There was little time for a celebration following the Greater Memphis Chamber’s announcement about $1.2 billion in private investment and 14,000 new jobs.
The day after the Chamber announcement, Brookings Institution ranked us as one of the worst-performing metropolitan economies in the world — #171 of the world’s 200 largest metros. The report wasn’t unexpected based on negative trend lines for a decade, but putting it into a global perspective was nonetheless jarring.
That said, it’s worth noting that we finished higher than Denver (174), Birmingham, AL (175), Las Vegas (179), Indianapolis (183), New Orleans (186), San Francisco (1987), Atlanta (189), Kansas City (190), and Richmond, VA (191). But that’s more like a “misery loves company” explanation. Nashville was #89.
First, the good news. The total is actually more than the $1.2 billion the Chamber announced. The capital investment amount was based on a total of companies that created 25 jobs or more and $5 million in new investment. Unfortunately, only 3,700 of the total 14,000 jobs were within Shelby County, but 90% of those Shelby County jobs were inside Memphis.
Welcome News Cries Out for More Detail
These milestones would hardly be worth celebrating in the 1990s when it was routine for the public capital investment was more than $1 billion a year and new jobs were regularly above 10,000. But those heady days were pushed deep into our memories when the decade of the new century brought with it the loss of about 40,000 jobs and the Memphis metro economy languished even before the recession made things even harder.
While it’s too early to make broad statements about Memphis turning the corner, it was at least some better news for a change. If you were paying close attention during the last mayoral campaign, you already knew about the new jobs. It was part of the Wharton campaign’s bragging points, and although it was questioned by a couple of members of the news media, the Chamber’s numbers validated the campaign’s numbers.
These kinds of announcements are welcome but we always wish for more details. The capital investment number is always headline-grabbing because it sounds big, but it’s people that matter more to us. Because of it, it would be helpful to know the average salary for the 14,000 new jobs, the industry sector breakdown for the jobs and the average salaries, and a correlation with the tax freezes and business incentives given to each company (both inside and outside Shelby County).
Also, the statement that 44,000 existing jobs were preserved cries out for more information, because our already loose tax freeze policies were yet again made even looser for the purported purpose of protecting jobs that are already here. The justification was always up for debate, but more to the point, the loosening of the PILOT rules drove up the amount of waived taxes to roughly $50 million every year and make threats of relocating now pro forma.
Good, Bad and Percentages
The devil is always in the details, but if more details were released, maybe, just maybe, we’d have more things to brag about. Or a clearer understanding of where we need to concentrate.
Now, the bad news – yet another negative warning about the Memphis MSA’s economy from Brookings Institution. Then again, it was pretty negative for the entire country. Only one American region made the top 20: Houston, which came in at No. 19, a notch above Kuala Lumpur, Malaysia.
In Brookings’ list, 90 percent of the world’s fastest-growing economies were outside North America and Western Europe. And 95 percent of the weakest-performing metro areas were in the long-dominant economic powers of the United States, Western Europe, and Japan.
In one respect, it points out the pitfalls of dealing with percentages in setting economic indicators. The economies of developing nations have a tendency to show up in the higher rungs of the listing, because the base number is low . As a result, when the economies become more of the global mainstream, the percentage tends to be higher than cities that have been operating at their potential for awhile.
It’s the Region, Stupid
The same goes for cities that have bottomed out like Detroit and Buffalo, which ranked #72 and #68 respectively. Are we really supposed to believe that they are better examples of free-wheeling capitalism than Denver and Atlanta? If you were buying stock in a city, which would you invest in?
Like the Chamber statistics, the Brookings ranking cries out for more context. In addition, we would welcome an explanation about why the Chamber’s statistics don’t agree with the Brookings’ statistics although they are essentially reporting on the same period of time.
By the way, from 1993-2007, Memphis ranked #115 in the Brookings Institution rankings. From 2007-2010, it was #150. Clearly, we are headed in the wrong direction, and we’ll have to put together sustained progress to get back to the middle of the pack.
The rankings are part of Brookings’ program highlighting the economic importance of regions. The 200 largest metropolitan economies it analyzed account for nearly one-half (48 percent) of global output, but contain only 14 percent of the world’s population and employment.
Headlines Bad As Economy
The headlines about the Brookings Institution’s report were so unfortunate: “Memphis economy ranked with world’s weakest (Memphis Business Journal),” “Memphis economy one of world’s worst (Commercial Appeal),” and “Memphis ranked 171st for economic performance out of 200 major cities (ABC 24).”
It wasn’t the Memphis economy. It was the Memphis region’s economy.
We’ve said it before. We’ll say it again. Our problems are regional in nature, not about a city’s problems.
The poverty, the crime, low educational attainment, and per capita income are Delta phenomena. If headlines would more accurately refer to “Memphis region” rather than just “Memphis,” perhaps we could create a momentum for regional focus, agenda-setting, and action that is so lacking now.
While success in the past does not guarantee success in the future, it’s sure a lot easier than proving that failure in the past does not guarantee failure in the future. A good beginning is for everybody in the metro area to get into the game to prove that failure can give way to success in the future.
So where did the bulk of those 14,000 jobs go? Desoto county? Any details on the type of jobs?
Look for New Orleans to climb that list as Detroit already has. They are ranked below us for now, but won’t be for much longer. What will be difficult to swallow is if we continue to lag, while others with their backs against the wall find a way to turn it around. Without more, that is exactly what will happen.
The Mayor’s office needs to be more forthcoming about job creation statistics. Transparency might put an end to the line that’s forming for PILOT’s. If it becomes clear the money isn’t there, it will be less easy for city political leaders to give it away. They also need to embrace the potential of a creative artists’ economy, instead of continually being skeptical. New Orleans has a city office of Culture. They have embraced their bohemian culture and are beginning to flourish because of it. How many young, creative, passionate Memphians have visited New Orleans in the past few years, never to return? The Mayor’s office should bring in outside economic development consultants, to create a long-term growth strategy that clusters around logistics and transportation, but incorporates strategic investments in the future – greener shipping, smarter, more efficient land use, capitalization on river and rail, a new food cluster model, reclamation of greenbelt, urban farming incentives, environmental stewardship. The Mayor’s office should embrace a Complete Streets policy as soon as possible and set an aggressive goal of increasing density in the core, which is the ONLY way to fix city finances. Do all of this in the next year and Memphis might have a snail’s chance at economic recovery.
Anon: 3:13 I like your way of thinking. Keep it up.