In this mayoral campaign there has been talk of the local economy. The Mayor says it’s fine and improving and I say it’s stagnant and in need of improvement. I’ll take this opportunity to show you how I came to my conclusion and you can decide for yourself.
First, let’s look at total gross sales in the Black Hills region, by industry sector:
As you can see, most major sectors progress well until 2008, when there is a downward trend, the most obvious of which is in the manufacturing sector. In 2006 and 2007, manufacturing saw its best years in local history topping at $1.49 billion and $1.54 billion respectively. 2008 fell to $928.6 million followed by $310.6 million in 2009. Since then, manufacturing sales have hovered around the $300 million mark.
Next, we see total gross sales growth for South Dakota, compared to the Black Hills region:
South Dakota’s gross sales are growing steadily, while the Black Hills sales are flat. Even with low unemployment and high retail sales, being satisfied with lower paying retail and hospitality jobs is a bit short-sighted when considering the complexity of all the working parts of the economy and especially with the variable component of tourism. Between 2007 and 2010 the black hills lost over 800 manufacturing jobs. Higher paying jobs, or the lack of them, is a major issue for Rapid City. We cannot expect a thriving, growing economic condition if everyone is making 9.00 per hour or less. The below chart shows Black Hills incomes falling behind the rest of the state:
Manufacturing jobs traditionally pay better than retail jobs. More income = more discretionary income = more spending on homes and durable goods and a better economy in general.
Rapid City has high housing costs and 32.8% of its households pay more than 30% of their income to housing. The below chart demonstrates that on average, 24% of South Dakota households experience this housing cost burden:
During this campaign, my comments about the economy have been centered on manufacturing sales, mostly since 2009. I have referred to Rapid City’s economy as flat compared to the State’s economy, which I believe the data here supports.
I believe the local economy must be measured by many criteria such as unemployment and underemployment, median income level, cost of living, retail sales, output of each of the major economic sectors and city sales tax receipts and building permits. The building permits must be broken down to reflect of the $200 million, what of the total are government initiated projects and what are housing and commercial projects.
Something I cannot chart, is the affect individuals with multiple jobs have on families and community. If one or more parents have more than one job, especially full time jobs, the parent-child contact is reduced, the quality of life experienced is reduced, exhaustion and despair become issues and we may not experience any consequences of this for generations.
To summarize my analysis of the economy – It is not as stable as one might believe when a politician only uses building permits and sales tax data to reassure us that everything is good. I am not satisfied that we have done all we should be doing. I intend to be involved in finding the areas where improvement is needed and to work with others to make that improvement. Our economic health depends on it.