Thursday, July 12, 2007

Buying Jobs

Economic development is back in the news. There are actually two stories here. First, we have the same old story where we use "incentives" (i.e. tax money) trying to snare jobs from corporate herds that might pass our way. This type of economic hunting (where we try to steal jobs from other communities) is seldom very effective. The good news is that call centers have been successful here, so there is a strong likelihood that these jobs might outlast the incentive payments.

The second story is really more important. We now have a loan program, the Grow San Angelo Fund, targeted to small but growing businesses. We are talking about companies that have survived the initial start up pains and are ready to take on the pain of additional growth. These companies, often called gazelles, are where the real economic growth (somewhere around 70% of job creation) occurs. This section of our local economy is frequently overlooked and has historically been poorly served.

In my last post on ED, I talked about economic gardening. This fund, if used properly, can grow our own local economic garden. We must use it as fertilizer. We can grow the vast majority of the good jobs we want and need.

1 comment:

  1. On the gosanangelo site, JWT properly corrects me. I had pointed out that very few of the jobs would meet the 110% of median city wage, or about $31,250, only management gets that or more. I accused them of sloppy math, or of hoping the voting "mushrooms" (keep'em in the dark and feed them manure) didn't do the math.

    Well, by COSADC/Council rules, they don't have to pretend the line worker makes median wage, only the "average" payroll must. The shift in terms from "median" to "average" is crucial. Median would mean half of jobs above, half below. Average is total payroll divided by jobs.

    Result is very few employees will receive the $31K, but a few of those will be way higher, yielding a workforce clustered closer to $20K than 30, but still yielding a $32k average.

    Then we have this from the S-T article Thursday: "Lewis said he is optimistic...citing particularly the company's desire to make the incentive public at this stage in the process". I don't know if Lewis plays poker, but Matt, do you usually show your hold cards in Texas Hold'em before the betting starts? San Angelo just has. "At this stage in the process" means a stage at which we don't even know who the other players are, the company has made not a dime's worth of committment, and we have made a public offer in this auction. First American gets a baseline offer to leverage the competing cities with, and we get to be the fall-back-if-nobody-tops-it offer. Great stategery there.