State promotes ‘low-cost labor’
It’s part of an attempt to lure foreign industries to Tennessee
NASHVILLE — During the Great Depression and after World War II, Tennessee and other Southern states lured Northern industries with promises of cheap, non-union labor. Decades later, Gov. Bill Haslam’s administration is looking to market Tennessee internationally as a place “with a low-cost labor force” and “very low unionization rates.”
The state Department of Economic and Community Development (ECD) posted on the state’s website Monday a “request for information” from individuals and firms in Europe, Asia and South America interested in representing Tennessee’s efforts in their regions, to increase foreign investments and jobs in the state.
“Tennessee is proud to be a right-to-work state with a low-cost labor force and no personal income tax on wages,” the posting says. “Our state and local tax burdens are some of the lowest in the region. We have the lowest debt per capita in the region and very low unionization rates — factors which continue to make our state attractive for foreign direct investment.”
A request for information is the first step for a state agency deciding whether it wants to pursue an outsourcing initiative. An RFI invites firms potentially interested in contracting with the state to submit responses on how they would provide the service. If state officials like the ideas and strategies in the responses, they issue a more formal request for proposals or bids for contracts.
ECD Assistant Commissioner Clint Brewer said the RFIs are only requests and don’t bind the state to any future action. Asked whether the agency is marketing the state as a low-wage place, Brewer said, “Tennessee is a low tax, low debt state and its labor cost is low, in part, because our state’s cost of living is one of the lowest in the country, ranking 8th lowest among all 50 states.” He said the overall cost of living in Tennessee is 9.5 percentage points below the national average. “That’s a selling point for companies selecting Tennessee versus other states.”
Brewer also said low unionization rates “are also attractive to companies even if they come from a heavily unionized country. Our recruitment and that of other right-towork states shows that to be true.”
With its new RFI, the Department of Economic and Community Development says it intends to “ascertain the viability of engaging a foreign representative to increase investment and job commitments to the State of Tennessee and the types of services such a representative could provide.”
The RFI seeks responses for representatives in seven regions: the United Kingdom and Western Europe, Korea, Italy, Germany, Eastern Europe, China and Brazil. It asks responders for details on the services they would provide, including how they would identify companies that might be recruited to Tennessee; how they would call on companies and sell the benefits of locating or expanding in Tennessee; how many leads they would approach in a month, a quarter and a year; how they would develop a priority customer or lead list, and how often they would expect ECD staffers to visit companies, trade shows and conferences in their regions.
After the Sept. 21 deadline for responding, ECD’s administrators would decide whether to proceed with the initiative. The state budget for the current fiscal year says ECD already has representatives in China, Canada, Japan, Mexico and the UK.