September 15, 2026
In Chattanooga, pairing business incentives with targeted workforce training could produce more benefits for every dollar invested than business incentives alone.
For cities competing for business investment, attracting jobs is only part of the challenge. The other is making sure the people who already live in the community are prepared to fill them. Without a strong local workforce pipeline, new jobs may go largely to workers moving into the area, limiting how much existing residents benefit from economic growth.
Chattanooga, Tennessee, is pursuing a different approach. A new report from the W.E. Upjohn Institute for Employment Research finds that every dollar the city spends on targeted high-quality workforce training tied to economic development projects could generate more than $25 in benefits for residents through higher employment and earnings.
These research findings are relevant to One Chattanooga Works, a new city initiative focused on helping adults ages 25–54 move into local, in-demand jobs. The effort is designed to bring employers, training providers, and community organizations together around the shared goal of ensuring that jobs supported by public incentives are accessible to Chattanooga residents.
The Upjohn report, written by Tim Bartik, Iryna Lendel, and Sevrin Williams, uses the Bartik Benefit-Cost Model to examine what would happen if Chattanooga paired workforce training with its Payment in Lieu of Taxes agreements, or PILOTs. These agreements reduce a company’s property tax obligations in exchange for investment and job creation. The proposed training package includes a combination of customized skills instruction, apprenticeships, and job-related community college certificate or associate degree programs.
Across the seven industries examined, the average city PILOT costs about $10,140 per job and is estimated to produce $0.88 in Chattanooga benefits for every dollar spent. However, when PILOTs are combined with training, the package produces $5.24 in benefits for every dollar spent, with net benefits of roughly $51,500 per job over a 20-year period. In effect, training turns an incentive that falls slightly short of breaking even from a city resident perspective into one that generates substantial returns for residents. The incremental benefits from adding training to a PILOT-only package is a benefit-cost ratio of over 25 to 1; that is, benefits go up by over 25 times more than the costs of the training.
The large payoff comes partly from changing who benefits from job creation. By preparing unemployed and underemployed residents for specific openings, targeted training makes it more likely that those jobs will go to local workers, raising their employment levels and earnings.
Training may also strengthen the incentive offered to employers. The report finds that helping businesses secure workers with the right skills can influence location and expansion decisions more effectively than providing the same amount of cash assistance.
The benefits are expected to reach all income groups, with low- and middle-income residents gaining proportionally more. But the projected returns depend on program quality. Training must be closely aligned with employers’ hiring needs, and the city will need to track whether participants find work, remain employed, and earn more over time.
For Chattanooga, attracting jobs is only the beginning. The real payoff comes when residents can secure and keep them.
Experts
