Gene Barr

Gene Barr

Amazon’s decision to pass over Pennsylvania as the site for its HQ2 headquarters is certainly disappointing and necessitates a strong examination of why the commonwealth wasn’t chosen. 

Despite two Pennsylvania cities making the list of top 20 potential locations and offering higher incentive packages, the online retail giant ultimately chose to split its second headquarters between locations in New York and Northern Virginia — in addition to selecting Nashville for a new operations center. Our prime location, ample natural resources, world-class educational institutions, diverse industry base and strong work ethic should make the commonwealth an ideal location for investment.

The Amazon announcement is the latest in a series of missed economic opportunities and begs the question: Why — with all of the advantages Pennsylvania has to offer — aren’t we viewed in the global marketplace as a prime investment location? And, more importantly, how do we change that perception?

One factor that Amazon said played a key role in its decision is the state of Pennsylvania’s skilled workforce. With an aging population and a large percentage of residents getting closer to retirement, our state, it’s widely accepted, has a workforce problem. This is a growing concern among employers, as evidenced in the PA Chamber of Business and Industry’s 28th Economic Survey, which was conducted in August.

For the first time, job creators listed difficulties finding skilled and qualified employees to fill open positions as the biggest problem facing their companies. The PA Chamber is working to reverse that trend through our “Start the Conversation HERE” workforce initiative, a grassroots campaign aimed at creating a meaningful dialogue among employers, educators and students about the opportunities that exist in the skilled trades and other growing career fields in the state. We’ve also recently distributed a second round of scholarship dollars to help some of these students achieve their goal of obtaining a skilled trade career.

Our tax climate also leaves a lot to be desired, especially when compared to other states. Our corporate tax structure, including the corporate net income tax — which has one of the highest effective rates in the country — is a major red flag for potential investors. Combined with that is a trend among certain elected state officials to want to go after specific industries with increased tax burdens. A perennial example in recent years is our energy sector, which provides Pennsylvania with one of our strongest competitive advantages — access to affordable energy. And yet, this industry (in particular, the natural gas industry) is consistently targeted by some elected officials to pay additional taxes. This mentality of taxing any industry that shows growth potential must stop if we hope to economically prosper.

Other hurdles to job creation in the commonwealth include our legal climate — which consistently ranks as one of the worst in the nation — and our regulatory and permitting environment, which makes it increasingly difficult for employers to do business.

In order to compete in the global marketplace, we need to institute significant changes. We need to embrace tax policies that focus on our long-term economic future and entice new investment; work together toward closing the jobs skills gap; and adopt regulatory policies that allow for environmental protection while also growing the economy. Elected officials must focus on promoting our strengths and competitive advantages while enacting policies that foster growth in these areas. Only then will the world see Pennsylvania as “open for business.”

Gene Barr is president and CEO of the PA Chamber of Business and Industry.