Higher Paying Jobs Crucial For Regional Quality of Life (Market Forecast by Jeff Collins)

My father used to say that the older you get the less you find you know. I must be getting old because I just couldn’t feel more ignorant these days. For example, why do my children get to chew gum during benchmark testing, presumably because someone did a study somewhere that found children chewing gum are better test takers than non-chewers, but they can’t chew gum in school any other time. Don’t we want them to perform at their best all the time?

I have also been confused by the ongoing debate exemplified in a number of recent editorials talking about parks and trails and economic development. Specifically, several folks have written to make the case that without economic development we can’t afford to purchase public amenities such as parks, trails, etc. The explicit argument is that parks and trails are luxuries, which can only be purchased as long as the city is creating jobs. Further, there is an implicit argument that many people who want trails and parks are the same people who make it difficult to create jobs — the same jobs that pay for the things the “trail people” want. The “trail people,” for lack of a better term, argue what good is economic development if the bigger town isn’t worth living in. That there seems to be little crossover between the two camps leads the casual observer to conclude that trails and economic development must be the economic antithesis of each other.

Initially, the logic is sound. Parks and trails cost money, and that money is usually in the form of tax dollars. These tax dollars are a direct result of the economic activity of people with jobs buying property and goods and services. If we decide the current level of parks and trails is insufficient and we want more, then we will have to generate more tax dollars. There are a couple ways to do this: add employment, increase the incomes of the current population, or some combination of the two.

One problem comes to mind with simply adding employment to pay for more publicly provided amenities. One reason people seek to increase amenities such as parks and trails could be the current supply is overly congested. If this were the case, adding more people and parks simultaneously does not necessarily alleviate the problem, unless we could only attract folks who have good incomes and don’t care about parks. This seems unlikely.

The alternative of increasing incomes of the current population seems also problematic, particularly given the current national economic climate. Even in the long run, unless the rest of the world suddenly decides they want more of whatever we produce and are willing to pay for it, it is difficult to see incomes rising at a rate substantially faster than they do anywhere else.

The most likely scenario for increasing the tax base to pay for desired improvements to the quality and quantity of civic amenities is to create employment that comes with relatively high wages. Let me restate this at the risk of being redundant. We need to create jobs but they must be associated with salaries or wages that are, on average, better than those jobs we currently have. The tax yield per capita needs to increase to afford the quality and quantity of publicly provided amenities we need.

“Aha!” you say, “but what do you mean by publicly provided amenities we need?

“I thought you stated that amenities like parks and trails were luxuries.”

I never said nor would I ever say that. Public investment in amenities is absolutely essential to economic development just as economic development is absolutely essential to the capacity of a municipality to invest in public amenities. Local government faces the tasks of translating public preferences into good public investments and wringing every last bit of value from a tax dollar.

What we need to realize is that the “Green Valley” concept is and must be more than a marketing slogan. It has to be a commitment to a regional development strategy that acknowledges and embraces the fact that the folks we want to attract place a high value on the quality of life investments embedded in the Green Valley concept. We also need to understand that public investment is not cheap. To maintain and enhance quality of life in Northwest Arkansas will require a substantial and ongoing financial commitment.

Finally, I have used parks and trails as an example of the types of public investments that foster quality economic development and that are paid for with quality economic development. I could just as easily have used schools as my example.

(Jeff Collins, Ph.D., is an economist and partner in Fayetteville’s Streetsmart Data Inc. The company produces a quarterly report on all aspects of real estate in Northwest Arkansas. More information may be obtained by calling 479-872-1000.)