Workforce Innovation and Opportunity Act, enacted back in 2014. It’ll also help cover community college costs for disadvantaged workers looking for additional training.
Pauline Vernon, of the Greater Memphis Alliance for a Competitive Workforce (GMACWorkforce), says her region has been building a pipeline around medical device makers for the past few years. Shelby County hosts the second-largest cluster of these manufacturers in the U.S.
Part of the reason why the region is so attractive to this sector? Expediency. Memphis is home to FedEx’s World Hub, the company’s largest express shipping location.
She says this Department of Labor support was “a pretty easy award” to get. Seventeen of the region’s medical device manufacturers formed a nonprofit in March 2015 to tackle the same issues at the core of the America’s Promise program. That coalition, the Greater Memphis Medical Device Council (GMMDC), brought a laundry list of job demands to Vernon and her co-workers.
Prior to the council being formed, GMACWorkforce had helped put 421 workers into jobs ranging from transportation to manufacturing. Now, they’ll need to prepare 490 machinists, 120 logistics technicians, 82 metal finishers, 78 quality inspectors and 65 biomedical engineers. With the federal support, GMACWorkforce hopes to fill those demands in four years.
That’s all thanks to unprecedented levels of collaboration between GMACWorkforce and the private sector, according to Vernon. Just a few years ago GMACWorkforce and its partners struggled to fill 200 machinist positions in the county, despite working with four different local colleges to train workers for those spots.
Prior to WIOA regulations, she describes a back-and-forth familiar to workforce development staffs around the country. When there’s a worker deficit, the private sector often claims colleges and training programs aren’t getting workers to the standards they need, while colleges and training programs say the private sector needs to invest more cash into these programs to up their aptitude.
In Memphis, the medical device industry took charge. “When it came time for the grant opportunity, all of the pieces were pretty much there,” says Vernon, referring to her organization’s collaboration with the GMMDC.
One requirement of the federal grant is that local stakeholders had to commit an investment of 25 percent of the money they’re after. In this case, that meant GMACWorkforce had to pool $1.5 million in commitments from local groups before they could put their proposal to the Department of Labor.
By the time GMACWorkforce submitted its application, they’d collected $6.8 million from local chambers of commerce, medical device companies and training institutes along the job pipeline. “We blew that part out of the water,” says Vernon.
Her hope is that with the extra $6 million, they’ll draw even more faith from the private sector over the years. “Individuals do need that type of financial support while they’re learning and while they’re working,” she says. Part of the new programs they’ll back with the funds won’t only reimburse community college tuition and transportation costs for trainees — they’ll cover child care support, book costs and testing fees. That’s a potential lifeline for people struggling to make ends meet while also trying to find enough hours in a day to devote to getting the skills they need for these jobs.
Medical manufacturing jobs pay an average of $88,660 a year — or about 66 percent higher than the national average wage. The hope now is that a greater slice of the Memphis region’s unemployed or underemployed populations will benefit by the start of next decade.
And with the costs of community college covered by America’s Promise, one of the biggest barriers preventing poor people from accessing this extra education will be pushed aside.
“They’ll complete the training, and then be placed in these medical-based companies, and they’ll start earning a salary, but they’ll also continue learning on the job and continue learning at the colleges as well,” says Vernon. “It’s to help insure that the training leads straight into a job, and that we really just help pull these individuals all the way through.”