Local Government Must Learn the True Definition of Economic Development
Everyone knows the quote “If you give a man a fish you feed him for a day. If you teach a man to fish you feed him for a lifetime,” but some of our leaders fail to grasp the meaning! If you do grasp that as the meaning, how can you as a leader, brag about economic development and use as an example the latest fast food or basic retail chain store opening in your town? I am not saying that those are not providing a couple of jobs to our laborers or the 1 or 2 managers of the store, but how about we start focusing on providing careers?
When I received my Certified Commercial Investment Member (CCIM) for commercial real estate we had an entire week dedicated to determining the difference between basic and non-basic employment jobs and where and what they meant to a local economy. Without getting into the boring details, these methods derived all the way back to a German sociologist in 1916.
Basic employment is activities that produce more goods and services than can be consumed in that local area. Creating basic employment has a ripple effect, creating other basic and even non-basic jobs. Think about what effect BP, Mittal Steel, and even the Horseshoe Casino have on our economy. When the entire world was going through a depression the past few years, we had BP expanding their plant. Instead of vacancy rates falling in Hammond, East Chicago, and parts of Gary with businesses closing, we had companies from as far as Sweden occupying them. Those companies were supplied by our local vendors for product, fed by our local restaurants and housed by our local hotels.
Don’t call the newest fast food restaurant or new clothing store economic development! I actually heard a political leader call a 2,000 square foot fast food franchise chain that was opening soon economic development, and I almost threw up in my mouth. It may sound good to some of your citizens, but for those that know any better this is non-basic employment. It circulates your own constituent’s money around but a lot of it leaves the area. Some of these do provide good paying jobs, but very few provide careers. The ones that do provide careers are usually only the ones run by our local business people. These jobs produce goods and services for the local economy for our consumption.
New retail stores help elevate the quality of life in an area, but without providing basic employment what type of life is that?