Episode 6: Lehigh Valley… The Hub of Economic Development with Don Cunningham

Transcript: Ray Lahoud/Don Cunningham

Welcome to Norris Speaks – Immigration Matters, a limited podcast series where we delve into the economic, employment, and cultural realities of immigration in the Lehigh Valley. I’m your host, Ray Lahoud, Member and Chair of the Immigration Law Group at Norris McLaughlin. On this episode, I’m joined by Don Cunningham, President and CEO of the Lehigh Valley Economic Development Corporation, an incredible economic development team that I would say has transformed the Lehigh Valley’s economy from the times of Bethlehem Steel to what has now become a global marketplace that is creating and retaining thousands and thousands of jobs each year. Don was twice elected mayor of Bethlehem, twice elected Lehigh County Executive, and the appointed Pennsylvania Secretary of the Department of General Services in former Gov. Ed Rendell’s administration. Don, I have known you for years, whether through the LVEDC, when you were mayor, county executive, through your band, as a friend, and you know, more importantly as a supporter of your one Lehigh Valley approach to economic development. And I’d like to welcome you to our show today.

It’s great to be with you, Ray. And I’m really happy to be on and be talking with you and thank you for all the work you’re doing at Norris on behalf of economic issues in the Lehigh Valley.

The Lehigh Valley is an incredible place to grow up in, to live in, to raise a family in, to work in. And you, Don, have been an integral part of the Lehigh Valley that we have today. In terms of background your family, from what I understand, has roots in the Bethlehem steel industry, correct?

Yeah. Yeah. Thank you for that. I think just like you, you know, I’ve been in the Lehigh Valley all my life. For me, it’s been in the Bethlehem area. My family came here as immigrants to work in the steel mills. And now with my kids we’re five generations of living in Bethlehem and being part of the Lehigh Valley life. I think you said it very well. I mean, it’s the unique quality of life that makes the place special.

It’s a place where we have many different cultures and many different people from all places, all areas, four corners of the globe, is what I say. And we are able to, you know, live for the most part in unity as one Lehigh Valley. Why is that different here, Don? I’ve always wondered that because every time I’ve gone away, I was a congressional page in Washington, D.C., came back here. I always thought that I would move to New York or the like, but what is it about the Lehigh Valley that brings people back and brings people here.

Yeah, you know, you’re touching upon most secret sauce. It’s kind of the magic, the pixie dust, if you will, of the Lehigh Valley that is hard to define. You know, there was a time when what we call Lehigh Valley, which, you know, by our definition is really the counties of Lehigh and Northampton. It was the true kind of core of the Lehigh Valley. You’ll hear other people refer to kind of broader definitions. I know you had Becky Bradley from the planning commission on, and from a government perspective, it includes Carbon County and Warren County, New Jersey, into the statistic zone of the Lehigh Valley. But what we call the core of the Lehigh Valley, which is Lehigh and Northampton, the cities of Allentown, Bethlehem, and Easton, you know, not that long ago, we really didn’t refer to it as a region. It was around the mid-nineties that the movement really started to approach Easton, Allentown, and Bethlehem as one metropolitan region, which really has played a huge role, I believe, in the economic renaissance and the success of the Lehigh Valley. You know, it’s been a challenge over the years, the decades, to kind of weave these communities of Easton, Bethlehem, Allentown, and then the outlying boroughs.

Suburbs, municipalities.

Suburbs, and up into the slate belt, into thinking of itself as one region. But you know, when you think about how difficult that is to do and how many other places across Pennsylvania and across the country have not been able to do that, we’ve really had a success. And I think if there’s one, it’s the sense of kind of authenticity, that the place is unique, that there’s a focus on family and community. That that matters.

It’s rare in so many parts of the country right now.

And a sense of belonging. You know, a sense of there’s something special about being here. That even if you come in new, you ultimately get welcomed in and find a place within the tapestry of the Valley.

But then we get hit with COVID-19. There’s all this remote work happening now. There are supply chain issues everywhere. As you can see, there are workforce problems. How is the Lehigh Valley economy weathering COVID-19?

 Yes, so the organization that, you know, I’m honored to be able to run now, the Lehigh Valley Economic Development Corporation, which is really just a coalition of private sector businesses, educational institutions.

Who I’ve been a long supporter of, the LVEDC investor.

Previous to being at Norris you were a supporter. Norris has been a great supporter.

Great organization.

And this coalition, is really all it is, to work on economic strategies for the market and to work on marketing and recruitment into the region, you know, and amazingly COVID period, really beginning in March of 2020, while it hit hard in the second quarter of 2020. And obviously having big impact in the short term, on our service sector, on our tourism and visitation and cultural arts as the businesses that were customer facing that has shut down because it was too dangerous during the pandemic, initially. Beyond that sector, the growth has not slowed. And in fact, it’s ramped up in a lot of the core parts of the economy of the Lehigh Valley, like the industrial sector, manufacturing production, distribution, e-commerce. Where the Lehigh Valley became a real linchpin in getting materials and products laid and supplied to the northeast.

Is that through our manufacturing, our warehousing, and our location in terms of, you know, New York, Philadelphia, or Pittsburgh?
 Exactly.

I mean, we’re right there in the center, which is where we should be.

Right, our location is, you know, I think every market’s location is such a cool factor in what its economic assets become. But Lehigh Valley, both by history and legacy. And currently today we are a producer and a supplier to about 40% of the United States population, which is within an hour and 20 minute drive

That’s incredible.

drive just because of where we’re located. Like you said, Ray,  being, you know, an hour and 20 minutes out of New York and an hour above Philadelphia and being able to serve this huge population base in the Northeast that traditionally we have been a manufacturing center and an industrial center, and we continue to be today. In fact, we’re at 49th largest manufacturing center in the United States.

That’s incredible. But a lot of that has been the work of the LVEDC in terms of bringing in new companies, seeking out new corporate investment, economic development, and the like, even foreign direct investment with companies from abroad coming into the United States, looking for a location to set up shop. And, you know, you have been proactive in pushing that along for the Lehigh Valley as one community. Where do you see that moving in the future in terms of supply chain and where the Lehigh Valley stands with respect to global manufacturing?

Well, I thank you for that. You know, what LVEDC really is, is just a coalition of interested entities and, you know, the fact that cross section of the community, whether they be private employers, professional service firms, governments, educational institutions, care about having a strategy, that’s what’s making the economic growth unique. And that’s the role that LVEDC plays is just bringing people together around the strategy in terms of the longer-term effects coming out of COVID and what role we’ll play going forward, quite frankly. the changes that are happening nationally and internationally because of COVID will benefit the Valley. And the first of which is, you know, I don’t think a lot of folks realized the fragility of having these long, multinational, multi-continent supply chains, where we’re producing goods in Asia and moving them across oceans.

And there are so many different ports and putting this together here and there, here, and that, yep.

All of the component parts of that, that need to work perfectly in order for your product to be on the shelf when you want it, or the goods to be delivered to your doorstep as you order it. We’ve seen the vulnerabilities of that. The marketplace is responding with shortening some of those supply lines to being more regional based, which translates to,

The Lehigh Valley.

Yeah, we’re seeing a surge in companies out of Europe and other markets wanting to have facilities closer to the customer base in the Northeastern United States, particularly in the life sciences, pharmaceuticals, where we’ve seen the vulnerability of having 85% of our active pharmaceutical ingredients produced in Asia, in the subcontinent. There’s a lot of movement right now to locate life sciences, medical diagnostics, and pharma in the U.S., so we’re real busy right now.

And you’ll bring the manufacturing from countries like China or abroad, which caused the problem that we’re in with respect to respirators, medications, and medicines, vaccines, and the like.

Yeah, exactly. I mean, the vulnerabilities of the long supply chains, when you have a global incident and people have seen that now that doesn’t mean that it’s going to stop being a global economy and all production of goods in Asia or in South America is going to become less, but there’s movement even at 5%, 10% movement, translates to

 It’s huge.

Yes, that’s huge.

And our marketplace. The second thing that you talked about is an interesting one, which is with office work, with the people who aren’t on the front lines of being essential in terms of,

We’re seeing that now where we have, you know, attorneys who would want to work at home and say they’re more efficient at home potentially then, even as a manager, how do you manage, how do you oversee, and even broader, how does the Valley deal with that, we have so much office space here.

 You know, right, and this is the other side. So, on the first side, on industrial manufacturing, I think translates to creating lots of new opportunities. I think all growing markets and metropolitan markets are trying to understand the impacts of remote work. Like, as you mentioned, Ray, less physical office space being occupied, potentially, as we don’t know what will happen when the pandemic really subsides, but the upside is that talented folks can live here and work for companies that are located elsewhere, so…

And they can live affordably here in the Lehigh Valley, which is the difference.

That’s the other side of the coin, that we’re not exactly certain how this is shaking out. We know there’s going to be opportunity to attract population that otherwise might not be here, but we certainly want to see our downtowns, like Allentown, Bethlehem, and Easton have office workers.

And, you know, in terms of attracting population, that takes us into your thoughts on the area of immigration law. We obviously have a global workforce is what I say, now, that’s available to employers because of the internet and the ability for people or companies to recruit individuals from all around the world. And we have an immigration system that’s a bit flawed in terms of employment-based work visas, as non-immigrant visas and the like. What are your thoughts in terms of immigration and how it could work towards, you know, filling the gap? Or do you feel it could have been an opposite effect on filling this employment gap that we have here?

Well, we’re proponents of a higher level of immigration into the U.S., I think. You know, the last five years of kind of policy gridlock around the Southern border and, you know, the Southern border and the illegal issue is completely separate. But I think that…

Completely separate, yeah.

But the ramifications have been, and you know this better than anybody, the number of immigrants coming into the U.S. has been less than it has in the past. And you know, as a student of history, every period of economic growth in the United States history has been fueled by immigration into the U.S. And when you look at the population demographics of the baby boom generation retiring, being a large portion of the U.S. population, and the millennials and gen Z is being a much smaller portion, the numbers just don’t work. You know, I mean for businesses right now, the number one issue is finding employees and finding employees with the right skills. So we …

We cannot find employees anywhere, and that’s a huge issue that we’re getting every day from clients and employers, in terms of like high-skilled work or even warehouse work.

Whether it’s straight up quantity issues around lower skilled employees, or whether it’s higher skilled around the qualitative issues, it’s the number one issue, both for employers in the market today and employers that we’re talking to about coming into the market. Quite frankly, I’m surprised there isn’t more business pressure nationally for immigration policy that opens up legal immigration.

Merit-based, I truly believe, and I’ve long been a supporter of comprehensive immigration reform that includes a robust employment-based immigration program,  for immigrants  and not only for people who are coming here temporarily to work and stay for a short period of time, pay taxes, and go back, to people who would be coming here as, you know, executives and multinational managers and the like from all types of industries, in all types of job skills, all types of positions. I think the first part comes with comprehensive immigration reform, which means we have to deal with the significant number of people that we have in the United States right now that are potentially undocumented. And we do have a lot in the Lehigh Valley that are not in lawful status and the like, and they contribute to the workforce in certain ways. So, when I look at, you know, comprehensive immigration reform, it’s really a multi-process here, is we have to deal with the individuals that are here without documentation. Either take them through a pathway to permanent residence or potentially citizenship or deport some people, because some people may not be able to stay in the country because of criminal convictions or the like. But then deal with the issue, as, say, Ronald Reagan had brought up in the 1980s when he did immigration reform in ‘86, you know, he granted amnesty to hundreds of thousands of people and in exchange, they were supposed to secure the border and make legalized, make the legal visa process work better and more efficiently, you know, go into employee verification, the I-9 verification and the like. But what happened was, they gave the amnesty, and you know, U.S. Congress or whomever it was, never fixed the issue that created that huge influx in the ‘80’s that led to amnesty. And then it’s the border. It’s just a mess right now.

So bottom line going forward, is it’s all about talent,

Yes.

Right, the regions, the marketplaces that are able to attract talent for all different levels of economic engagement and have the employees to meet the needs of employers will be the ones that succeed. The challenge right now across the whole country, and this is not just in the Lehigh Valley, it’s every growing metropolitan market, is there’s an imbalance. And some of this is short-term, you know. We hear about the great resignation and it’s COVID driven, but quite frankly, you know, we were seeing these numbers before COVID ever came in, and there’s just a, it’s a numbers game. It’s become simple math, and the demographics that businesses need larger talent pools, and they will find it one way or the other.

And that’s how it is. Now it’s truck drivers, like now everybody’s saying, oh, there’s a truck driver shortage. I mean that’s been long in coming. I’ve been dealing with employers who’ve been unable to hire truck drivers for years now. I mean, it’s brought the issue to the forefront now, which hopefully could bring some change or lead us to, to something. But going to your point there, you’re right. I mean, what we’re seeing now, you’ve been seeing for a long time.

Yeah. We were definitely seeing this before COVID. You know, at the end of the day, business is going to do one of two things. They’re going to go to where the talent is, If they can’t find it. And in the industrial sector in particular, they’re going to automate. And if they can’t find workers, American innovation and they need to keep driving operations will expedite mechanization and automation. And what’s now been a positive period for workers in terms of wages and benefits as they were on the right side of supply and demand will become less favorable with the advent of advanced automation.

 I was reading an article yesterday where hotels, they don’t have people to handle the room service. So, they have robots. Now, I think it was in the Morning Call, but they have robots that are actually doing part of the room service deliveries and the like, and so, I mean, the automation has even started in the hotel industry, which is pretty interesting to see.

Yeah. I mean, you see. You know in the Fast food restaurants where, you know, you order on a screen, and there’s fewer people working there because there’s just people in the back supplying food, and it’s screen ordered and so forth. So, you will see these things as a reaction to not being able to find employees. And I think this issue that you brought up about comprehensive immigration reform was never more needed in the country, can be a smart, logical, balanced approach towards this, recognizing that again, every economic expansion period in the United States history has been fueled by people coming here from other countries to supplement what the domestic Americans are doing.

 Hopefully legally. We’ve got to create that pathway.

Hopefully we see that. I, you know, I mean, I know we don’t want to go down the road of how broken the national political problem-solving …

… system is right now, you know.

I’m not overly optimistic.

Neither am I.

We just keep doing like you do. We just keep doing what you do in our little corner of the United States.

And we rock ahead.

And go forward.

And we keep bringing in employers, creating jobs, retaining jobs, and creating economic development in the Lehigh Valley.

 Just want to say that we are seeing continued population growth in the Lehigh Valley counties, you know, most of that coming from domestic migration and a lot of it in young people under 40 that are moving and finding their way to Lehigh and Northampton counties.

From other parts of Pennsylvania or from other states?

Both.

Really?

Lehigh Valley counties of Lehigh and Northampton over the last decade have been two of the fastest-growing in the top 10 counties in Pennsylvania for growth, and in fact, in the top 5 the last couple of years. So people are finding their way to Lehigh Valley, which is good news for our employers. Some of it has come from Puerto Rico, which has a different pathway towards immigration, obviously, being a United States territory.

They’re U.S. citizens, you know, at birth. So yeah,  there’s no issue with people coming from PR up to here. I think it’s funny. You know, I did get a call one time from somebody who thought they were going to get deported, and they were born in Puerto Rico. And after about 20 minutes into the call, I said “Sir, you’re a U.S. citizen in any event,” but …

Hopefully you billed them for the 20 minutes.

I did. If, come on, I agree. We must it’s by that point tenths. Don, you’re a really good man and I really want to thank you for all that you’ve have done for the valley. You’re an incredible person. Your band is awesome. I mean, when I compare it to Judge Giordano’s band, we have discussions and debates. So, I’m, I’m a huge fan of both and,

I don’t want to promote, but it’s like the Beatles and the Stones. Right?

 He did, he’s on one of the podcasts and he did promote his band there. So, I’m going to give you the chance right now for your next event coming up.  

Thank you. Well, the band will start playing again, you know, and we’re booked going into February. We’re off in December and January, which has turned out to be a kind of fortuitous. And there’s not a lot of gatherings right now.

It’ll get back. America’s coming back from this COVID virus and hopefully we’re at the end of it. And people like you make it happen. So, this has been Norris Speaks – Immigration Matters, a limited podcast series where we delve into the economic, employment, and cultural realities of immigration in the Lehigh Valley. I want to thank my guest, Don Cunningham, and you the listener for being a part of this conversation. As we wrap up season one, I want to thank all my amazing guests for joining me this season. Be sure to stay on the lookout for season two of immigration matters. If you would like to learn more about immigration law, visit our website @ www.nationalimmigrationlawyers.com.