There were a couple of folks asking questions about the hydrological modeling and thus the Geographic Information center was mentioned. Got me thinking Business Analyst could be used in conjuction with Arcview 3D extension to measure the amount/types of businesses and ag land that would be put out of commission with flooding. With employee #'s and sales listed (as inaccurate as they are), I thought there might be data to put through IMPLAN to see what additional indirect and induced costs there might be (as insurance companies typically recompense the 'replacement cost' of structure and inventory, but not of lost commerce).
Dave Nelson mentioned that FSA does have systems to work up the loss of particular crop production; Dave also mentioned that Bill Lazarus had gone to Fargo during some prep meetings and figured EIA would be too messy for U to do. Steve Taff mentioned that the Army Corp is finishing up EIA work to calculate damages independently of FEMA, and that he/Prof. Kent Kovacs have been working on modelling ag plotsin GIS to see financial implications of changing the crop cover per flooding. So, as the weather warms and breakup gets nearer, I expect not only to smell and feel it- but also hear it coming (as ice starts sounding like rice crispees).
]]>The hiring and wage markets up here in the northwest are certainly influenced heavily by local manufacturing. In fact, a person out of high school (with a good quality skill set) can start close to here at $12/hr, which translates into $24K right off with full health benefits at very, very little cost share by the employee. This is a base, and does not count additional income for all the overtime that is available; it also accounts for about eleven months of work once vacation is accounted for. Teachers generally receive just a couple vacation days per year, and though they roughly work nine months a years, there is LOT of behind the scenes 'overtime' type of hours involved. A new certified teacher right out of school with a certificate and bachelors may start at ~$30K around here, yet in this district employees are paying well over $5K as their cost share for a fairly advantageously subsidized health insurance program.
A few years ago while I slept overnight at the only available accommodations -on the floor of a remote village(pop. 90) school- I talked quite a while with a fellow social studies teacher who had just arrived that September out of a bachelors teaching program in Wyoming. When I asked him about teaching job availability back home, he mentioned there was a large shortage. He indicated it was due to market competition for labor, as out of his ENTIRE (teaching) graduating class only he and one other went into teaching if I remember right. The rest got their degrees/certifications and went right into the local oil fields to make much, much more money.... I expect with current Minnesota trained student teachers looking at a stymied job market within the state, many may be looking to start- and finish- teaching careers in North Dakota which would certainly be a switch from decades past. (Or similar to Wyoming a few years back, many teachers may join the several people from this area who have given up local careers for oil patch jobs in the western part of the state)
Schools are vitally important to economic development in rural, small towns as often they are the lion's share of industry/payroll. And so, to bring it home, our local school board is going into contract negotiations with teachers (and several bargaining units this year). I have a feeling from indicators that locally these will be hard line negotiations. With economic tough times staving off many of the enmass Baby Boomer teachers from retiring ....it may just be the school board's thought are along the lines of 'keeping your job is the new raise!' But in this region, with labor shortages in manufacturing it may be that younger teachers take cues as mobile labor agents to 'go back to school', retrain and enter a labor market. Unfortunately, this may decimate the effectiveness of smaller schools considering the type of historical and institutional knowledge needed when working with human capital (kiddos).
]]>After speaking at length with Crookston's Housing and Economic Development Authority, I think that Crookston's local tax abatement (two year) for those building on discounted, plumbed lots fits this category. It is a type of grace, given to attract building on the NE edge of town. New home builders-whether new to Crookston or longstanding residents-choose a candidate lot and are basically get refunded taxes up front two years of taxes (which will be paid back as regular tax payments out of a mortgage escrow for those two years and then beyond). This gives the builder more immediate monies to finance their buildling efforts with. As I understand it, while the city and school district (joint venture) 'forego' tax revenues for a couple years due to the immediate rebate, it is income they would not have had without the building activity as empty city owned lots generate very little- if any- revenue. It is true that the city and district could use the initial two year's of tax revenues for investments or their own operating costs for those couple of initial years if they didn't offer an abatement, as revenues (not profits) are generally comprised of quantity multiplied by price. Yet here, the quantity of new buildiers willing to move forward and the height of value/price to be taxed for years to come may be compromised by not offering abated money immediately (not withstanding the logistics of availability of money/loans and cost/interest). By the design of our state taxation system, the city gets the same overall pool of taxes regardless of how many residents it recruits. Thus the burden decreases for individuals as it gets spread out amongst more payers. There are positive externalities to the albiet small sustained amount of growth that Crookston's abatement lends to. This year three lots qualify.
The school district doesn't incur any direct fiscal costs by being a part of this incentive. And while this incentive drops the price/tax for individual residents in Crookston, those living outside of the city yet inside the district stand to gain from this in that any additional students enrolled (up to certain operational break points) will reduce the cost of education per pupil by the adding many thousands of dollars to the district's coffers through state funding). NOT being a public finance guy, nor fully understanding the housing market, it seems that on the surface this is one of those infrequent situations where though certain individuals of the community (school district) may recieve a larger benefit than others, the societal benefit is greater than the social costs incurred by this municipal policy. We tolerate similar (though not exactly the same) leveraging of individual gain versus the gain of the whole when we participate in insurance pools. There's been the idea voiced that this incentive denies full benefits by some who live in the school district, yet outside the city limits where the incentive is offered. Yet by default, attraction policies are created to redistribute residents/goods/services with the understanding that people are free agents to be competed for in the free market of 'residency'. In a general sense, businesses and communities sense that. And while there may be negative externalities that were unexpected, they know that at certain levels growth often brings benefits due to larger economies of scale. Since enacting this incentive, the city has marketabley grown with new homes, and there are plenty of older used homes on the market as well (which still have taxes paid on them). In some policy cases the whole community can be a winner- though some individuals winning more than others.
]]>More than half of mobile web users go online from their phones on a daily basis
In addition to being a growing proportion of the overall cell phone population, users of the mobile web now go online more frequently using their handheld devices than they did as recently as last year. More than half of all mobile internet users go online from their handheld devices on a daily basis--43% do so several times a day, and 12% do so about once a day. At a similar point in 2009, just 24% of mobile internet users went online several times a day.
Hopefully this data from Pew and Nielsen make the case that it is important for businesses and organizations to connect with people on the go on through their handheld device or smartphone. At minimum this means that if you have a regular website then you should also start thinking about having a mobile version of you website developed. And while you are at it make sure people using a variety of location based services on their iphones or android phones can find your businesses. Examples include: Yelp, Google Maps, Urbanspoon, and many more.
For a very visual presentation on all of this click here
And for the best help contact one of you local Extension community economic educators
]]>Now, the second ranked firm in terms of sales volume was in itself not surprising-Marvin Windows; yet Marvin's was not classified by Infogroup as manufacturing, but rather as a building material dealer. Under 444 series NAICS. Incidentally, this firm was the only one in the top five ranked for the most employees which was not coded as a manufacturer. While the company has a home center for local customers at their main factory, there is no doubt to anyone up here that the bulk of the firm's activity at that location is the manufacturing doors and windows from raw materials to finished product. Concerning the number of employees, the next several ranking firms were made up of a Wal-Mart, a single school district, several health care facilities, and several Native owned casinos.
The lesson confirmed is familiar- assigned NAICs from Infogroup may describe a secondary activity, and while being close it may miss designating the main function of a firm. This is not to knock the company compiling the data, but just a reminder that local knowledge of a firm is yet helpful in accurately organizing output information.
There have been a couple of individuals in northwest MN now who have contacted their local EDA (who has recieved a Market Area Profile from Extension) and subsequently given me a call for industry specific information to possibly open businesses (such as used car lots, bakeries, wood stoves and now car washes). While there are online clearing houses such as firstresearch.com, marketresearch.com, or datareports.net most of the info is national with possibly statewide attention. Trade association newsletters can help, but often are regional in nature (i.e. Heartland Carwash Association out of Iowa). If you have any ideas of trends/data to capture within a rural county a particular NAICS like car washes, please post references to them in the comments on this blog as any bit will help and can be forwarded by email to these interested entrepreneurs!
]]>It is to shape up in detail and will offer helps to those who start businesses, get them off the ground, and often move onto other ventures to launch. Word has gotten to the UMC EDA center of requests, yet Jack Geller has referred such assistance requests from individual businesses just down the hall in the Business Dept. at UMC.
]]>Luckily, 2007 Economic Census results were released this summer and provide a great view into the changing consumption patterns of the american public and the relative importance of american industries. You can access a quick look into the economic census results through their "Industry Snapshots":
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How has the per capita spending on used cars changed from 2002 to 2007? Are there more newsstands in 2007 than 2002? The answer is "no." Hopefully this goes beyond simple trivia about different industries, but instead becomes a quick resource we can share with those private businesses looking for some basic benchmarks or community members looking for some basic information on what's viable in their community. We'd rather our businesses and communities not invest in today's equivalent of a buggy whip plant, but those industries and store formats which will remain a viable part of today's economy.
]]>A small operating turbine can be seen as you pull up to the south side of the school as part of the project is to make the building "green" itself. It is now utilizing geothermal heating, and another UM person from the Clean Energy Resource Team walked through to see attempts to make it more energy efficient. Oil usage has been 28,000 gallons per year, which with the current price of $3.21/gal for #1 grade and $2.89/gal for #2 grade, you can figure it would take around $80K a year to currently heat. Pretty expensive for heating alone. Geothermal pumps will pull Kilowatt hours of electricity, yet depending on the system may cut costs by quite a bit. Some defunct schools within 100 miles of Crookston around here have brought in businesses such as assisted living halls, quick-stores, cafes, post offices, city halls, police stations, etc... Economic Develpment can be a recycling of past infrastructure to grow future oriented businesses!
]]>So it's been seventy years since the first electrical infrastructure installation in your County. Sixty years since the first telephone install. Thirty years since the cable tv was brought to the doorstep. Have you ever wondered what it would be like to try and install a similar, ubiquitous infrastructure in today's economy? Take a look at the economic impact of installing fiber-optic service to every home, farm, and business entity in Progresstown.
This Economic Impact Analysis focuses on the installation and operation of a technology utility. The utility delivers the "big three" to the front door including telephone, television, and internet. The labor requirement for excavation and construction of the lines are captured. The expenditures for lines, buildings, computers, and vehicle are captured. The daily operations of the IT services over its forty year life expectancy are captured.
On-the-other-hand Economic Impact Analysis is not the appropriate analytical tool for measuring the net impact or change in operations for the business, household, or farm. These collateral benefits are definite and significant yet incalculable in the IMPLAN model. The local business will expand the customer base online. The local farmer will make direct market contacts with the grain exchange on an hourly or minute-to-minute. Good stuff, just not part of the economic impact formula.
When a community is seeking information to make an informed economic development decision; the economic impact of the venture is second only to the feasibility study in terms of managing expectations and prudently caring for public resources.
In a 2010 study conducted by University of Minnesota Extension examining the economic impact of a proposed new Fiber-To-The-Home (FTTH) infrastructure to business and residence in Progresstown County, Minnesota it was found that:
• Output in the local economy is predicted to increase by $4,501,629 annually due to the daily operation of the facility/infrastructure.
• Employment in the study area is predicted to increase by 13 full and part time jobs annually due to the daily operation of the facility.
• Labor income in the local economy is predicted to increase by $600,099 annually due to the daily operation of the facility.
• The Telecommunications industry, the Service & Repair of non-residential industry, and the Food Service and Drinking industry will be the industries most significantly impacted due to the operation of the facility.
• Output in the local economy is expected to increase by $25,760,910 for two consecutive years due to construction of the facility/infrastructure.
• Employment in the study area is expected to increase by 288 full and part time jobs for one-two years due to construction of the facility.
• Labor income in the local economy is expected to increase by $10,633,119 for two years due to construction of the facility.
McElroy joined Governor Pawlenty's leadership team in 2003 as commissioner of finance and later served as the governor's chief of staff before becoming the Governor's senior adviser on innovation in 2005. He has been the DEED Commissioner since 2007.
McElroy has been interested in many of the offerings of Extension's Community Economics team. There were several occasions when I would run into him at events and he would ask how certain projects were progressing because his staff filled him in on projects that included his staff and Extension. My hope is that our relationship with him can stay strong since Extension offers tourism development programs.
]]>For example, if the hospital increases wages by $2 million, what is the economic impact in the community? This is all driven off labor income, not jobs or output. Those do not change in this scenario.
The question is, what is the direct effect in IMPLAN? How does IMPLAN treat a labor income change? For example, what about in-commuters? They drive in to work and take their salary home. Do I have to adjust the labor income change for them? Or what about taxes? Does IMPLAN account for a percent that goes to taxes or do I have to adjust labor income for those too?
Here's what I learned:
"Leakages from labor income include payments to social insurance (social security, medicare, unemployment contributions paid by both the employee and the employer) and incommuters, the remainder go to local households. Leakages from household spending include income taxes, savings and imported goods and services. The remainder is purchase of local goods and services and is significantly smaller than the original labor income value.
Also, this first round of local spending is "output", the labor income required to produce this new demand is even smaller.
Remember that retail industry purchases are margined, so only the gross margin is guaranteed to be local, the producer value may or may not be from a local manufacturer." - Posted to IMPLAN user's forum by Doug Olson
My interpretation: IMPLAN accounts for leakages to non-local suppliers and to in-commuters.
It raised a second question for me - how do they calculate the percent going to in-commuters. I found this on the forum (also from Doug):
"Currently commuting flows are based on the REIS residence adjustment, adjusted by national "alien" workforce ratios. These values are net values. The current MRIO only internalizes the interregional industry purchases. We are working to introduce the commuting to the Multi-region model"