It’s All About The Jobs
In the course of spending 9 months studying the in’s and out’s of the city’s budget shortfall, it’s apparent that it’s really “all about the jobs” (or lack thereof). Our financial problems are not about over-spending or wasteful spending, they are fundamentally a sypmtom of job loss in Kent that has occurred over the last couple of decades.
With 90% of the city’s tax revenue coming from income taxes, jobs drive the economic bus for the city. In the days when good paying manufacturing jobs were prevalent in Kent – think Ametech, Gougler, — the city had a reliable revenue stream that kept the bus running on all cylinders. Today, the bus still runs the same route but the bus is older and needs more maintenance, gas is more expensive, the driver makes more money, and yet there are fewer paying passengers and those that still ride pay a lot less for the same trip. It’s tough to run a bus company (or a city) with these factors.
I did a little research to see if I could understand the numbers behind these factors and I found that the census bureau tracks payroll per job – which should get to the heart of our problem in Kent. Here’s what I found as summarized at the county level (Kent is in Portage County).
In 1994, the county data looked like this:
Trumbull County Payroll Per Job = $29,232
Cuyahoga County Payroll Per Job = $28,293
Summit County Payroll Per Job = $25,922
State of Ohio Payroll Per Job = $25,216
Stark County Payroll Per Job = $23,194
Portage County Payroll Per Job = $21,687
In 2004, the county data looks like this:
Cuyahoga County Payroll Per Job = $39,199
Summit County Payroll Per Job = $34,794
State of Ohio Payroll Per Job = $34,135
Trumbull County Payroll Per Job = $33,376
Portage County Payroll Per Job = $30,548
Stark County Payroll Per Job = $30,257
As the biggest city in Portage County, the fact that Portage is near the bottom in payroll per job is not a healthy indicator for Kent’s economy. I guess on the good side the gap between Portage County and the leading county has narrowed by about 7% points, but we’re still on the wrong side of the balance sheet which has obvious implications for our income tax receipts.
The saving grace for the city has been the steady contributions of our largest employer, Kent State University. In all of Ohio, there are only 280 employers that have 1,000 employees or more, and we’ve got a big one in Kent State with its 3,500 employees all of whom contribute city income taxes.
Interestingly, when you look at the total number of jobs in Kent (again as recorded by the census bureau) the number of jobs has increased – albeit at a slow rate.
1970 = 11,210 jobs
1980 = 12,543 jobs
1990 = 14,950 jobs
2000 = 16,557 jobs
The trouble is, the amount of money being paid for those jobs is low by comparison:
Stow $ 65,989
Tallmadge $ 57,864
Streetsboro $ 52,477
Cuyahoga Falls $ 50,853
Wooster $ 50,406
Akron $ 42,565
Ravenna $ 42,120
Alliance $ 39,222
Kent $ 39,192
Bowling Green $ 37,498
Oxford $ 34,658
Athens $ 29,629
Look at another way, in 2004 the average manufacturing job paid $40,000 a year while a retail/service job paid an average of $15,000 a year. So while Kent’s total number of jobs may have edged upward, the dollar value of those jobs has markedly dropped.
There’s no news flash in the data, this really just confirms what we already knew. The challenge then is how to pull in new jobs that are high paying so that we can start to reverse the trend and get Kent back on track.