Positives, negatives and expectations

It should come as no surprise the strong and various reactions to news that Golden Living would move at least 200 jobs to Fort Smith in the next two years.

Some saw the news, paired with the announced 600 new jobs from Sykes and the potential for the 400 Mitsubishi jobs to come online in the next year, as a clear sign the region is on the right economic direction and things are on the mend. Hundreds of metro areas around the country would have all but killed to land the jobs.

Others interpreted the news, paired with Golden Living moving about 15 of its top executives to a new headquarters operation in Dallas and the region’s unemployment problem, as more proof that the region can attract mid-level office and manufacturing jobs but still suffers from brain drain because we aren’t able to diversify with upward career opportunities.

Well, the world around us is typically not as bad or as good as we perceive it. Which is to say the truth is somewhere between the positives and the negatives.

First, let’s acknowledge that the 200-plus Golden Living jobs is a GOOD thing. Assuming the average pay is $38,000 a year (well above the $30,053 average personal income in the area in 2009), the 200 jobs will inject a $7.6 million payroll into the regional economy. Even when you back out an estimated $3.75 million (assuming $250,000 a year multiplied by 15) in payroll we will not get (and probably never did) because of the 15 Golden Living execs locating in Dallas, it’s still a positive.

The 200 jobs should help boost sales tax collections, home sales and better secure Golden Living’s presence in the region. Also, employees of Beverly Enterprises and now Golden Living have a good track record of community volunteerism and leadership. We’ll soon have a pool of 200 more employees from which more volunteers and leaders will emerge.

Why, then, would anyone have a negative response? Three primary reasons: Uncertainty, perceived lack of a broadening of economic opportunity, and an awareness of the deep economic hole in which the recession has placed the Fort Smith economy.

The Fort Smith area jobless rate spiked to 9.2% in January, with 12,215 estimated to be unemployed. This is a persistent problem that has grown worse. In January 2010, the region had 11,937 unemployed, and 10,647 were unemployed in January 2009. In the five years prior to January 2009, the January unemployment number averaged 7,219.

If the jobs from Golden Living, Sykes and Mitsubishi were to begin tomorrow, it would drop the number of unemployed by less than 10%, with the number of unemployed more than 50% higher than the pre-recession average. (And these are the official numbers. The real metro jobless rate — including those who have dropped out of the official workforce totals — could be between 15%-20%.)

A local media editorial noted after the Golden Living announcement that “Fort Smith’s job situation looks rosier.” Rosier may be a bit much. Some see danger in getting on the Rosier Train with a ticket to Everything-is-Positive Land. It’s like celebrating in the end zone when you score a touchdown late in the fourth quarter but your team is still down by three touchdowns. The game didn’t get rosier. You best run to the sideline and figure out how your team can score more TDs in the remaining minutes.

And one is not overly cynical or negative to know that the Fort Smith metro area has been hit harder than other state areas, and is not in a rosier patch.

According to figures from the Arkansas Department of Workforce Services, $168 million in unemployment benefits was paid out of the Fort Smith DWS (unemployment) office between September 2008 and September 2010. The money represents 2,800 jobs per year at an annual salary of $30,000. Unfortunately, the $168 million payout in the Fort Smith area is the largest payout in the two year period — even more than in the larger metro areas of Little Rock and Northwest Arkansas. And because other metro area jobless rates have improved compared to the Fort Smith metro rate, we likely still hold the unfortunate distinction of being the top benefit payout office in the state.

All that being said, I lean toward the positive — sans the rah-rah. Why? Because the region has good bones. Real potential. Good people.

The Regional Intermodal Transportation Authority could be a game changer with respect to economic development. Regional alliances are nice, but RITA — a true governing authority — can be a transformative economic engine if it is given more support and responsibility by cities, counties and area economic development officials.

The ongoing development at Chaffee Crossing, to include Interstate 49 work, could be the source of explosive growth if and when the national economy fully recovers.

University of Arkansas at Fort Smith Chancellor Paul Beran is refocused on kickstarting the Innovation and Entrepreneurship Center in a way that allows it to be relatively free of academic burdens and bureaucracy. He’s got some good ideas. Stay tuned.

And there is the U.S. Marshals Museum and the Fort Smith Regional Art Museum and Second Street Live! and a whole host of other progressive regional organizations and individuals working to improve the quality of their respective places in this region.

To build on the positives, regional officials might add two tools to our job development workshop: Aggressively reaching out to the new technologies and processes of tomorrow; and providing better and meaningful support for our local entrepreneurs and small businesses.

University of Arkansas Chancellor G. David Gearhart said recently the university is focused on programs and efforts “leading to economic development and jobs in Arkansas.” Part of that is to convert research — valued at $82 million in the most recent fiscal year — into products or processes that may be commercialized.

A few years ago, Fort Smith area officials blew a great chance to land a company (Nanomech/Duralor) that emerged from UA research. Let’s not do that again. In fact, let’s take to the many research universities around the country the message that we in the Fort Smith area want you when you get ready to commercialize research.

There are many communities with great programs that support — financial, leadership support, reduced or streamlined regulation, etc. — small businesses and business start-ups. Maybe a useful activity for this Fort Smith Regional Alliance is to foster the incorporation of those best practices into our regional governance and attitudes.

For many of the same reasons a battery requires a positive and negative charge, we need the positives and negatives in a community. I want to believe we will be positively responsible in our approach to address and work to overcome the valid concerns of those often labeled as negative because they have higher, but reasonable, expectations.