The true economic picture in LEX

Following up on the post below –

We like to think that this region is weathering the economic storm, but the real numbers don’t back that up.  Our February 2011 regional unemployment was 9.4%. We rank 193th in employment out of 322 metros in the USA, behind places such as Cleveland, Ohio, and Buffalo, New York for example.  Perhaps we really aren’t doing as well as we think we are.   In fact, the Lex Metro ranks 5th highest in unemployment among the 23 regions I comped for this Bluegrass Tomorrow study in 2008.  (See chart at bottom.)

Now, we have this new economic strategy report that is going to get us back on track.  But I have not heard one person say what it is exactly we aspire to.  How many jobs will it take to get us back on track?  The call center at Coldstream is projected to add 200 jobs – at $12 an hour including benefits.  Is that what we are talking about?

Since we’re not really talking about it, I can only conclude it’s either out of fear of reality or ignorance of what it would really take to get back to “normal.”

Either way, I have some figures to begin the discussion.

We have basically the same number of jobs in our region today that we had 10 years ago.  In the last 10 years, we added 16,624 people to the regional labor force and created a net grand total of 2,905 jobs.  That means that for every five new people entering the labor force, only one job was created.  And most of the last 10 years were the supposed “good times!”

So just to get back to 5% unemployment right now, we’d have to create 10,682 new jobs in the region.

Remember in 10 years we only created 2,905 new jobs.  Doing the math one way, we’d have to wait nearly 37 years to create enough jobs.  Now obviously, that won’t work, because of both the time factor and the fact that new people are always entering the work force here.

So we need to add 10,000 + jobs quickly.  Yet between technological advances that increase efficiency and thus reduce demand for people and the fact that China and India and other places can do the same jobs we can for far less money, adding jobs in that kind of bulk seems very unlikely.  Yes, we could always get a hit with a big new factory or someother, but it’s more likely that we wouldn’t.  There’s just too much competition and I don’t think even we are prepared to race 15,000 other American cities to the bottom that fast.

High tech industries won’t save us because they don’t employ mass numbers of people and anyway, although we are a fairly well educated region, what will happen to the 70% or so of the population not suited to high tech?

Innovation?  A bullshit word hiding an empty concept.

This is my point:  we’ve reached the end of mass employment. We can see it in numbers – we will never employ industrialized numbers of people again, even though we have an industrialized population size.  When you hear an elected official or a chamber booster talk about jobs, ask them:  where are the jobs going to come from?

I predict that at least for the next two years that we will continue to chant plaintively the mantra of jobs and economic development.  And I do hope that we can add some.  I do not think however that we will add anything like the number needed to get employment down to 5%.  This means wages will remain stuck at best, all the while inflation in food and energy, and now even things like clothing, will continue to increase. The peak oil time has got us in its grip, and it is very likely to send our entire global economy back into recession.  A very scary thought considering that the last recession finally bankrupted us.

The best economic adaptation to this reality is small numbers of employees working for large numbers of businesses that supply our local and regional needs utilizing local and regional resources.  We could get every person who wants to work into this localization strategy.  That or accept ever higher unemployment.

(The figures below represent the unemployment rate in Feb 2011.)

Ann Arbor   6.5%
Athens GA  7.7%
Austin  6.9%
Baton Rouge  8.1%
Boulder  7.5%
Bowling Green  10%
Charlottesville  5.3%
Chattanooga  8.8%
Cincinnati  9.7%
Columbia MO  6.6%
Columbia SC  8.5%
Eugene  10.6%
Fayetteville AR  6.7%
Fort Collins  8.3%
Gainesville  7.8%
Greenville SC  8.5%
Knoxville  8.2%
Lexington  9.2%
Louisville   11%
Madison  6.0%
Nashville  8.8%
Raleigh  8%
Tuscaloosa  8.7%

1 Comment

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One response to “The true economic picture in LEX

  1. Pingback: We’re #100! Lexington ranked as most sedentary U.S. city | Bluegrass reVISIONS

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