Thursday, July 24, 2014

More troubling news about the Kansas City region's economy

Posted By on Thu, Jul 24, 2014 at 11:05 AM

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During the Middle of the Map Fest earlier this year, event organizers planned a forum to discuss the prospect of whether Kansas City might become the next Austin, Texas.

The panel included reliable city boosters, such as Kansas City Mayor Sly James and interim Kansas City Convention and Visitors Association CEO Jon Stephens, to discuss whether Kansas City could match the Texas capital's well-known cultural vibrancy.

Intangibles aside, Kansas City is a long shot from matching Austin's thriving economy. In fact, more reports suggest that the Kansas City region lags behind several national averages and peer cities in economic factors like job growth, wages and production — indicators of a city's buoyancy and its landscape for opportunity.

Kansas City Star editorial board writer Yael Abouhalkah did the yeoman's work of sifting through economic data to find that Kansas City scored 21st among 25 metropolitan areas in job growth over the last three years. The top city in job growth since 2011, according to Abouhalkah's findings published on Wednesday? Austin.

For a city like Kansas City, which is desperate to appeal to the millennials, Abouhalkah's report should sound alarm bells. Millennials, like anyone else who has to pay bills, will gravitate toward where they can find jobs. 

But despite government policies geared toward creating what they describe as a "business friendly" environment (income tax cuts in Kansas, nonstop tax breaks for large Kansas City corporations), the region stoops below similarly sized (and even several smaller) cities for new job opportunities.

We highlight the Star's report because it flies in the face of so much boosterism emanating from the city's political and civic leaders. It's fine to extoll the region's strengths, which do exist and are worth promoting. But those exaltations of the Kansas City region paper over its troubling realities. And people who point out the region's difficulties are scorned by some city leaders as "negative." Naysayers is a common term. Or they're called CAVEmen (get it? Citizens Against Virtually Everything).

The Greater Kansas City Chamber of Commerce set out to make Kansas City America's most entreprenurial city as one of the planks to its "Big 5" ideas.

But is it?

Not so, according to a sobering report by the Mid-America Regional Council and the Brookings Institutution out a month ago. The MARC study found, among other things, that the Kansas City region is way behind the national average in patent grants per 10,000 jobs.

"Though Greater Kansas City is home to several large and reputable research institutions, they produce relatively few patented breakthroughs," the MARC report says. "A handful of large companies generate a majority of the region's patents. Though these companies are important local assets, their innovations do not appear to be spilling over into other existing firms or driving the creation of new firms."

The MARC report highlighted a number of other realities that should be of concern to city and regional leaders:

• The region has not yielded enough highly educated or STEM (science, technology, engineering and math) qualified workers to meet the business community's needs, and the region has trouble attracting talent from outside the region.

• Educational achievement gaps, particularly among blacks and Hispanics, have resulted in stark income inequality and diminished future workforces.

• The region is losing far more people with college and graduate degrees than it is reeling in from elsewhere.

• Kansas City's post-recession recovery is ahead of Milwaukee and St. Louis, but behind a host of other similarly sized cities such as Pittsburgh, Columbus, San Antonio and, yes, Austin.

The list goes on.

And while Kansas City political and business leaders try to foster an attractive quality-of-life environment for millennials through events like last Friday's Fiery Stick and prioritizing capital projects like the streetcar and high-rent urban housing, the MARC report says talented people go to where they can find opportunities in growing economies.

That notion is underscored by data from the U.S. Census Bureau's Current Populations Survey. The survey polled people with bachelor's degrees who moved across state lines between 2000 and 2013 and found that 51 percent moved because of job opportunities, 43 percent because of family reasons or life changes. Only 7 percent moved because of quality-of-life factors like community amenities, housing quality and climate.

"While a high quality of life helps," the MARC report says, "it is not sufficient to overcome the lure that a high-value, innovative economy provides to talented people." 

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