Is Today’s Labor Force Drawn to Lifestyle Communities?August 10, 2016 Tourism is a critical part of Deschutes County's economy. It accounts for a large share of our employment base, total economic output, and wages paid. However, there are a variety of secondary benefits that are critically important, but much more difficult to quantify. Cities across the country are in direct competition with one another for top talent and it has long been assumed that lifestyle communities, such as Bend, are able to compete for that top talent based on access to recreational amenities and quality of life. Tourism introduces many prospective workers to a community, which can build a critical pipeline in the midst of a growing labor shortage. However, this assumption is not grounded in any known research. Are lifestyle communities outperforming standard metro areas when it comes to labor force growth?
There are 340 metropolitan statistical areas across the United States. I cross-referenced a variety of indexes and rankings that looked at the best communities for access to recreation, quality of life, and health. These lists came from publications, such as Outside, National Geographic, and Forbes. In total, 34 metro areas stood out as lifestyle communities. The list of lifestyle metros included places such as Virginia Beach, Asheville, Bend, Flagstaff, Missoula, Salt Lake City, Knoxville, Boulder, Miami, Minneapolis, and Santa Cruz. The western United States (including Anchorage and Honolulu) is disproportionately represented, accounting for nearly two-thirds of all the lifestyle community metro areas.
How does the industry make-up of these metro areas known for their access to the outdoors, recreation, and quality of life compare with more standard metro areas? Not surprisingly, the leisure and hospitality industry, which is made up of restaurants, hotels, recreation, and the arts, represented a larger share of the economy in these lifestyle communities as they attract a large number of tourists. Leisure and hospitality represented around 12 percent of the payroll jobs in lifestyle metro areas compared with 10.6 percent of standard metro areas.
A large employment base in tourism-related industries is often perceived as a negative quality as jobs in these businesses tend to be lower paying, seasonal, and part-time. There is something to this assertion as the labor productivity in the leisure sector tends to be much lower than for other industries. The gross economic output per employee in Deschutes County's leisure and hospitality industry was just over $33,000. To put that into perspective, labor productivity in the financial sector was 10 times higher per employee at over $330,000, while manufacturing accounted for around $112,000 of gross output per employee. The value of the goods and services in the tourism industry are relatively cheap, but very labor intensive. As a result labor productivity tends to be quite low, with the exception of high value tourism destinations, such as Kahului, Orlando, Miami, and Seattle.
Lifestyle communities tend to be tourism destinations and they have a larger share of their workforce concentrated in tourism-related industries. However, these lifestyle communities are also experiencing significantly faster job growth than the average metro area with total nonfarm employment expanding by 12.4 percent over the past five years compared with 9.2 percent for standard metro areas. Surprisingly, if you exclude the tourism industry, job growth in lifestyle communities outperformed the typical metro by an even larger margin than when tourism was included.
In addition to a faster growing employment base, these lifestyle metros are also experiencing rapid expansion of their labor force. The labor pool expanded by 4.5 percent in lifestyle communities over the past 5 years, nearly twice as fast as the growth in standard metro areas (+2.4%). This rapid growth in the labor force is particularly impressive considering the strong downward pressure retiring baby boomers are placing on the labor supply across the country.
This isn't sufficient evidence to conclude that tourism attracts labor to these lifestyle communities, however there is a very strong correlation between these lifestyle communities and a vibrant economy and growing labor force. Tourism seems to act as a bridge between workforce and economic development; introducing prospective workers to local amenities, which can provide a competitive advantage in the fight for smart and intelligent workers. Recent research on the millennial generation (those aged between ~22-34) by Deloitte shows that millennials rank a "good work/life balance" as the most important factor when evaluating a job opportunity. In fact, work/life balance was ranked as more important than opportunities for career advancement. These lifestyle communities have a significant advantage when it comes to attracting those workers seeking work/life balance with their easy access to recreational opportunities and outdoor amenities. A tourist may be introduced to the community as a visitor, but later seek permanent residency and employment if they are drawn to local community assets. Bend, and more broadly, Central Oregon, is uniquely positioned to capitalize on the growing work/life balance preference of America's workforce.