The Memphis region was in the last group of cities to recover from the impact of the Great Recession – returning to the 2007 levels in key economic indicators in the last quarter of last year.
In other words, it took almost a decade for our region to get its equilibrium back after the recession killed 50,000 jobs, decimated African American wealth, and left GDP and income growth lagging behind cities that we once considered our peers.
That should be wake-up call enough to motivate the various committees considering the path to a more successful economy to aim high, act boldly, and set ambitious goals.
Unfortunately, so far, while the work is well-meaning, none of the proposals will be the kind of disruptive innovation that is needed for Memphis and Shelby County to compete for better-paying jobs in today’s highly competitive economy, particularly those in the knowledge economy and technology fields.
It’s Not About Who’s In Charge
So far, its purpose appears to be primarily about tweaking the Economic Development Growth Engine (EDGE) and its relationships with the Greater Memphis Chamber. It’s a mistake since it’s anchored in the misguided notion that EDGE and the economic development ecosystem are one and the same.
Rather, EDGE is a cog in an economic development apparatus that too often plays out in various siloes all over Shelby County and that lack a shared blueprint for action and a scorecard for determining how we’re doing.
While everyone seems to be obsessed with EDGE and its incentives resulting in decades of major corporations not paying their fair share of taxes, other organizations are collectively waiving the same amount as EDGE but with little oversight by local government.
The present debate seems to be about who’s in charge, when in truth, for economic development to work, everyone is in charge. It’s not about competition; it’s about collaboration.
What often seems to be missing in Memphis and Shelby County on issues like this one is an independent, impartial umbrella organization that can convene diverse groups in a candid analysis of where we are and where we need to go to be successful in the future. It would be good if an institution with resources and expertise like the University of Memphis could perform this role, but it is regularly overlooked as even a participate in these kinds of processes.
Better Late Than Ever
Here’s the thing: tweaking around the edges of EDGE to improve our economic development results or to set up a new reporting relationship gives the appearance of making progress when it is unlikely to make a real difference. At best, it will produce progress that is incremental rather than the leap forward that is required.
Many of the core issues being discussed are worthy. They just need to be amped up to supercharge an economy instead of continuing to act like any job is a good job or that the jobs we have – with about half of them paying less than $15 an hour – are “good enough for Memphians.”
The most encouraging development in all of this discussion about economic development is that finally – better late than never – there is general consensus that our economy is not firing on all cylinders, that our city and county are underachieving, and that the future of Memphis cannot simply be an extension of the present. In the place of the cheerleading we received in the wake of the recession, we at last have had a blast of honesty in the appraisal of our economy.
We have been posting data points since the Great Recession to make the case that our economy was languishing, but finally, there is a broad-based consensus that we have to do better. And, equally important, that we can do better.
We are concerned that while EDGE is being put under the magnifying glass, so far, its flawed methodologies for determining the public benefits from the PILOT program have avoided the serious examination they need. As we have pointed out for several years, the rose-colored glasses used for its analyses skew the results through incomplete equations and slanted formulas.
The problem with the analyses is not just that it’s more about PR than public accountability, but it has had the effect of lulling everyone to sleep and into thinking that we are actually making progress when we are essentially running in place.
The Economic Innovation Group ranks Memphis as the ninth most distressed city in the U.S. with 67.5% of its residents living in distressed zip codes based on poverty rate, housing vacancies, adults not working, median income ratio, change in employment, and change in business establishments.
As we wrote last week, demonstrating an impatience with the way things are is the first step on a path toward a better economic future. Hopefully, that, more than anything, is what the current discussions and deliberations about economic development can deliver.
Net Jobs Loss
As an indication of how important this is, consider the fact that between 2007 and 2016, the only county in the Memphis MSA that recorded a net plus in jobs was DeSoto County. Here are the numbers for that time period:
* Shelby County lost 1,435 businesses – from 20,898 to 19,463
* DeSoto County gained 265 businesses – from 2,549 to 2,814
* Tipton County lost 111 businesses – from 810 to 699
* Fayette County lost 45 businesses – from 623 to 578
* Crittenden County lost 96 businesses – from 921 to 825
* Tate County lost 36 businesses – from 414 to 378
* Tunica County lost 19 businesses – from 223 to 204
* Marshall County lost 50 businesses – from 464 to 414
* St. Francis County lost 90 businesses – from 525 to 435
It’s but one more indicator for why we must turn around the economy, and it begins with everyone involved in the present discussions serving notice now that they are not willing to accept incremental change when the present trend lines foretell a race to the bottom if they do.
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