Economist sees bad things ahead for county
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“You are going to get hurt when Carrier closes,” said Fruth. “There’s no way around it. The county will lose around 1,000 high-paying manufacturing jobs and you are going to continue to decline in your economy until at least 2008. If you can somehow flatline from now until 2008, I would consider that a good thing.”
Fruth made those remarks Wednesday during an economic development seminar at McMinnville Civic Center.
Fruth, who has evaluated over 600 local economies in the United States, was hired by Warren County’s Industrial Development Board to assess the economic outlook here and make suggestions on how to improve it. His fee is $48,000.
Fruth had some glowing remarks about the economic feast the county enjoyed in the 1990s when an abundance of high-paying jobs were created here. From 1993 to 2002, Warren County ranked sixth in the nation out of 573 micropolitan areas our size for the annual wages of our new jobs.
But the future, Fruth says, isn’t so bright. According to his assessment, we are replacing good-paying manufacturing jobs with meager-paying retail and service jobs and it’s far from an even trade.
“The long-term prognosis for Warren County is that you’ll become a low-wage economy,” said Fruth, who recommended the county take an aggressive approach to altering this course. “How do I know this? It’s because this is what’s happened over the last 15 years to every rural economy that’s not located next to an interstate.”
Fruth emphasized that the quality of a local economy is not measured by the number of jobs available. He says it’s a myth that any job created is a good job.
It’s for that reason Fruth says a community would be better served to create 100 jobs that pay $13 a hour than to create 200 jobs that pay $7 a hour.
“I view the quality of an economy based on what people earn and I don’t make excuses for that,” said Fruth. “Money buys better homes, better clothes, better food, better healthcare, a better education and more recreational opportunities. It’s good-paying jobs that improve the quality of life.”
While nothing can be done to change Carrier’s decision to leave, there are a number of steps the county can take to minimize the damage. And at the top of that list is catering to the companies that are currently operating in this county.
“An existing industry program is the most important thing a community can do,” said Fruth. “The fact someone didn’t leave your community is just as important as someone moving in, and you’re about to feel that.”
In addition to taking better care of our existing industries to make them feel appreciated, recruiting new industry is vital. It’s also difficult.
The chances of landing a big-time employer are slim. According to Fruth, an average of only one 2,000-person company locates in this country a year.
“A recruitment program is a long-term, frustrating process,” said Fruth.
In the highly competitive battle to land major manufacturers, incentives often put one community above another. Popular incentives include: tax breaks, low-interest loans, and grants for employee training.
It was Fruth’s second trip to McMinnville. He is scheduled to return in about six weeks for a two-day stay where he will meet with county leadership groups individually.
Economic glimpse
How Warren County ranked among the 573 micropolitan areas in the United States from 1993 to 2002:
Category Rank
Population 128
Employment 365
Wages for new jobs created 6
Overall earnings 106
Leaving town
Even if Warren County can rebound and add new jobs immediately, economist Bill Fruth says the best-case scenario is for the county to lose 100 primary jobs in 2005 and 2006, largely due to Carrier’s departure. Those jobs pay an average wage of over $46,000 a year. That’s part of projections that indicate the local economy will decline over the next five years.