ECONOMY

How Wine Growing in Walla Walla Supports the Economy

In this photo taken Sunday, April 26, 2009, Grape vines line a hillside at the Pepper Bridge winery in Walla Walla, Wash. As the number of wineries near Walla Walla increased to more than 100 in the past decade, wine enthusiasts started calling it the Napa Valley of the Northwest. Now, leaders in this and other rising wine regions from New York to Central California that are far from urban centers wonder if the recession will leave a temporary blemish or start them on a permanent downslide.
National Journal
Catherine Hollander
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Catherine Hollander
May 31, 2012, 6:40 a.m.

Walla Walla boomed to life in the mid-1800s on the dry, fer­tile soil of south­east­ern Wash­ing­ton, sup­ply­ing gold pro­spect­ors on their way to Idaho and Montana with shovels, ba­con, and whis­key. Its first store­fronts were made of wood and hast­ily built, but they quickly gave way to brick and mor­tar, along with roads, schools, a pris­on, and the state’s first bank. The early set­tlers grew wheat in the re­gion’s rich soil, as well as pota­toes, corn, and bar­ley. A few new in­dus­tries sprang up along­side farm­ing over the next cen­tury, in­clud­ing food pro­cessing and in­dus­tri­al man­u­fac­tur­ing, but by the dawn of the 1990s, the eco­nomy had fallen in­to a doze.

While a tech wave pushed un­em­ploy­ment down to 4 per­cent in the na­tion at large, Walla Walla’s job­less rate stayed above 7 per­cent for the en­tire dec­ade. The city ap­peared to be fol­low­ing a path all too fa­mil­i­ar in rur­al Amer­ica, its pop­u­la­tion and eco­nomy stag­nat­ing as malls on the out­skirts sup­planted down­town busi­nesses and crowded out the loc­al char­ac­ter. If there was hope for re­new­al, it sprang from a vine: Walla Walla still had its soil, and the soil, a few en­ter­pris­ing loc­als had dis­covered in the late 1970s, could grow something a lot more luc­rat­ive than grain.

Wine made from grapes har­ves­ted from the corners of loc­al wheat fields was im­press­ing crit­ics and sig­nal­ing the po­ten­tial to power the town’s eco­nomy and cre­ate thou­sands of good-pay­ing jobs. But to grow from a boutique en­ter­prise to a full-scale in­dustry, the re­gion’s vintners needed work­ers — and those work­ers needed spe­cif­ic skills.

Walla Walla Com­munity Col­lege saw the op­por­tun­ity to train those work­ers in a pro­gram tailored to the loc­al wine in­dustry’s needs. The col­lege’s gradu­ates pop­u­lated the fields, wine labor­at­or­ies, cel­lars, and tast­ing rooms that un­furled like tendrils across the county. As the in­dustry grew, so did the city’s tour­ism busi­ness, its res­taur­ants, and its ho­tels. The num­ber of wine-re­lated jobs in the re­gion nearly doubled over the past four years.

Amer­ica’s eco­nomy today feels as sleepy as Walla Walla’s two dec­ades ago. Middle-class work­ers were slammed by the fin­an­cial crisis, their jobs dis­ap­pear­ing, wages stag­nat­ing, and fu­ture un­cer­tain. To put them back to work, the na­tion would do well to con­sider Walla Walla, which seems to have cracked the code on how to get mid-skill work­ers back in­to the labor force while re­vital­iz­ing an eco­nomy.

If the coun­try needs a mod­el, this could be it.

An Idea Takes Root

Early set­tlers planted the first wine grapes in Walla Walla in the mid-1800s, but the in­dustry nev­er took off. Then, in the 1970s, a loc­al ma­chin­ist and a wheat farm­er began mak­ing wine at home, star­ted their own la­bels, and earned na­tion­al ac­claim for the wines pro­duced by their now well-known Le­on­etti Cel­lar and Wood­ward Canyon. Oth­er winer­ies fol­lowed. In 1990, Los Angeles Times writer Dan Ber­ger called south­east­ern Wash­ing­ton “one of the most ex­cit­ing wine re­gions in the world.”

But the area had barely 20 winer­ies in the late 1990s. The lim­it­ing factor wasn’t the avail­ab­il­ity of land or the na­tion’s ap­pet­ite for the re­gion’s wine; it was that mak­ing wine is dif­fi­cult and re­quires work­ers with de­tailed train­ing.

Wine­mak­ing in­volves con­stant de­cision-mak­ing, start­ing with de­term­in­ing when to har­vest the grapes. The longer they ripen on the vine, the sweeter the grapes be­come. Once har­ves­ted, grapes are sor­ted to re­move the dam­aged, un­der­ripe, or rais­in-like fruit. Work­ers or ma­chines re­move the stems and press the juice from the grape. Yeast is ad­ded to fer­ment the juice, con­vert­ing the sug­ars to al­co­hol. Both the tem­per­at­ure and the ves­sel in which the wine is then aged — oak and stain­less steel are pop­u­lar choices — in­flu­ence the taste and style of the fi­nal product. Once the wine has ma­tured to the wine­makers’ spe­cific­a­tions, it is cla­ri­fied and bottled. The pro­cess is not in­tu­it­ive; work­ers need to be taught.

Steven VanAus­dle had a hunch that Walla Walla Com­munity Col­lege was the place to do the teach­ing.

In 1999, VanAus­dle, the col­lege’s pres­id­ent, ap­proached Myles An­der­son, a long­time in­struct­or at the col­lege and own­er of Walla Walla Vintners, with the idea for train­ing stu­dents to work in the loc­al vine­yards. An­der­son, who had co-foun­ded his boutique winery in 1995, sur­veyed the hand­ful of wine­makers in the re­gion. Only one of them had form­al train­ing in the craft, but all said that hav­ing trained work­ers would be im­mensely help­ful.

The en­o­logy and vit­i­cul­ture train­ing cen­ter the two men ori­gin­ally en­vi­sioned was mod­est: a small, met­al pole build­ing con­tain­ing two classrooms, a wine pro­duc­tion area with a press, crush­ing equip­ment, and a place to park a tract­or. This was the vis­ion they pitched to loc­al busi­ness lead­ers in a series of bi­weekly lunches that VanAus­dle hos­ted in the col­lege’s board­room, in hopes of so­li­cit­ing dona­tions. The pitch worked. As money rolled in, the plans grew, ex­pand­ing to a mul­ti­mil­lion-dol­lar cen­ter for wine train­ing.

An­der­son and VanAus­dle didn’t have any eco­nom­ic data to make the case to would-be donors — just An­der­son’s in­form­al sur­vey and a gut feel­ing that the gradu­ates would sup­port an ex­pand­ing in­dustry. “We had 19 winer­ies at that time,” An­der­son says. “We were talk­ing about maybe pre­par­ing to have 50 in our area over the next 10 years, and that was just a SWAG — a simple, wild-ass guess.”

It was good enough for donors such as Jock Ed­wards, pres­id­ent of a loc­al non­profit. “It was pretty clear that [the wine in­dustry] was on the rise, and the train­ing and the job skills were trans­fer­able to im­me­di­ate ca­reer op­por­tun­it­ies,” Ed­wards says. His or­gan­iz­a­tion, the Sher­wood Trust, gave the cen­ter two grants total­ing $842,000, the largest private dona­tion it re­ceived. The cen­ter also got fund­ing from the Port of Walla Walla and the Wash­ing­ton Le­gis­lature.

Walla Walla Com­munity Col­lege ded­ic­ated its $4.1 mil­lion Cen­ter for En­o­logy and Vit­i­cul­ture in Oc­to­ber of 2003. The school made a crit­ic­al choice when it opened the pro­gram: It in­volved loc­al in­dustry from Day One.

Con­nect­ing Col­leges With Loc­al In­dustry

Early stud­ies sug­gest that com­munity col­leges with close con­nec­tions to loc­al labor mar­kets are the most suc­cess­ful at get­ting stu­dents in­to the work­force, says Mi­chael Green­stone, dir­ect­or of the Hamilton Pro­ject, an eco­nom­ic-policy ini­ti­at­ive at the Wash­ing­ton, D.C.-based Brook­ings In­sti­tu­tion.

The data aren’t con­clus­ive yet, but sup­port for the idea is grow­ing. In May, the Or­gan­iz­a­tion for Eco­nom­ic Co­oper­a­tion and De­vel­op­ment re­leased a frame­work de­signed to help coun­tries en­hance their skills-train­ing pro­grams. The 109-page doc­u­ment de­scribes the im­port­ance of part­ner­ships with in­dustry in areas ran­ging from cur­riculum design to ap­pren­tice­ships.

“When em­ploy­ers are in­volved in design­ing cur­ricula and de­liv­er­ing edu­ca­tion pro­grams at the post-sec­ond­ary level, stu­dents seem to have a smooth­er trans­ition from edu­ca­tion in­to the labor mar­ket,” the OECD writes. “Work­place train­ing also fa­cil­it­ates re­cruit­ment by al­low­ing em­ploy­ers and po­ten­tial em­ploy­ees to get to know each oth­er, while train­ees con­trib­ute to the out­put of the train­ing firm. Work­place learn­ing op­por­tun­it­ies are also a dir­ect ex­pres­sion of em­ploy­ers’ needs, as em­ploy­ers will be ready to of­fer op­por­tun­it­ies in areas where there is a skills short­age.”

Today, there are many more em­ploy­ers in Walla Walla to of­fer those op­por­tun­it­ies than there were in 2000. The change is re­flec­ted in the very land­scape of the city, where green fields of spring wheat now share the land­scape with the brown soil of Walla Walla’s young vine­yards. Wash­ing­ton has be­come the third-largest wine pro­du­cer in the coun­try, and Walla Walla County has the highest num­ber of winer­ies in the state, with well over 100.

Walla Walla didn’t es­cape the re­ces­sion en­tirely. The county’s un­em­ploy­ment rate was 8.2 per­cent in March, in line with the na­tion­al rate. But it wasn’t rav­aged by the down­turn, either — cer­tainly not to the ex­tent the rest of the coun­try was. At its worst, un­em­ploy­ment in Walla Walla County, for which data are not sea­son­ally ad­jus­ted, reached 9.2 per­cent. The rate for the coun­try as a whole, on the oth­er hand, climbed to 10.6 per­cent without sea­son­al ad­just­ment. And today, neigh­bor­ing Frank­lin, Benton, and Columbia counties have un­em­ploy­ment rates that are 1, 2, or more than 3 per­cent­age points high­er than Walla Walla’s.

Eco­nom­ists say that the wine in­dustry de­serves cred­it for the re­l­at­ive em­ploy­ment suc­cess of Walla Walla through the down­turn. One eco­nom­ic-mod­el­ing firm re­cently es­tim­ated that the ab­sence of the wine in­dustry would have led to a peri­od of eco­nom­ic stag­na­tion that would have las­ted from 1997 to at least 2020. The num­bers tell the story: Wine-re­lated jobs in the Walla Walla Val­ley re­gion, which in­clude work at ho­tels, res­taur­ants, spe­cialty re­tail, and en­ter­tain­ment de­pend­ent on the in­dustry, grew from nearly 3,300 to 6,000 between the start of the re­ces­sion in 2007 and 2011. To put it in­to bet­ter per­spect­ive, the per­cent­age of the re­gion’s jobs that are wine-re­lated grew from 0.8 per­cent in 1997, be­fore the in­dustry took off and the col­lege began its skills-train­ing pro­gram, to 14.4 per­cent in 2011.

Gradu­ates of the col­lege’s skills-train­ing pro­gram are oc­cupy­ing many of the new loc­al wine-re­lated jobs. Since 2002, 124 have earned as­so­ci­ate in ap­plied arts and sci­ences or as­so­ci­ate in arts de­grees, and 174 have re­ceived one-year cer­ti­fic­ates in en­o­logy or vit­i­cul­ture.

Not all of the pro­gram’s gradu­ates re­spon­ded to a re­cent alumni sur­vey, but the 84 who did sug­gest that the pro­gram is very good at pla­cing stu­dents with­in the wine in­dustry.

Sixty-nine of the 84 are em­ployed in the wine in­dustry. The largest share — 40 gradu­ates — are wine­makers or as­sist­ant wine­makers. Oth­ers found work in cel­lars, wine sales and pro­mo­tion, vine­yard man­age­ment, and tast­ing rooms. More than 70 per­cent of those work­ing in the in­dustry are em­ployed full time; Ad­ecco, a job-place­ment firm, found that just 40 per­cent of U.S. col­lege stu­dents are able to find full-time work in their chosen field.

VanAus­dle says that those who aren’t work­ing in their de­gree field had elec­ted not to. “All of our stu­dents who de­sired em­ploy­ment in the wine in­dustry have been able to find jobs in the in­dustry,” he said in an e-mail. And more than half op­ted to reside in the val­ley after gradu­ation.

Their in­clin­a­tion to stay re­flects the close ties between the wine in­dustry and the col­lege. Nich­olas Vel­luzzi, then a doc­tor­al can­did­ate in geo­graphy at the Uni­versity of Wash­ing­ton and now dir­ect­or of in­sti­tu­tion­al plan­ning and as­sess­ment at Walla Walla Com­munity Col­lege, found that the suc­cess of the train­ing pro­gram re­lied on just those con­nec­tions. Through 60 in­ter­views with loc­al pro­du­cers and former and cur­rent stu­dents in 2007, Vel­luzzi con­cluded that the Cen­ter for En­o­logy and Vit­i­cul­ture was ef­fect­ive in func­tion­ing as a “labor mar­ket in­form­a­tion clear­ing­house”; in oth­er words, es­tab­lish­ing dir­ect con­nec­tions to jobs.

“An over­whelm­ing ma­jor­ity of stu­dents enter the in­dustry through their af­fil­i­ation with the cen­ter,” he writes. “Job open­ings are rarely pos­ted in loc­al clas­si­fieds or on In­ter­net job boards but are an­nounced in­form­ally by word-of-mouth, which sug­gests the im­port­ance of so­cial net­works and the highly loc­al­ized nature of the cir­cu­la­tion of labor mar­ket in­form­a­tion.”

The pro­gram at Walla Walla doesn’t just have those ties; it was built on them. Train­ing work­ers whom loc­al wine­makers would be likely to hire was at the heart of the col­lege’s plan from the be­gin­ning, and wine­makers were in­volved in everything from help­ing to design the build­ing that houses the pro­gram to writ­ing the cur­riculum. “They wanted to make sure that it was skill-based, that it was prac­tic­al and really con­crete,” An­der­son says. The col­lege of­fers classes on weath­er for vit­i­cul­tur­ists, pesti­cide li­cens­ing, and winery-op­er­a­tions man­age­ment, and has a sig­ni­fic­ant hands-on com­pon­ent. Stu­dents start the year dur­ing “crush,” or the grape har­vest peri­od, by work­ing in the fields. Not only do they get to know po­ten­tial em­ploy­ers from the start but they also come back in­to the classroom with a “pretty good sense if that’s what they want to do,” VanAus­dle says.

The way the Walla Walla wine in­dustry took off — and trans­formed the city in the pro­cess — wouldn’t have happened to the same ex­tent without the en­o­logy and vit­i­cul­ture pro­gram. “Winer­ies don’t just pop up without hav­ing people who can do the work,” says Ar­um Kone, a re­gion­al labor eco­nom­ist at the Wash­ing­ton State Em­ploy­ment Se­cur­ity De­part­ment. “I think [the pro­gram has] had a pretty amaz­ing im­pact in terms of look­ing at cap­it­al that’s be­ing in­ves­ted in the val­ley.”

Karl Storch­mann, an eco­nom­ics pro­fess­or at New York Uni­versity who has stud­ied the re­gion’s wine in­dustry, agrees. Even though many of the grapes used to pro­duce the wine come from the nearby Columbia and Yakima val­leys and much of the wine is shipped for con­sump­tion else­where, “The hu­man cap­it­al is loc­ated in Walla Walla, thanks to [the] en­o­logy cen­ter,” he said in an e-mail. “I am sure Walla Walla would look very dif­fer­ent from now [without] the cen­ter.”

More than half of U.S. em­ploy­ers re­por­ted hav­ing trouble filling crit­ic­al po­s­i­tions in 2010 be­cause of a lack of avail­able tal­ent, one of the highest pro­por­tions among the 34 mem­bers of the Or­gan­iz­a­tion for Eco­nom­ic Co­oper­a­tion and De­vel­op­ment. If the Walla Walla mod­el is scal­able, it could help close that gap.

A Vine Grows in Umpqua

The evid­ence that the mod­el can be ap­plied out­side of Wash­ing­ton state is nestled along the North Umpqua River in Douglas County, Ore.

Douglas, which had long re­lied on the tim­ber in­dustry, was hit harder by the re­ces­sion than most places in the United States. Non-sea­son­ally ad­jus­ted un­em­ploy­ment climbed to 17.7 per­cent in March of 2009, nearly double the na­tion­al rate at the time. The eco­nom­ic woes were enough that the area was con­sidered a “re­cov­ery zone”— a place with sig­ni­fic­ant poverty, un­em­ploy­ment, home fore­clos­ures, or gen­er­al dis­tress.

Just be­fore the re­ces­sion hit, Umpqua Com­munity Col­lege, loc­ated just north of Rose­burg, in Douglas, began study­ing how it could im­ple­ment a pro­gram closely modeled on Walla Walla’s. The wine in­dustry in south­ern Ore­gon was slowly grow­ing, much like south­east­ern Wash­ing­ton’s in the late 1990s. There were a few dozen winer­ies in the Umpqua area, and the col­lege wanted to be the one to train their work­ers. And un­like the Walla Walla pro­gram’s founders, Umpqua had a sol­id eco­nom­ic reas­on to be­lieve that the pro­gram would suc­ceed. An eco­nom­ic im­pact study from 2007 es­tim­ated that $115 mil­lion in ad­di­tion­al in­come and 5,000 new jobs would be ad­ded to the re­gion if the pro­gram could launch.

Umpqua Com­munity Col­lege es­tab­lished its wine pro­gram in the fall of 2008. But Umpqua also wanted a phys­ic­al cen­ter like the one on Walla Walla’s cam­pus and, some­what coun­ter­in­tu­it­ively, found an op­por­tun­ity in the re­ces­sion to get it.

After a loc­al law­yer con­trib­uted $800,000 to the wine in­sti­tute to get the pro­ject off the ground, cap­it­al began flow­ing. The wine cen­ter re­ceived more than 200 in­di­vidu­al gifts that gen­er­ated $2.5 mil­lion. The col­lege raised the rest of the money for the $7 mil­lion cen­ter through Re­cov­ery Zone Bonds, which were cre­ated by the Amer­ic­an Re­cov­ery and Re­in­vest­ment Act of 2009 to fin­ance pro­jects with eco­nom­ic de­vel­op­ment out­comes in dis­tressed areas. With the fund­ing in place, con­struc­tion on the fa­cil­ity was com­pleted in Decem­ber 2011.

Umpqua’s ver­sion of Walla Walla’s pro­gram also hints at how the mod­el may be ex­pan­ded. Un­like its Wash­ing­ton neigh­bor, the Ore­gon col­lege of­fers dis­tance learn­ing, which ex­tends the col­lege’s reach in­to nearby counties. Chris Lake, dir­ect­or of the col­lege’s South­ern Ore­gon Wine In­sti­tute, hosts week­end labs that give the dis­tance-learn­ing stu­dents the hands-on time they need to prac­tice the craft.

Like Walla Walla’s, Umpqua’s stu­dents have their own wine la­bel. But Umpqua also planned its wine cen­ter so that just one-third of its pro­duc­tion ca­pa­city is de­voted to stu­dent use. The re­main­ing two-thirds is leased to alumni to make what Lake calls a “busi­ness in­cub­at­or,” in which gradu­ates use the fa­cil­it­ies to bottle and sell their own wines.

“This will be the cata­lyst [that] south­ern Ore­gon’s bur­geon­ing wine in­dustry needs to spark the re­gion’s eco­nom­ic re­sur­gence,” the in­sti­tute’s web­site op­tim­ist­ic­ally pro­claims.

Rose­burg has yet to see the eco­nom­ic be­ne­fits that Walla Walla en­joys. Un­em­ploy­ment re­mains close to 12 per­cent in Douglas County. The re­gion’s wines have not re­ceived the na­tion­al ac­claim that those of their neigh­bors to the north did, which Lake says was a ma­jor driver of Walla Walla’s eco­nom­ic suc­cess. “We’re still 10 years be­hind where Walla Walla is,” he says. But he’s hope­ful.

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