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UK Business Professor: Kentucky’s Inadequate Workforce Plays a Role in Toyota’s Move to Texas

A University of Kentucky business professor says Toyota's decision to move more than a thousand jobs from Northern Kentucky to Texas could be a result of the commonwealth's inadequate workforce.

Chris Bollinger is the director of UK’s Gatton College of Business and Economics. He said Texas doesn’t have a state income tax, which could make it lucrative for the kind of high-wage engineering jobs that will be moved from Erlanger, Kentucky, to Plano, Texas.

Bollinger also said the state’s lack of science, math and technology graduates might make Kentucky less attractive for such jobs.

“One of the things we know that again and again and again comes up in Kentucky is that our labor force is not at well-educated as other labor forces, other states,” Bollinger said. “We lag behind in college completion rates.”

While the move is bittersweet for Republican State Sen. Damon Thayer since the Toyota plant in his district will gain 300 jobs from the move, he said Kentucky does have some disadvantages. Thayer thinks Kentucky needs to look more like Texas.

“They don’t have Obamacare. They don’t have a health care exchange,” he said. “They didn’t expand Medicaid. They’re a right-to-work state. They have no state income tax.”

But Gov. Steve Beshear said Toyota told him Kentucky's business and economic climate did not influence their decision.

“It had everything to do with wanting to be in a new place kind of divorced from the three different places—California, New York and Kentucky—where the offices were right now,” Beshear said. “They felt like they needed if they were going to pull all these people together and mold them into one unit they needed what they called a neutral site in order to do that.”

About 1,600 jobs will leave northern Kentucky, leaving behind about 8,200 total Toyota employees in the state. Toyota has a manufacturing plant in Kentucky that won't be cut by the headquarters relocation.

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