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Economic Development is . . . (increasing the flow) of capital through the community and reducing its leakage.

Reality Check

Reaching the end of a job interview, the Human Resources Officer asks a young engineer fresh out of the Massachusetts Institute of Technology, “And what starting salary are you looking for?” The engineer replies, “In the region of $125,000 a year, depending on the benefits package.” The interviewer inquires, “Well, what would you say to a package of five weeks vacation, 14 paid holidays, full medical and dental, company matching retirement fund to 50% of salary, and a company car leased every two years, say, a red Corvette?” The engineer sits up straight and says, “Wow! Are you kidding?” The interviewer replies, “Yeah, but you started it.”

 

Alright Heath, what do stories of naive young graduates have to do with our economy? Nothing, other than the joke runs very close to reality these days, and I simply liked the joke. On to economic development – I have again been hearing people suggesting “Heath we need (fill in the blank) in town or we need (fill in the blank) – why don’t you get on that.”

 

There is an old adage that says, “A fine appearance is a poor substitute for inward worth”.  In terms of economic growth, “true” economic growth is not the external things we see on the street (at least not at the start). We must dig to the root of economic growth. Everyone that looks at empty buildings downtown quickly reasons: “We need to simply bring in more businesses to fill all the empty buildings”. Full buildings will indeed look great and everyone will feel great, but the bottom line – if we invest in things that only make us feel good but do not solve the true problem, then our fate is bleak.

 

We need to dig deeper and ask the right question. Why did the businesses shut down in the first place? The economic law of supply and demand tells us that they are closed because of a lack of customers buying the products or services provided. The answer to solving our declining downtowns is to create JOBS that create PAYCHECKS for the residents of our county that LIVE HERE. It is the paychecks that will, in turn, enable people to become the all-important customers that will shop at the retail stores we have (and the additional shops that will come).

 

So how do we create more paychecks for people that LIVE HERE? At the most basic level it is done by people stepping out and starting businesses – or growing their existing businesses. They grow that business – and employ people to service the customers – creating paychecks. Paychecks for people that LIVE HERE = full buildings downtown.

 

The bottom line is if we invest our time and effort in the appearance that makes us feel good but doesn’t create real commerce, then our fate is hopeless; but if we take the time to grow paychecks for the people that LIVE HERE, Tama County will not only look good but it will actually be a prosperous place to live.

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