ISSUES 2017 11/19/17

Steve McIntosh
Thursday, November 16th

Jeremy Hill -- director of the Center for Economic Development and Business Research at Wichita State University -- discusses the year ahead for the regional economy

00:23:59

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

This is a huge money seventeen I Steve Macintosh and our guest is Jeremy hill director of the center for economic development. And business research at Wichita State University. Welcome again to issues Tony seventy good to have you this. It's been a while her for a little background. On what would you explain to us that Jeremy if you will what is a sinner what are your mission there. Our offers thanks for let me come back guy I always appreciate coming here and every time on area lots of questions from the public so I know a lot of people are engaged with this that with the show. We'll background of the senator at the center is an applied research sinner we studied economy we collect data that. State local and national level somethings that are named publicly available and run through them. To give insights and information tonight only businesses the community leaders and the public again often we get calls all the time for people. Just at home wondering what's going on about one particular very Henman just when you gather your information. Ariza Denny's is done by students or what do you do that all I you have it a team of people on staff full time people and then we hire students often on. For various tasks that we where they were going through so. We spent the last year and a half using a student giving it is a master's degree. And he built a data website that would automatically collect some of the data so. In a just like the world we're improving slowly trying to figure out how did do some automation tennis. You know a lot of ground work. Polling data so you're you're doing this all kind of lives in my hand bills and you've got to bodies as well yes it is. Do it to this way from the computer to make it simple play yeah it is a data IT guy and he was he he automatically pull the data in a nice night with us in the data still being folders on its people are good for something yeah. Get a now who are your clients Jeremy who uses this information. Because back to the business community comes to us regular talking about market research understand how to expand. But coming here locally but nationally that we have public leaders all across the state. They'll come talk to us and say. And there are working on different policies than whatever opinion block out the public come to a swap professors want students all kinds of people come to us all right so. And you charge of how much for this information. Well as the data center we do you help give information so this is none knowing where public data is our understanding which data sources going to be more relevant whether using. We just go India for just thirty minutes or less for one help provide that as a public source but then as if it starts using is that were buying and we go in charge for the services. All right now we're gonna talk about. Your forecast for the year him which is it becoming quite at a little tradition here in Wichita a bit. Person like to get your take on a possible to ice that Tyson chicken processing plant and Cedric county. Without getting to controversial what are what are your thoughts on the net. What when he is look at a regional economy you adding jobs. An ad being an opportunity. One way or another is gonna grow an economy so from just a mathematical perspective that's the way we usually take it. Use and expand the regional economy now that doesn't mean. They nimby not in my backyard kind of question but from from the broader perspective is gonna grow our economy will add value particularly. In some segments of our labor force that is been rather weak when I see that. Where we laid off a lot of production workers over the last several years some of whom have not re engaged. And there is out there are people out there that that. This might not be to their fullest kill potential but this might be something that would give some and re employed in the labor force has been out of the labor force for awhile that's been happening a bit quite a bit over the past few years. Facility has to retrain and maybe not make quite as much money and so forth right yeah I think I think which saw it is little from more pronounced than Kansas in Kansas in which some are more pronounced than the national level. Where we had someone in the workforce that is no longer needed. And they're having to deal that retraining or moving to a whole new industry. Up. Again that just with kind of a sidebar here they're talking about the the economic recovery in this area since 2008. To them then the the recession and we get hit really hard victim. Where we end on that led to have we come back fully to where we were or will we ever come back fully. That's a good question let me let me give you just one example of employment have we come back relative to employment for the bush on area and the answer is no. We're about 121000. Jobs less than we were in a previous peak. To Kansas is is backed his previous peak. The US is above this previous peak renewed and employment other cities our size our bigger than it was before now. Should be kick ourselves and say all this is everything that has to do elected officials or are feeling that no I think. The you know there are some policy choices that could've helped. Improve for such little bit but we kept it in context that our core industry was shifting and that really take a step. Is it kind of like. Well I guess that the Rust Belt type thing manufacturing. And that happened one up around Ohio in the Great Lakes and car manufacturing is over the guy like that. As far as. Changing how we do things in manufacturing. Great analogy C think in the longer term that Rust Belt when Mitt. That changing shift in technology forced those. Towns to really rethink it and a lot of those jobs start shifting itself. Well that was a point in time when that industry was that cluster was really close admit in that one region. Air spaces like that however we were already. Spread out across the world so there other space communities like us have felt that if they did general aviation but there was that many communities like ours that. Are are just like RC had that same decline. The should go back a little bit due to Tyson we're talking about I think we're talking about and jobs that pay 1213 dollars an hour. And and I think those are great jobs but when jobs any job is created in a market like this. Disappearing other jobs as it had that ripple effect going out from liked. Okay yes so. We got to put this in context is a couple ways first is it a lower wage than we normally have been a bigger city like ours it's gonna this is lower. Then we would expect to some other other manufacturing jobs which are much higher than that. However to your point. You get those more people employed more people in this region and they have income their pain house payments they're going out and consuming and that's where you're gonna have that ripple effect back soda consumption side. And I that I would imagine that this supply your needs for Tyson is awesome going to be a benefit to the region right. They're gonna have to have a lot of other resources to make that work and it's not gonna be something that just. Happen in a vacuum they're gonna have some ripple effects and other companies are there industries around us. Asian detractors would say yes and you're gonna put pressure on your schools and social services and things like dead though. But any time there's growth that's gonna happen right. A good question so that's the capacity question first we're nowhere near our previous peaks so he's our capacity will there there's definitely flexibility. Capacity specially in the lower skilled jobs. I think about essential city we have this. We have this continue out migration to this hinterlands is what I say to the fringe to the edge people you're moving out to new homes. But what's happening that housing stock within the central area what's happening to schools there are now we've. The cuts and shifts in education. Within the city. But I think you 16100 jobs most of this can be re employed people already living here than not generally come moving in. I don't think that had to build a fairly big burden on a town has over 300000. People. T town and in a larger workforce there are are MSAs 300001600. Jobs is pretty darn small and it's probably going to be employed by people already living here. Hyun the other thing is make it's much news recently is still is is the location of a second Amazon.com. Headquarters. Debt realistically. This is not what it's like that can happen. And you were imported hunt you know thousands of people the in that case and look to defuse those for Amazon and and they did have some criteria of the size talent as a Kansas City was on the list. And it makes sense that there's larger Ares would need to have it because there and those jobs are not just employing people locally they're gonna import people in there and it would have a burden on that. Public services not just schools but it's roads and housing stock and everything. And fertile like ours that this has been consistently growing we we really couldn't handle a massive growth like that. Our housing couldn't handle it and and the Nike says if they're peace more problems. We've been seeing read reports recently of increased sales of Boeing jets which is an impact on Spirit Aerosystems in Wichita. Right so an aerospace we have this continued each continued shift away from a general aviation to commercial. And that's that's been a real blessing for this regional economy and you know if it hadn't been for that we would be in a much deeper issue today. Good point it because you talk about general aviation which is room would you say is a smaller the smaller planes. Over in my business gesture isn't just in the new talk about commercial uses a big difference bright what's feared a much bigger ones well and spirit has supplies to general aviation and other ones do but it. That side of spirit is what's really growing our economy right now I keeping air space. Instead of losing a lot of jobs we've been growing in the bigger companies are just losing in some of the smaller companies that supply chain Sosa as an inching thing going on right now posters who. Would you those top employer but the work also keeps smaller subcontractors besiege you just saying. Well so in there or we're looking at manufacturing is either men flattered declining some and it's not from our bigger employers like spirit it's from a smaller ones and he can't really. Gaudin and for your parent who and how small those companies are. He disappearing or shrinking lead I got a feeling that spirit is developing a more more capacities to help the big. Really big companies for billing. And they're probably taking in some of the previous service as they have before so that's supply chains shifting we just can't really put your finger and how that's ice age shifting in our region. They're listening to issues Tony seventeen on the Entercom radio stations that I guess is Jeremy hill director of the center for economic development and business research at Wichita State University. And at the center releases and annual report that the local business community and community anticipate he's missed some interest. What did generally what is your forecast indicate for jobs for the Woodstock area in the year ahead. Okay our forecast for Wichita is to grow by point 4%. They have some context that is about where we've been brewing for the last several years. It is up and down this last month we grew a lot more than. A point 4% but when you average it out I think that says pretty consistent slow growth expectation. And given that they'll link for this cycle this is probably a more of a positive one however I don't think my point 4% was well received. By the people buy sell a public speaking that it was too negative how does it compare with other areas Jeremy earlier so. It depends when you go to more manufactured related towns they vary T director declining to growing much faster. And then he compared to other MSAs are size generally they're growing a lot faster than us so. Our size city would should be growing that when you get to a manufacturing concentrated city it's not that unlikely to not be doing as well. So yeah you're giving your comparing your demographic size of the community. That's one thing that what you're saying is you have to get a compared to the similar size communities who are doing the same kind of work to operate right in that it varies a little bit or more in the middle of the pack some growing much faster some declining and that manufacturing. Custer to tap so so you know we shouldn't you I should take a couple ways as it Purdue and okay. But we could have a lot better growth because of our size of our economy. What do the geographic areas do you deal with it. Just who is Cedric county or is it new poll or this and yes that senator we have people all across the state what that we work with me go to towns. Doing Allah conferences and Townsend we also had other states and communities come to us to do some research that. That we specialized even travel a little bit so we've been daughter on the state so we had five locations justice last month while. What labour segment. Here locally will present the most opportunity for employment well the one that has been just too they have been very consistent. Year over year have been health care and many us to go over to professional business services. So they continue to add jobs they continued to grow up I just have concerns about their ability to it to have that. The labor supply for those two sectors what was it again. She's over health care health care and that's because he is aging population in Kansas always taught people moving from a western Kansas meeting that and just overall change in health care and and then you have the professional business services which is a very broad category yeah lots of jobs in Atlantic is that there and but the easiest one for people wish on notice is Coke in some are tax accounting in neck architects those of the winds like college stuff it's not yet you need this analytical skills some business skills to to us to really function than those amendments will be looking at as far as employment in manufacturing and arms manufacturer employment is not optimistic just because it hasn't men we don't see any real growth for that right now. And what's holding us back this last year we had this global. Protectionism. The nicest part of it right our trade barriers and trade and negotiations could really affect manufacturing this next year. But that's the negative side the positive side for manufacturing if something does come out. The global economy in our trade partners continue to improve our value dollars coming nets are because it can be cheaper. It's just I'm not sure how much will happen because of the political rhetoric about trade today what does history and only history may not be your strong suit or be. Here aerial what does history say about. Protectionism seems like there had something to do. Listed the biggest downturn the ball back in the Great Depression right so is so yeah I don't know and I again and economists out there that's gonna say. Let's let's remove our trade barriers remain. I understand that they need in the frustration. Of this and why the US was wanted to renegotiate or have the concept every negotiation. But. And there are some things that can be improved. Overall talking about and the negative light that will last asking Herter trade desk and heard manufacturing hasn't hurt Kansas and when shop. What's ahead. For the government sector when it comes to hiring. All right so. Government is really dependent on the structure economy and given that our overall state economy. We expect state is a week which calls going to be still that point 4% now a lot of growth. We don't need is a lot of jobs being created or will. Or income being improved I just don't think it's going to be a lot of room for growth in state and local employment. That federal federal government were still doing some expansion for fork out so we'll see more of that tanker coming on mine and I don't know how many jobs there. How how soon now come over the next year too but that was the original plans for a lot of to come on mine for eighteen so. Usually when he Sheehan retail. On the retail I think is a good question we had just a pretty consistent market system it up in dandruff but we have a large growth in retail. Over the last couple years and a make our economy really can support some of that so our forecast for tax retail sales for. Which sounds pretty weak and for the state it's pretty weak and even for employment I think we've been over built. I think. People's choices and and because a tight. Pennies at home people are making some alternative choices about spending and I think that's gonna prettals back a little bit see a lot of empty retail building so it. Well so so that's interesting we've had all this retail development of the last couple years. And but they haven't removed the old retail buildings so we're gonna have a lot of commercial real stayed on the market and we have to work through that and only her way to work that is a growing economy or. Or destroyed the buildings right now. Allows them to bulldoze them down one of the other aura or scampered down or pressure him. I'm rents and an effect that you you mentioned real estate well what was what you think about real estate. What a brilliant achievements are real stems timeout the general dynamics just has me concerned about it but I think he should go go talk to some of those other RS experts and Hamlet bit. That buy and sell and keep track of that at all and knows what I know about real estate location location location putts that's definitely a prior one not supply and demand so that I find it usually is something called the misery index SL about yes so. In and it's still today is it's been really effective tool in communicating how people home field vs how the economy so. Right now pretty dismal about the economy say Iran back point 4%. But when he try to measure how households feel. We take a couple different measures to determine that and this is what people at home feel a today they feel just as good as they did way back before he went into the Great Recession. So households. People are living here murky here that are they've got a job there possible that the home values go on out. And there's very few people unemployed. By the technical definitions of households a film pretty good today. What do you what do you think about it you look over the past few years. To live up drain business brain drain expertise drained of every lost. And good people that will never see back again. Well that's and that's a good fit to the misery index senseless reasons did that we're have less misery here is we've had this out migration of talented skilled people going to other markets finding. Upper mobility in their careers. And so our population numbers for the state was almost zero growth last year. And the reason why easier growth is not because of births are deaths or anything like that it was net migration. As have people move and now and so we have less people who are unemployed well that makes certain people who are living here now feel good look at what. We survived and doing about it do you study we. Wage growth and things and then yes sort of look at waged all out to hear about that wages so when you look at income and wages and it is it being coming up a little bit and we wanted to come out more racists and strength in the and the business market saying that they. Willing can pay more and it's come it's come up but if you look at house diverge per capita income over the last several years from the US. We were right in mind of the US and the last sever years we've we have not kept up with our per capita income. Unknown to many people listing right Jesse well I think it's that seems to be by experience wages have been going up but what you're saying is. In relation to other Americans were good about the same as the rest of what I know I think the US other Americans US is improving. Much faster than you are I misunderstood ethics and now we're not really keep an eye but we got to put him one little caveat here you think billions. Though one benefit we have in the midwest is inflation remains spurred do you low. And that means our dollar continues to get to spread a little further than other locations so we may not have that upper pressures and income. Which people at home really would like to have more buying power however. Your dollar still can go further here than tents and other places out and lecture will tell me you give me thoughts and Eisenhower. The new Eisenhower airport you're in Wichita. It's a beautiful thing and everybody goes there and in UZ airport. Comments student I knows of what a great thing it is but did at home does it have an impact on on our economy as flowers and well and anyway. I think has it impacts too big place person households it's a wonderful tend to be able to have this as an asset and T so the airlines continue to want to be here and work with our this regional market and make connections for people who live at home so. You can live here and your family might move to Atlanta and you can get connections and amid see them or go one on. On a vacation. On the on the business side I think this is agree Jim is one of the assets that we have. Now that would help sell this community to future prospects win if your company to confer. An airport that did not only has connections that also looks nice. This part of you community pride I think the Eisenhower is done a really good job on being in an asset to the real economic development tool. All right here's here's it to have a broad question what is the real secret to. To growth in local business. A vote for local business that we we we always talk about broader economy and a get into the details of of that business to business case. But if your your business here. And you don't have to be here. The secret Ares is labor right you're looking for markets to have quality skilled labor and that's something that we have abundant in Kansas and here. But if your business local serving. It's just growth and demand that go back here real status though location and access to because consumers. You know a trend and I'm sure you've seen this heard about it. There's a trendy looking bigamy LO baby boomer one of these days I'm gonna retire in their there's some expertise to its did his neighbors start. Flood to the sidelines. I don't fill those jobs. Right so but you don't look too much like a baby boomer you're looking good for mr. whenever you overall OK okay and so so what is it and everything police officers firefighters and every right so what's the shift in that labor Hedo it's enter saying that. We've had several. Points and timing that though we're gonna be in a catastrophe this is something problem there labor market. And things tend to work out and baby boomers are still wanting to use their skills and expertise that they're still engaged in labor market. And the market itself the shifting which college changing the need for labor overtime. I think there's some significant problems at particularly for which because the baby murmurs mean you factory and airspace is one of oil and gas is one of them. Very a lot of older baby boomers in there with screen skills. And the workforce is not quite ready to match that need so. There's two ways that's gonna happen either either other people to figure out that. Those wages go up and Fiat has agreed employment opportunity and get those skills or those industries starts. Shrivel a little bit how this market channel visits you real. Likely scenarios with baby boomers exiting particular are are which are market we've been talking about the year ahead what are you optimistic or pessimistic about the long term look at 45 years from pocket or do you even deal with it though would you look at long terms quite a bit so. Yeah I think there's a lot of core assets that we have in this region. That gives us some strength long term and and I'm big and more long term that we have and you've you've mentioned airport we mentioned some of the core labor. And so but I but I think long term I think what's what is the strength of our economy and those are the ones I'll go to you as as are what we're doing well. We're we're out of time a thanks again for Bemis is always a treat our guest Jeremy. Hill director of the center for economic development and business research at Wichita State University again thanks for your time this point. That's all for this edition of funny to issues Tony seventeen will be back next week thank you for listening. I'm Steve Macintosh.
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