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Workforce Development, the Opioid Epidemic in Arkansas and a Potential CRA Opportunity for Banks

By

Caleb Bobo , Sam Evans
Wednesday, December 19, 2018

Workforce development efforts often draw bipartisan and cross-sector support. Policymakers and business leaders recognize there are real economic and social benefits to having a workforce prepared for the jobs of today and tomorrow. In the South, attention is particularly focused on this issue as communities compete with population centers on the coasts for both talent and employers.

Major corporations, local governments, educational institutions and others throughout Arkansas have worked diligently to build academic programs that fit area and industry needs. They have also worked with local nonprofits to ease transportation, child care and income barriers that often prevent men and women from engaging in workforce development opportunities. However, stakeholders seeking to prepare the next generation of Arkansas workers may be missing one critical component.

A recent study1 from a nonpartisan think tank finds the volume of harmful, addictive prescription drugs per capita increased in Arkansas by 21 percent annually between 1999 and 2015. Further, the rise of opioids is associated with a 3.8 percentage point decline in labor force participation (equaling about 43,400 workers) and a loss of 574 million work hours, costing the state $33.5 billion in gross domestic product. Together, that makes Arkansas and its economy one of the “most damaged by the opioid crisis” in the U.S.

Simply put, any strategy to strengthen Arkansas’ workforce, and more generally the state’s economy, may find benefit by including drug treatment within the programs. Some organizations in the state are doing just that.

Renewal Ranch is a faith-based recovery center for men in Central Arkansas. Formed in 2009, its program offers 12 months of drug and alcohol addiction support, housing, social services and employment assistance at no cost to its residents. When the organization first started, the majority of the men reaching out were seeking help with treating alcohol and methamphetamine addiction. Now, 60 percent of applicants want help with opioids.

Today, Renewal Ranch’s work occurs in two phases. For the first six months, participants stay on Renewal’s campus and attend classroom sessions that include basic job training and life-skill courses from local businesses and volunteers. In addition to classroom time, residents complete a number of service hours aimed at connecting participants to their community and to potential employers in the area.

The second six months includes intensive leadership and mentorship opportunities to further help the men develop personally, professionally, socially and spiritually. Since its inception, over 250 men have graduated from the program, with a supermajority either having received gainful employment or having sought to further their education.

Similarly, the Northeast Arkansas Regional Recovery Center (NEARRC) was launched in 1999 in response to the area’s shortage of drug rehabilitation and recovery centers as highlighted through the Crowley’s Ridge Development Council’s (CDRC) needs assessment. Through a generous land donation by City Water and Light Jonesboro, CDRC was able to establish NEARRC, a 26-bed facility that serves both men and women battling drug use and abuse. It serves an eight-county area. Following the completion of a robust set of sobriety services, participants are advanced into CDRC’s Connect Program, which provides assistance to those transitioning into a sober lifestyle.

One of the most important parts of Connect is that participants are assigned case managers, who provide assistance with finding educational opportunities or securing employment, among many other things. To ensure the success of CDRC’s skill development and job readiness initiatives, case managers work closely with Goodwill Industries of Arkansas, Arkansas State University-Newport and the Northeast Arkansas Workforce Development Area.

Both Renewal Ranch and NEARRC utilize strategic partnerships to advance their respective programmatic and organizational goals. While banks may not seem like a natural partner in the workforce and drug addiction conversation, those financial institutions subject to Community Reinvestment Act (CRA) examinations may find engaging on this issue beneficial on multiple fronts.

A better trained workforce means more men and women finding stable employment, making them better candidates for personal banking and loan products. Moreover, a dynamic labor force is more likely to attract new employers, which could lead to new infrastructure- and construction-based investment opportunities in banks’ assessment areas. Finally, efforts in initiatives that address both workforce development and the opioid crisis may be CRA eligible and be viewed by regulators as innovative, flexible, and/or responsive.

Over the next several years, few issues will likely be more important to the future of communities in Arkansas than handling the opioid epidemic. Organizations like Renewal Ranch and the NEARRC are confronting the problem head-on, working to ensure men and women are treated and ready to actively participate in the workforce both now and for years to come. As more endeavors like this come to fruition, banks have a unique opportunity to contribute to their communities, and their bottom line and their CRA rating all stand to benefit because of it.

Caleb Bobo is an assistant consumer affairs examiner, and Sam Evans is a community development advisor focusing on workforce development at the Federal Reserve Bank of St. Louis.