Voice For Liberty

Tag: Economic development

  • Is the Wichita mayor satisfied with this?

    Is the Wichita mayor satisfied with this?

    A gloomy jobs forecast is greeted with apparent approval by Wichita Mayor Jeff Longwell.

    We have to wonder: Did Wichita Mayor Jeff Longwell read before tweeting?

    Click for larger.
    A recent Longwell tweet references news reports regarding a forecast from Intrust Bank Wealth Services. Titled 2019 Economic Outlook and Market Perspectives, it contains this regarding Wichita:

    The Wichita economy saw jobs lost in 2017, but improved last year. Job growth is expected to trend slightly higher in 2019, buoyed by manufacturing and professional services. We anticipate the Wichita economy to expand this year, but grow at slower rate than the U.S. and the majority of metro areas. Business/consumer optimism and aerospace demand should help power the local economy; however, trade issues, commodity prices, lack of skilled labor, and slow population growth will likely limit growth in southeast Kansas.

    There’s not much good news in this forecast, except that job growth is expected to grow rather than decline as it did two years ago. So we have to wonder why the mayor retweeted — presumably approvingly — this grim forecast.

    It’s a continuation of a trend:

    • Several times Longwell and other city officials have promoted a study claiming Wichita is a highly “recession-proof” city. That study is nonsense and ignores key economic data and the definition of a recession. See Wichita mayor promotes inaccurate picture of local economy and Wichita, a recession-proof city.

    • Responding to a different forecast of job growth in Wichita for 2019, Scot Rigby, who is Assistant City Manager, Director of Development Services for the City of Wichita, tweeted “great news.” But that forecast is as gloomy as the Intrust forecast, with job growth expected to be about half the national rate. See Job growth in Wichita: Great news?

    • Generally, Wichita officials are pleased with the local economy (Former Wichita City Council Member Pete Meitzner: “We have enjoyed great progress and growth during my two terms as a City Council member and I plan to do my part to assure Sedgwick County is part of this continued success.”) But the available statistics are grim and are improving only slowly. See Growing the Wichita economy.

    If Wichitans don’t read beyond the rosy headlines and tweets from the mayor and city officials, they will be uninformed, and unfortunately, misinformed by people we should be able to trust.

  • Wichita mayor promotes inaccurate picture of local economy

    Wichita mayor promotes inaccurate picture of local economy

    Wichita city leaders will latch onto any good news, no matter from how flimsy the source. But they ignore the news they don’t like, even though it may come from the U.S. Census Bureau, U.S. Bureau of Labor Statistics, or U.S. Bureau of Economic Analysis.

    In his media briefing today, Wichita Mayor Jeff Longwell cited an article promoting the purportedly recession-proof and growing Wichita-area economy. 1

    Based on the article 2 Longwell cited Wichita’s low unemployment rate and growing job count.

    One quote from the article highlights Wichita’s low unemployment rate: “In 2018, the city saw unemployment fall to 3.5 percent — the lowest it’s been since May 1999.” Here’s some data regarding this claim:

    In the table, we see that the unemployment rate (monthly average) for 2018 is nearly unchanged from 1999. Also nearly unchanged for these 19 years are the civilian labor force and number of jobs. Both values are slightly lower now. This is not “steady job growth.”

    The article the mayor relies upon doesn’t reflect the economic reality in Wichita. It isn’t even close. Yet the mayor and other city officials have heavily promoted this article on social media.

    Mayor Longwell also said, “We want to celebrate some of our successes because it has not been easy to get here and it’s been very intentional, and the things that we’re doing that help make Wichita a great place to live but more importantly a place where we can ride out a potential recession that may hit the rest of the country at some point in time and we think that’s a great place for us to be right now.”

    Click for larger.
    Regarding recessions and being “recession-proof:” The usual definition of a recession is two consecutive quarters of declining economic activity as measured by gross domestic product. For the nation, the last recession ended in 2009. For metropolitan areas like Wichita GDP data is not available quarterly. Annual data, however, tells us that since 2011 — well after the end of the last national recession — Wichita has had two separate years in which real GDP declined, 2013 and 2017. 3

    Click for larger.

    That’s like two recessions in Wichita at a time the national economy was growing. Is that recession-proof?

    The mayor also presented a forecast that Wichita will add 2,700 jobs in 2019. The source of this forecast is the Center for Economic Development and Business Research at Wichita State University. 4

    For the Wichita metropolitan area economy, adding 2,700 jobs in a year represents 0.9 percent job growth. Is that good? Nationally, the economy is expected to continue strong growth, although perhaps slightly slower than in 2018, in which nonfarm jobs grew by 1.8 percent. 5 Nationally, job growth is forecast at 1.7 percent for 2019. 6 Wichita’s forecast rate of 0.9 percent is 53 percent of the national rate — barely more than half.

    Click for larger.

    The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. 7 Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs. Yet, City of Wichita officials tout “steady job growth.”

    It’s not only jobs and output. Personal income has grown only slowly. 8

    The Wichita metropolitan area population is growing, but at a rate slower than most metro areas. From 2010 to 2017, the Wichita metro area grew in population by 2.3 percent. For all U.S. metro areas, the population growth was 6.5 percent. Of the 382 metropolitan areas, Wichita ranked 245. Considering just the change from 2016 to 2017, Wichita’s population grew by 0.1 percent, ranking 268 of the 382 metro areas. All U.S. metro areas grew by 0.8 percent over the same period.

    For net domestic migration, Wichita experienced a loss of 2.9 percent of its population from 2010 to 2017. This ranked 295 among metro areas. For 2016 to 2017, Wichita lost 0.5 percent, ranking 293, nearly unchanged from the larger earlier period. 9

    This slow population growth and out-migration is happening at the same time Wichita-area leaders tell us that we have great momentum going forward. But the data — domestic migration, employment, gross domestic product, and personal income — don’t support what our leaders tell us.

    —
    Notes

    1. City of Wichita Mayor Jeff Longwell’s Media Briefing January 31, 2019. ↩
    2. Handy, Emily. The 7 Most Recession-Proof Cities in the US. Livability. January 22, 2019. Available at https://livability.com/topics/careers-opportunities/the-7-most-recession-proof-cities-in-the-us. ↩
    3. U.S. Bureau of Economic Analysis, Total Real Gross Domestic Product for Wichita, KS (MSA) RGMP48620, retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/RGMP48620, January 31, 2019.
      The All industry total includes all Private industries and Government. Real GDP by metropolitan area is an inflation-adjusted measure of each metropolitan area’s gross product that is based on national prices for the goods and services produced within the metropolitan area.
      Also: U.S. Bureau of Economic Analysis, Real Gross Domestic Product GDPCA, retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/GDPCA, January 31, 2019. ↩
    4. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision. ↩
    5. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm. ↩
    6. Yandle, Bruce. Block out the noise: Here’s the 2019 economic outlook. Available at https://www.washingtonexaminer.com/opinion/block-out-the-noise-heres-the-2019-economic-outlook. ↩
    7. Weeks, Bob. Wichita employment to grow in 2019. Available at https://wichitaliberty.org/economics/wichita-employment-to-grow-in-2019/. ↩
    8. “For all metropolitan areas in the United States, personal income rose by 4.5 percent. For the Wichita metro area, the increase was 2.3 percent. Of 383 metropolitan areas, Wichita’s growth rate was at position 342.” Weeks, Bob. Personal income in Wichita rises, but slowly. Available at https://wichitaliberty.org/economics/personal-income-in-wichita-rises-but-slowly/. ↩
    9. Weeks, Bob. Wichita migration not improving. Available at https://wichitaliberty.org/economics/wichita-migration-not-improving/. ↩
  • Wichita jobs and employment, December 2018

    Wichita jobs and employment, December 2018

    For the Wichita metropolitan area in December 2018, jobs are up, the labor force is up, and the unemployment rate is down when compared to the same month one year ago. Seasonal data shows a slowdown in the rate of job growth and a rising unemployment rate.

    Data released yesterday by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a mostly improving employment situation for the Wichita Metropolitan Statistical Area.

    Total nonfarm employment rose from 296,900 last December to 302,300 this December. That’s an increase of 5,800 jobs, or 2.0 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 1.8 percent.

    The unemployment rate in December 2018 was 3.4 percent, down from 3.5 percent one year ago.

    Considering seasonally adjusted data from the household survey, the labor force rose by 596 persons (0.2 percent) in December 2018 from November 2018, the number of unemployed persons fell by 394 (3.6 percent), and the unemployment rate rose from 3.5 percent to 3.6 percent. The number of employed persons not working on farms rose to 299,120 in December from 298,918 the prior month, an increase of 202 persons, or 0.1 percent.

    Click charts for larger versions.

  • Wichita, a recession-proof city

    Wichita, a recession-proof city

    Wichita city officials promote an article that presents an unrealistic portrayal of the local economy.

    Click for larger.
    An article promoting the Wichita economy 1 was noticed and promoted by official City of Wichita sources.

    A tweet came from the official @CityofWichita Twitter account and reads “We have been named one of the top two recession-proof cities in the nation by @Livability. Wichita was praised for its ability to withstand turbulence in the national economy, steady job growth and the state’s low income-to-debt ratio.” 2

    Those who retweeted this include the Wichita Regional Chamber of Commerce, Wichita Economic Dev (“Promoting, building and preserving Wichita’s economic strength to ensure Wichita is the preferred location for new, existing and expanding organizations.”), and Scot Rigby, who is who is Assistant City Manager, Director of Development Services for the City of Wichita. City officials also shared the article of the city’s Facebook page. 3 That post has been shared 169 times.

    One quote from the article highlights Wichita’s low unemployment rate: “In 2018, the city saw unemployment fall to 3.5 percent — the lowest it’s been since May 1999.” Here’s some data regarding this claim:

    In the table, we see that the unemployment rate (monthly average) for 2018 is nearly unchanged from 1999. Also nearly unchanged for these 19 years are the civilian labor force and number of jobs. Both values are slightly lower now. This is not “steady job growth,” as Wichita officials proclaim.

    Regarding jobs, the article states: “In 2019, job growth is predicted to be positive and steady, and the city anticipates adding 2,700 new jobs.” As a source, the article cites an article from KSN News, which states: “For 2019, the job growth is expected to jump modestly by 0.9 percent, meaning 2,700 new jobs are predicted to come to the city.” 4

    This is an accurate report of what the WSU forecast said, except it doesn’t come from the Wichita State University School of Business, as the article reports. Instead, the source is the Center for Economic Development and Business Research at Wichita State University. 5

    Is 0.9 percent job growth good? Nationally, the economy is expected to continue strong growth, although perhaps slightly slower than in 2018. 6 Nationally, job growth is forecast at 1.7 percent for 2019. 7 Wichita’s forecast rate of 0.9 percent is 53 percent of the national rate.

    The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs. Yet, City of Wichita officials tout “steady job growth.”

    It’s not only employment that has been bad news. In 2017 the Wichita economy contracted. 8 Personal income has grown only slowly. 9

    We really must wonder what Wichita officials are thinking and where they get their data.

    Click for larger.

    —
    Notes

    1. Handy, Emily. The 7 Most Recession-Proof Cities in the US. Livability. January 22, 2019. Available at https://livability.com/topics/careers-opportunities/the-7-most-recession-proof-cities-in-the-us. ↩
    2. Twitter, January 22, 2019. https://twitter.com/CityofWichita/status/1087832893274157059. ↩
    3. https://www.facebook.com/cityofwichita/posts/2120892451290077. ↩
    4. KSN News. WSU releases employment forecast for city, state. Available at https://www.ksn.com/news/local/wsu-releases-employment-forecast-for-city-state/1691787634. ↩
    5. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision. ↩
    6. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm. ↩
    7. Yandle, Bruce. Block out the noise: Here’s the 2019 economic outlook. Available at https://www.washingtonexaminer.com/opinion/block-out-the-noise-heres-the-2019-economic-outlook. ↩
    8. “For 2017, the Wichita metropolitan area GDP, in real dollars, fell by 1.4 percent. Revised statistics for 2016 indicate growth of 3.8 percent for that year. Last year BEA reported growth of -1.4 percent.” Weeks, Bob. Wichita economy shrinks, and a revision. Available at https://wichitaliberty.org/economics/wichita-economy-shrinks-and-revision/. ↩
    9. “For all metropolitan areas in the United States, personal income rose by 4.5 percent. For the Wichita metro area, the increase was 2.3 percent. Of 383 metropolitan areas, Wichita’s growth rate was at position 342.” Weeks, Bob. Personal income in Wichita rises, but slowly. Available at https://wichitaliberty.org/economics/personal-income-in-wichita-rises-but-slowly/. ↩
  • Job growth in Wichita: Great news?

    Job growth in Wichita: Great news?

    A tweet from a top Wichita city official promotes great news that really isn’t so great.

    Click for larger.
    The @WichitaEconDev Twitter account is managed by Scot Rigby, who is Assistant City Manager, Director of Development Services for the City of Wichita. Its tagline is “Promoting, building and preserving Wichita’s economic strength to ensure Wichita is the preferred location for new, existing and expanding organizations.”

    The tweet observes “great news” in a Wichita Business Journal article reporting on an employment forecast. Wichita jobs are seen to grow in 2019, according to the forecast.

    But the Business Journal article didn’t provide any useful context. Once we learn more about what the numbers in the forecast mean, we may want to temper our enthusiasm.

    The forecast for Wichita metro area employment in 2019 calls for modest growth of 0.9 percent, according to the Center for Economic Development and Business Research at Wichita State University. 1 This follows growth of 0.8 percent in 2018. 2

    Nationally, the economy is expected to continue strong growth. 3

    The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs.

    Click for larger.

    Of Wichita job growth in 2018, the CEDBR forecast notes, “This marked a return to the level of growth experienced in the Wichita area from 2012 to 2016, after experiencing a contraction in overall employment in 2017.” The average annual rate of job growth for those years in Wichita was 0.83 percent. It was 1.82 percent for the nation, which is 2.2 times the rate for Wichita.

    CEDBR also notes, “Wichita’s unemployment rate declined throughout 2018 to a low of 3.5 percent in October 2018, the lowest unemployment rate for the area since 1999.” We should note that this decline is primarily due to a declining labor force in Wichita, rather than robust job growth.

    Back to Rigby’s tweet: There is good news — Wichita is not forecast to lose jobs, as it has in the recent past.

    But the rate of growth seen for Wichita is not robust, and that’s a serious problem, especially when our officials think it’s good.

    —
    Notes

    1. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision. ↩
    2. Employment figures are not available for December 2018, so I use a crude estimate for that month. ↩
    3. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm. ↩
  • Retiring Sedgwick County Commissioner Dave Unruh praised

    Retiring Sedgwick County Commissioner Dave Unruh praised

    The praise for retired Sedgwick County Commissioner Dave Unruh can’t be based on our region’s accomplishments under his guidance. That is, if people are informed and truthful.

    In January a group of Wichita business leaders submitted an op-ed to the Wichita Eagle to mark the retirement of Sedgwick County Commissioner Dave Unruh. I quote portions here, with emphasis added:

    He easily won re-election because his constituents and the rest of us knew he was dedicated to strengthening our community, region and the state.

    …

    In economic development Commissioner Unruh was chairman in 2006 when the board voted to build a world-class technical-education facility to ensure we remained competitive for new jobs. The National Center for Aviation Training is home to the growing WSU Tech. He also championed smart economic development programs that generated additional tax dollars and regional cooperation through REAP and other efforts.

    …

    In his perseverance to get things done and his belief in our future, he’s made a difference.

    On Sunday, the Wichita Eagle published a drawing by cartoonist Richard Crowson which lauded Unruh’s championing of the Intrust Bank Arena, Sedgwick County Zoo, Exploration Place, and mental health services. Responding on his Facebook profile, Commissioner Michael O’Donnell wrote this for public consumption:

    “A society grows great when old men plant trees whose shade they know they will never sit in” I believe this Greek proverb sums up the leadership of Dave Unruh as much as this stupendous Wichita Eagle cartoon. Our community has been blessed by the selfless and indelible leadership of Dave Unruh. I believe he was the most consequential local leader in our region for the last 2 decades and those of us fortunate enough to live in Sedgwick County are able to sit under the countless trees which Dave planted for us and our families for generations to come.

    There’s another way to look at the Dave Unruh legacy in Sedgwick County, and that is through the lens of data. A shiny downtown area is nice, but not as nice as a prospering economy. Here are some figures.

    In 2001, the year when Unruh assumed office in its first month, the median household income in Sedgwick County was higher than that of both Kansas and the United States. By 2017, Unruh’s last full year on the commission, Sedgwick County had fallen behind both, and by significant margins.

    In 2001, the poverty rate in Sedgwick County was lower than that for the nation. By 2017, the situation was reversed: The Sedgwick County poverty rate is now higher, and significantly higher.

    Looking at other measures of prosperity, we see Sedgwick County falling behind during the time Unruh was in office. Gross domestic product, personal income, per capita personal income, population, total employment, wage and salary employment, and manufacturing employment: In all these measures Sedgwick County underperformed the nation, and usually the State of Kansas. (GDP is available only for the Wichita metropolitan area, which is dominated by Sedgwick County.)

    By himself, Dave Unruh isn’t responsible for this economic performance. Many others contributed at Wichita City Hall and the Kansas Capitol, as well as some of Unruh’s colleagues on the Sedgwick County Commission. Unruh and they supported the interventionist, corporatist model of economic development, and it hasn’t worked. That’s why it’s surprising to see so much praise for Unruh. It’s sad, too, because if business leaders and politicians really believe the “Unruh way” is the way that works, the outlook for our region is bleak.

  • In Wichita, a gentle clawback

    In Wichita, a gentle clawback

    Despite the mayor’s bluster, Wichita mostly lets a company off the hook.

    As reported in Wichita City Council to consider a clawback, a company failed to meet the targets of an economic development incentive, and according to that agreement, owes the city $253,000 in clawbacks.

    The city council, however, decided to require the company to pay only $100,000 of that. The city reasoned that because the company is planning an expansion, that would offset the other $153,000 of the clawback.

    Wichita Mayor Jeff Longwell described this is holding the company accountable. The Wichita Eagle quoted him as saying, “This is why we’ve done it, to make sure that everyone is accountable and that the taxpayers, at the end of the day, win.”

    But despite the mayor’s bluster, the city failed to enforce the agreement it made to protect taxpayers. Instead, the company receives $153,000 in free taxes that it didn’t deserve, along with an interest-free loan of $100,000 amortized over four years.

    By the way, the same Eagle article reported: “Fiber Dynamics, a company founded by Darrin Teeter to commercialize technology developed at Wichita State’s National Institute for Aviation Research in the early ‘90s, hasn’t had to pay city property taxes since 2008, an estimated value of more than $500,000.”

    Actually, the company didn’t pay any property taxes on the exempted property. That includes county, school, and state taxes.

  • Wichita migration not improving

    Wichita migration not improving

    Data from the United States Census Bureau shows that the Wichita metropolitan area has lost many people to domestic migration, and the situation is not improving.

    The Wichita metropolitan area population is growing, but at a rate slower than most metro areas. From 2010 to 2017, the Wichita metro area grew in population by 2.3 percent. For all U.S. metro areas, the population growth was 6.5 percent. Of the 382 metropolitan areas, Wichita ranked 245.

    Considering just the change from 2016 to 2017, Wichita’s population grew by 0.1 percent, ranking 268 of the 382 metro areas. All U.S. metro areas grew by 0.8 percent over the same period.

    For net domestic migration, Wichita experienced a loss of 2.9 percent of its population from 2010 to 2017. This ranked 295 among metro areas. For 2016 to 2017, Wichita lost 0.5 percent, ranking 293, nearly unchanged from the larger earlier period.

    This slow population growth and out-migration is happening at the same time Wichita-area leaders tell us that we have great momentum going forward. But the data — domestic migration, employment, gross domestic product, and personal income — don’t support what our leaders tell us.

    I get it: We want to be optimistic about our future. But a false optimism is dangerous. It makes us complacent, even proud, when actual accomplishments don’t support that. We may be led to believe that what our leaders are doing is working, when it isn’t working. That is dangerous.

    Politicians and bureaucrats can’t be trusted to be frank and truthful about this. They want to be reelected and keep their jobs. Their actions let us know they value their jobs more than the prosperity of Wichitans.

  • Wichita employment to grow in 2019

    Wichita employment to grow in 2019

    Jobs are forecasted to grow in Wichita in 2019, but the forecasted rate is low.

    The forecast for Wichita metro area employment in 2019 calls for modest growth of 0.9 percent, according to the Center for Economic Development and Business Research at Wichita State University. 1 This follows growth of 0.8 percent in 2018. 2

    Nationally, the economy is expected to continue strong growth. 3

    The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs.

    Click for larger.

    Of Wichita job growth in 2018, the CEDBR forecast notes, “This marked a return to the level of growth experienced in the Wichita area from 2012 to 2016, after experiencing a contraction in overall employment in 2017.” The average annual rate of job growth for those years in Wichita was 0.83 percent. It was 1.82 percent for the nation, which is 2.2 times the rate for Wichita.

    CEDBR also notes, “Wichita’s unemployment rate declined throughout 2018 to a low of 3.5 percent in October 2018, the lowest unemployment rate for the area since 1999.” We should note that this decline is primarily due to a declining labor force in Wichita, rather than robust job growth.

    —
    Notes

    1. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision. ↩
    2. Employment figures are not available for December 2018, so I use a crude estimate for that month. ↩
    3. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm. ↩