The Impacts of Alternative Uses of the Volunteer Army Ammunitions Plant Site on
the Urban Poor
by Brian Fikkert and David Shideler

Abstract:
Hamilton County and the City of Chattanooga have purchased a parcel of the Volunteer Army Ammunitions Plant (VAAP) in hopes of attracting a major manufacturing firm to the region. Several alternative types of firms have been discussed, including automobile or computer plants.

The following paper examines the impact that either of these choices would have on job opportunities for the poor. Using a state-of-the-art, computerized economic model, we measure the impacts of the automobile and computer plants on 819 occupations distributed across 528 economic sectors. We find that both choices would create a large number of jobs for unskilled and low-skilled workers at wages that are above the poverty level. However, the automobile plant creates over 700 more jobs than the computer firm. Furthermore, the auto plant creates jobs that are more accessible to the poor and pay higher wages. If government officials want to help the poor, the choice is clear. Similar analyses could be performed for other potential firms. We also find that efforts to prepare the poor for work should focus on "soft skills" training. Such training may best be provided by grassroots, community organizations that can provide low-income persons with supportive relationships to address the behavioral, emotional, and social dimensions of work readiness.