The metro economy is growing a little more rapidly than the U.S. economy, but it’s unclear if that will last – and job creation remains a concern.
“My best guess is that we will continue to bump along, if you will, at sub-optimal growth,” Frank Lenk, an economist and senior director of research services at the Mid-America Regional Council, told the MARC board Tuesday.
He said it’s important to remember where the country was five years ago this fall, headed sharply into the worst economic downturn – the Great Recession – in the memory of most living Americans.
“And we’ve come back in a remarkable way. We continue to see a stable though unspectacular recovery,” Lenk said.
But this is also the third “jobless recovery” in a row. In other words, each recession of the last 20-plus years has been followed by less robust job growth than the historic norm. In the Great Recession, 8 million jobs were lost, and although 6 million of those have been replaced, when you factor in population growth, it’ll be 2020 before the country is back to where it was before the recession.
“ ... also there’s a lot of discouraged folks out there who can’t find jobs,” Lenk said.
Lenk and two other economists note in a 2014 economic forecast prepared for the Greater Kansas City Chamber of Commerce that “while the KC economy entered the recession later and its bottom wasn’t as deep, it has generally lagged the nation ... since the recession ended in mid-2009. For example, while total non-farm employment grew 4.2 percent between mid-2009 and mid-2013, KC employment grew only 2.9 percent over the same period.”
“We have a lot of ground to make up,” Lenk said Tuesday.
The metro area has about 1 million jobs, and in normal times – what does that mean any more anyway? – it would add about 15,000 a year. Lenk’s report says it looks as if the area will add 12,300 jobs in 2013, 14,300 in 2014 and 16,700 in 2015.
Lenk also pointed to something deeper in the regional job market. Consider the four fastest growing sectors of the local economy. Food and drink and administrative support are low-paying industries, and health care is what Lenk called bifurcated – a few good-paying jobs at the top but most jobs below the regional average pay. Only professional and technical services consistently create good-paying jobs. Contrast that with communications and manufacturing, which add more overall value to the regional economy but aren’t growing very quickly.
“ ... not all jobs are created equal. Some jobs add more value to the regional economy than others and, not surprisingly, jobs in these industries tend to pay better,” says the 2014 forecast. It adds that it would be wise to “consider how the regional economy can add more value to the goods and services it produces, and so gradually become a more important contributor to an increasingly global economy.”
Page 2 of 2 - The drama in Washington – the recent government shutdown, the prospect of another within a couple of months – is causing some businesses to be leery about investing, expanding and hiring, Lenk said. Overall, he said, the debate is actually something close to a reasonable discussion of how much government Americans want to have, although “we’re not having it in a very productive way, and that’s the heart of the issue.”
The Independence Chamber of Commerce building was pretty packed early Tuesday evening.
“Our target was 200, and we got 200,” said Jeff Benson, the chamber’s vice president of membership services. The event was a Real People Real Progess-ive party, put on by the chamber and the Independence Council for Economic Development. It was a first-time event, and, well, never underestimate the power of free food. People went room to room, sampling items from barbecue to beer while learning a little about local groups and events from the Ennovation Center to this Saturday’s Halloween parade. It was generally an elbow-to-elbow crowd.
The event’s name is a play on the “Real People Real Progress” slogan rolled out last summer and adopted by such organizations as the Independence Tourism Department. The party was a first-time event, and Benson said the chamber offices had never been used for anything like that before.
“It shows that more than one organization is pulling in the same direction,” he said, “and that’s critical to success.”
Quick follow-up on last week’s musings – OK, musings backed by some data – on the future of Amtrak service in Missouri. On Tuesday, the board of the Mid-America Regional Council looked over its proposed lists of legislative priorities in Missouri and Kansas in 2014. Many of them return year after year: Missouri needs a better seat belt law and a ban on texting while driving. Missouri needs to pay for 911 service with something other than taxes on landlines.
And transportation figures prominently in the equation, including what MARC sees as the need maintain and even expand Amtrak service in both states. More broadly, MARC wants Missouri legislators to find new funding for transportation overall, an issue legislative leaders have said needs attention in 2014.
Reach Jeff Fox at 816-350-6313 or email@example.com.