Kokomo Tribune; Kokomo, Indiana

Opinion

December 5, 2013

HICKS: Vibrant towns make a difference, not factories

Thanksgiving weekend saw most of us huddled with three or more generations of family. That makes these holidays a good time to think about long-term economic changes and how they affect us. For example, let’s think a bit about where economic development occurs. Let us begin by picking two dates 70 years apart, say 1940 and 2010.

In 1940 about one-third of all U.S. workers were involved in manufacturing, another 15 percent in agriculture, 5 percent in providing energy and more than 10 percent in moving goods. Altogether, about 65 percent of folks worked in industries in which most of the goods produced were “exported” to places outside of where they lived. This was a less affluent time, and much of household income was spent on food, clothing and heat. Not surprisingly, by 1940, cities had sprung up around the places where people manufactured goods, mined coal or loaded goods, coal and food products onto transportation equipment. So, the great centers of affluence were clustered around factories.

Now take into account that over the coming seven decades households got richer. This is because we got better at food production, mining, manufacturing and moving all that stuff around. This brought about two major changes. First, instead of 65 out of every 100 workers mining, growing, making and moving goods, now fewer than 14 could meet demand. Second, as households got richer, they bought fewer things that could be exported from the region and spent more money on things that could not be readily moved around. So, health care, financial services, restaurant visits, amusements and recreation, telecom services and housing became a growing share of our spending patterns. Manufactured goods and food spending shrank as our share of income. So what does this mean to the geography of wealth and affluence?

Well, in 1940 the only vibrant cities had big factories, rail yards and lots of associated workers. In 2010 the only vibrant cities had lots of people in many occupations whose product is mostly consumed locally. This doesn’t mean there aren’t a few fantastic towns with factories, but it is the vibrant town that ultimately makes the difference.

This begs the question, “If this is so, why is our community so dead-set on luring the next factory to town instead of making our town a good place to live?” The answer here is simply that too many folks simply don’t know what else to do.

I believe we still need to attract business at the state, and maybe the regional level. A new factory anywhere in Indiana will draw workers from a dozen counties. Still, the simple truth is that for Hoosier counties, efforts to lure a new factory in hopes it will spur economic growth is like filling the bath tub during a house fire. It involves something that seems like it might be able to put out the fire, and it keeps you busy; but it won’t make much of a difference in the long run.

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and a professor of economics in the Miller College of Business at Ball State University.

1
Text Only | Photo Reprints
Opinion
  • Treasure the life you have I was asked by a reader what my thought on what life is for me in my late years. So here I go with some of my thoughts, but don’t think I am just making them up as I go. Life to me is the time between the day I was born and the day that I am called h

    August 23, 2014

  • Cheers and Jeers Taste of Kokomo accommodationSusie and Andy Castner send this Cheer:“A cheer to Randy Morris, City of Kokomo Park Supt. for accommodating our family for the David Cook concert at Taste of Kokomo. It made it so much easier for our mom to get to seatin

    August 23, 2014

  • State challengesfederal government Recently, some have questioned why the State of Indiana has brought lawsuits against our federal government. While this litigation is adversarial by nature, it is a necessary part of our constitutional process. What distinguishes the U.S. Constitutio

    August 23, 2014

  • Aug. 23: Letters to the Editor Paying for lack of leadershipThe salaries of the Board of County Commissioners and the complete funding of the Local Economic Development Organization, is from taxes paid by the residents of Tipton County. The actions of these two entities are unacce

    August 23, 2014

  • Smoking ordinance misguided As a subscriber to the printed edition of the Kokomo Tribune, and a non-smoker, I was very interested upon seeing a page one article in the Aug. 13 edition titled “City-wide ban on smoking revealed.” After reading the article, my interest was peaked

    August 22, 2014

  • Why government openness matters Failing to share information makes us weaker. It enfeebles congressional oversight, which is a cornerstone of representative democracy and which, when aggressively carried out by fully informed legislators, can strengthen policy-making. One of the fu

    August 22, 2014

  • Aug. 22: Letters to the Editor Rokita wrong on GMOsThe Aug. 13 Tribune article about Rokita’s “Town Hall Meeting” left out a key issue — Rokita’s co-sponsorship of HR4432. This bill would ban mandatory labeling of currently genetically modified foods and prohibit any state from en

    August 22, 2014

  • Use the law to save lives As college students head back to campus, it’s a good time to remind them of the Indiana Lifeline Law.When the General Assembly passed the law two years ago, the goal was to encourage minors to call for help by giving them immunity from being prosecut

    August 22, 2014

  • It's time to deal with crisis For five and a half years, the president has gone around Congress to ignore, defy and alter laws in a variety of areas, from Obamacare implementation to issuing excessive new labor and environmental rules to infringing on religious freedom. It is no

    August 21, 2014

  • Nation must be united On Aug. 9, unarmed 18-year-old Michael Brown was shot at least six times, including twice in the head, by a police officer. Since that time, protestors and unrest have filled the streets of Ferguson, Missouri, a town near St. Louis.A similar scenario

    August 21, 2014

Featured Ads
Only on our website
AP Video
Furry Roommates: Dorms Allowing Cats and Dogs Chase Rice Defends Bro-Country 'Jersey Shore Massacre' Pokes Fun at MTV Series Raw: Wash. Mudslides Close Roads, Trap Motorists DC's Godfather of Go-Go Honored Ukraine Calls Russian Convoy a 'direct Invasion' Girl Meets Her 'one in the World' Match Coal Gas Boom in China Holds Climate Risks Japan Landslide Rescuers Struggle in Heavy Rain Raw: Severe Floods, Fire Wrecks Indiana Homes Endangered Red Wolves Face Uncertain Future Raw: Russian Aid Convoy Arrives in Ukraine Okla. Policeman Accused of Sex Assaults on Duty Dominican Republic Bans Miley Cyrus Concert Raw: Israeli Air Strike in Gaza Raw: Bodies of MH17 Victims Arrive in Malaysia Attorney: Utah Eatery Had Other Chemical Burn
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Obituaries
Poll