Recent numbers reflect well on the Fort Smith metro economy, but there remains a four-letter word that makes unpleasant a more in-depth conversation: Jobs.
Positive economic headlines have been frequent with sales tax revenue for the city of Fort Smith, building permits in Fort Smith Greenwood and Van Buren, and home sales in Crawford and Sebastian counties.
Fort Smith issued building permits valued at $77.387 million in the January-May period, up 13.87% compared to the $67.959 million during the same period in 2014.
Home sales in the two counties totaled 597 in the January-April period, better than the 556 in the same period of 2014 and well ahead of the 479 in the same period of 2013.
For the first five reporting months of the year, Fort Smith’s portion of the countywide tax revenue is $6.73 million, up 6% compared to the same period in 2014. The revenue for the first five months is also 6.34% above the budget estimate. Revenue received above what was projected totals $401,175. The city’s portion of the countywide 1% sales tax generated $1.297 million in the May 2015 report, up 12.71% compared to May 2014, and up 13.22% over the budget estimate.
Fort Smith Administrator Ray Gosack said in a recent Times Record report that the sales tax revenue trend indicates that the “effects of the recession are over. … We were somewhat slow going into the recession and we were slow coming out of the recession. We’ve got sustained and significant growth in sales tax revenue now.”
Not so fast.
Let’s say a regional economy is a house. Sales tax revenue, building permits, and home sales are the walls. The foundation is jobs. The more diverse the job base – to include a wide range of wages – the better the foundation. One may build impressive walls on a weak foundation, but the walls eventually crack and buckle if foundation troubles remain or worsen.
Jobs are definitely a problem for the Fort Smith metro.
The number of employed in the Fort Smith region totaled 114,596 in May, up 3,217 jobs compared to the 111,379 employed in May 2014. However, the number of employed in the metro area is down 8.6% compared to the revised high of 125,426 in June 2006 – or 10,830 fewer jobs than the peak metro employment. That the Fort Smith metro economy has more than 10,000 fewer jobs than when the Great Recession began posits a tough argument to any belief that effects of a recession are over.
What’s more, the Fort Smith metro is the only one of Arkansas’ four large markets to have fewer jobs than prior to the recession.
The Northwest Arkansas economy hit a low of 205,099 jobs in January 2010, but in May was home to 238,730 jobs – a new record for the dynamic region. Jobs in the central Arkansas market had ups and downs between December 2007 and 2014. The region hit a low of 309,476 jobs in January 2014, but has improved to 330,609 in April. That level also set a record for the metro area. The Jonesboro area had 58,951 jobs in April, up more than 5,000 jobs since December 2007. That’s impressive growth of almost 10%.
Fort Smith’s metro area has struggled since 2007 to maintain a positive job growth trend. The metro area began to see growth in early 2012, and rose to more than 116,000 in June 2012. But
the job level fell back to 108,256 in January 2014. The most recent trend has the number of jobs up to 114,596 as of May.
It’s possible that the Fort Smith area’s dependence on manufacturing jobs is a big reason it is one of the few metro areas in the country with a jobs level that has not recovered from the recession. We’ll leave that assessment to economic historians.
Kind Reader should know that this essay does not offer a solution, and that there is likely no single solution. Maybe regional leaders work together to do more on entrepreneurial support. Northwest Arkansas and central Arkansas are working together – and with success – on that front. Maybe cities and counties in the region invest in a nationwide/global public relations campaign. It could be that we camp out at the front door of Wal-Mart Inc. in Bentonville until they consider a plan to incorporate Whirlpool’s Fort Smith plant and other vacant former manufacturing sites in the region into the retailer’s push to return manufacturing jobs to the U.S.
Area leaders have in recent years spent time and money on waterparks, comprehensive plans, museums, statues, trails, sewer systems, jails, new fire and police stations, Chaffee Crossing infrastructure and Interstate 49. Most of those things deserved the time and money. But the job numbers show that traditional economic development activities and amenity development are not enough.
As of May, there were more than 10,000 “effects” of the recession; more than 10,000 reasons the region might benefit from a broad and innovative plan to pull our collective heads out of our jobs hole.