Error message

  • Warning: preg_match() [function.preg-match]: Unknown modifier '2' in getOS() (line 1183 of /home/citywire/public_html/sites/all/themes/tcw/template.php).
  • Warning: preg_match() [function.preg-match]: Unknown modifier 'c' in getOS() (line 1183 of /home/citywire/public_html/sites/all/themes/tcw/template.php).

Fort Smith Board discusses concerns with regional economy

story by Ryan Saylor
rsaylor@thecitywire.com

The Fort Smith Board of Directors dove into the region's economy and attempted to understand why the city has some of the highest numbers of households depending on welfare and other supplemental income and has some of the lowest number of households relying on earnings earned through employment.

According to a memo from City Administrator Ray Gosack, the study session topic came about as a result of a 2013 report from the college of business at the University of Arkansas at Fort Smith that compared "sources of household income in the Fort Smith region with the United States, Arkansas, Oklahoma, and the northwest Arkansas region."

The various sources of income, Gosack said, included earnings (wages, salaries, etc.), social security, retirement/pension, supplemental security (stipends to low income elderly, blind or disabled persons), cash public assistance and food stamp/SNAP benefits.

"The concern," Gosack wrote, "is that a smaller percentage of the Fort Smith population in the comparison group is participating in the workforce."

THE DEMOGRAPHICS
Dr. Kermit Kuehn, the UAFS College of Business's author of the report, explained some of the figures in depth and explained that in Fort Smith, 35% of the local population earns an income from Social Security while only 29% of the nation, 34.3% of Arkansas and 31.0% of Oklahoma does the same.

The number of people age 65 and older in Fort Smith is 12.7%, while the state as a whole has 14.4% of the population 65 and older and 14.1% of the national population is 65 or older. The study also showed that 19.7% of Fort Smith residents do not hold a high school diploma, compared with only 16.7% of Arkansas as a whole, 13.8% of Oklahoma and 14.3% of the nation.

When it comes to income, Fort Smith's median household income is $37,232 versus $40,531 across the state of Arkansas, $44,531 in Oklahoma and $53,046 nationally.

Kuehn's research, using figures from the Bureau of Labor Statistics, also shows that from January 2007 through January 2013, the total workforce declined in Fort Smith from 3.97% while the U.S. workforce has grown by 1.89% during the same period. By comparison, Arkansas' overall workforce only shrank 1.48% while Oklahoma's increased by 4.75% and the Northwest Arkansas region improved by 4.45%.

There were no simple answers to reversing the trends, he said, adding that the Fort Smith economic picture has been "consistent."

"The picture for Fort Smith has been very consistent. I did a study back in 2010 of similar characteristics of the community and that data revealed a pretty consistent picture of a community that tends to have lower income, the demographics tend to have lower education levels and thus a higher dependency on public support systems like you had mentioned Social Security, SNAP programs and these type of public assistance. You add to that the aging of the population and you begin to see fruits of that and the implications of that as far as the disposal income that becomes available as time goes on."

As a result of the lower incomes and dependence on public assistance, the entire economy suffers, Kuehn said.

"The net result is what you have is a population, a community that has probably less disposable income and probably will (continue declining) as aging of the population continues and boomers continue to retire and Social Security and disposable income decline," he said.

RECENT NUMBERS
A continued decline in the size of the workforce and the number of employed edged the Fort Smith metro jobless rate to 6.4% in June compared to 6.3% in May. The rate was lower than the 8.2% in June 2013, but the number of employed in the region fell 2.24% in the 12-month period.

The size of the Fort Smith regional workforce during June was 126,822, down slightly from 126,971 during May, and well below the 132,323 during June 2013, according to figures released by the U.S. Bureau of Labor Statistics. The labor force reached a revised high of 140,253 in June 2007, meaning the June workforce size is down 9.57% from the peak number.

The number of employed in the Fort Smith region totaled 118,751 in June, down from 118,929 in May, and an estimated 2,726 jobs below the 121,477 employed in June 2013.

Kuehn said losses of large manufacturers has also hurt because many employers now require additional skills, even in manufacturing, and some of the only real growth in the employment sector has been in hospitality (tourism), which he said are traditionally the lowest paying jobs and hardly fill the void created by some of the highest paying jobs lost from the exodus of manufacturers in Fort Smith.

COST OF JOBS
He said the costs of jobs — fuel to and from work, the cost of so-called "work" or professional clothing, babysitting costs, etc. — have in some cases disincentivized both adults in a home from working when the net benefit is only a few hundred dollars a month or less.

City Director George Catsavis asked Kuehn what the city could do in this "new frontier" to spur economic development in the absence of traditional manufacturing employment.

Kuehn said the city must focus on growth areas, pointing to the healthcare industry as a good place to start.

"One of the great things that is happening (economically is the expansion of) health services," he said. "I think we have at least one or two administrative centers here, handling or processing for regional or nationally for Golden Living and (the Shared Services Center). But in any case, these are great types of jobs that are white collar, tend to pay more than the typical service sector-type jobs. Additionally, we have two medical centers. Further, we have clinics that are going up all over the place. Further, we have a medical college that's coming. I think these are the making of a great… I'd call them clusters, meaning there's gaps in that cluster that could be the basis of emphasis on recruiting, a pursuit to do whatever to get those gaps filled. That's important for this kind of sector. And you have a different leg growing than just a manufacturing leg or hospitality-related jobs, which really don't go very far for very many people."

Advertisement:

Catsavis also asked Kuehn's professional opinion about efforts to raise the Arkansas minimum wage to $8.50 within three years. In response, Kuehn said it would hurt the Arkansas economy, especially in Fort Smith where the overall income is lower.

He said adding income could result in companies furthering automation efforts to reduce payroll costs, leading to higher unemployment. In other areas, cuts may come in hourly workers' shifts coupled with increases in the cost of goods.

"There's always a payday. Nothing's ever free, it always works through and the consumer pays for that."

Five Star Votes: 
Average: 4.4 (11 votes)

Like This Article? Share It!

Comments

In a Nutshell

This is the problem (challenge) of the Fort Smith economy and future. The TIP Strategies report from some years ago addressed this very thing. Despite all the caterwalling and knashing of teeth from those I call the Trolls it is not the city government, the good ole boys or any other boogie men that is holding the city to a poor comparison with NWA. It is, as that astute observer of our culture Pogo, said many years ago."We have met the enemy and he is us". We are too old, to ignorant,(which is not stupid) and too poor. TIP told us that we needed to develop a "quality of place". The cool factor to attract the young entrepreneurial class of people. This is in part infastructure improvements and we have made some improvements. This is stuff such as the coming water park and new ball fields. The gorilla in the room,however, is the ongoing mandated storm water program that is incredibly expensive and may cost another 200 Million bucks. That sort of sucks the air out of the room. So what to do? Continue to build quality of place as Tip Strategies recommended. In order to do this we need to keep up and accelerate investment. This is counter to the mindset of our dominant demographic who mainly just want to be left alone with no change. To do that condemns us to remaining and growing more dependent on SSI, Social Security, food stamps, Medicare and Medicaid and voting for politicians that want to do away with those programs.
This is the problem (challenge) of the Fort Smith economy and future. The TIP Strategies report from some years ago addressed this very thing. Despite all the caterwalling and knashing of teeth from those I call the Trolls it is not the city government, the good ole boys or any other boogie men that is holding the city to a poor comparison with NWA. It is, as that astute observer of our culture Pogo, said many years ago."We have met the enemy and he is us". We are too old, to ignorant,(which is not stupid) and too poor. TIP told us that we needed to develop a "quality of place". The cool factor to attract the young entrepreneurial class of people. This is in part ...>> Read the entire comment.

Just Maybe

all the millions and millions of taxpayers dollars spent on studies and experts should have been spent on making the city more business friendly and embracing the free market system. I suspect that a whole lot of our local economy problems are a direct result of problems created for business start ups by City Hall. It was not too long ago that someone at the city said "they did not want those average paying jobs in Fort Smith" when talking about those 10 dollar per hour jobs created in Jonesboro.

If It Is The Gorilla, Let's Concentrate On The Gorilla!

Observer, maybe you should quit bullying and calling those you disagree with "Trolls" and concentrate on the real problems. How long has Fort Smith had a storm water decree from EPA? Why has the city administration concentrated on raising water and sewer rate increases 3 times only to turn around and take $2.1 million to provide utilities to 60 acres of private riverfront property rather than addressing the storm water issues? How lucrative is the water and sewer fund to allow such to happen? I could go on and on about how hundreds of $1000s has been wasted on either convention center losses, forgiving debt from non-profits, or a number of other special interest projects, but I'm trying to make the comments short, but none of these special projects have been scaled down or stopped. How many communities in NWA or Jonesboro for that matter have a UDO Code? I truly don't think most Fort Smithians want to be left alone with no change as you stated. I think most would prefer to have a city administration who supports and encourages the ordinary taxpayer the opportunity to open a business, enlarge a business as they themselves feel is right. Tell me Observer, my favorite pizza shop has a booming business, what if they wanted to enlarge their business, but by adding on, the city code enforcement wouldn't allow such because they wouldn't have enough parking places, is that really a concern of the city's or should that be a concern of the business owner, after all doesn't he have a viable interest in his business?
Observer, maybe you should quit bullying and calling those you disagree with "Trolls" and concentrate on the real problems. How long has Fort Smith had a storm water decree from EPA? Why has the city administration concentrated on raising water and sewer rate increases 3 times only to turn around and take $2.1 million to provide utilities to 60 acres of private riverfront property rather than addressing the storm water issues? How lucrative is the water and sewer fund to allow such to happen? I could go on and on about how hundreds of $1000s has been wasted on either convention center losses, forgiving debt from non-profits, or a number of other special interest ...>> Read the entire comment.

Gorilla

Jack, yes those places listed do have unified development ordinances. Yes, they care about how development is done in regard to parking spaces. NWA has far more stringent and in depth development ordinances than Fort Smith could ever have. The sustainability issue that was turned away by our BOD is not has restrictive as Fayetteville's water runoff and creek bank restoration ordinance. Yes, I know, because I lived there and was involved in development. What we need are leaders and department heads to have common sense management skills and understand there can be circumstances they make it desireable even if it is a varience from the ordinance. You want a builder to build a house without a plan? Why would you want to build a city with no planning. This last week, variences were voted on and approved by the Cities planning commission.
Jack, yes those places listed do have unified development ordinances. Yes, they care about how development is done in regard to parking spaces. NWA has far more stringent and in depth development ordinances than Fort Smith could ever have. The sustainability issue that was turned away by our BOD is not has restrictive as Fayetteville's water runoff and creek bank restoration ordinance. Yes, I know, because I lived there and was involved in development. What we need are leaders and department heads to have common sense management skills and understand there can be circumstances they make it desireable even if it is a varience from the ordinance. You want a ...>> Read the entire comment.

When a few active regular citizens memorize the codes

and then run around constantly checking and complaining it makes it difficult to make any allowances whatsoever. Could a few like this be a major problem around here? Add this to being involved helping to plan many city activities plus hanging around places such as this trying to keep the 'lower class ignoramuses' on the right track they just might very well be.

You Nailed It Jack

Terrible management of available taxpayer funds and an over reaching city government has caused many problems for the people of Fort Smith so it may be time for new thinking and a new direction for us to travel in the way that our city is governed.

Pointless

Jack, for me and you to discuss anything is pointless. You live in another universe from anything I consider positive. I suggest you go take a ride on the Ferris wheel and and dream of Jonesboro. I look forward to you running for office so I can vote against your backward ideas and should you win I will surrender and move from here and let you and the boys have it. I will wish you well and see the city surely wither and die. Adios Jack, I will respond to you no more.

Sorry Observer

If you are happy with the city in its present state than its you that belongs in outer space! The policies of this administration have driven off 14 or 15 thousand jobs and there are 14 or 15 thousand less people working in Fort Smith than just a few years ago. Jack has exposed all the REAL NUMBERS so fire up your taxpayer fed rocket ship manned by your crony crew and travel to another city like Detroit. Fort Smith has lost 100's of millions of dollars in commerce and increased the size of government to strangle small business with restrictive codes so we don't need any more of your policies to continue the slide to the bottom. We need more small business starts, jobs, common sense codes, business friendly city leaders, and more people like Jack to turn this thing around because your ideas don't work! Shame on you because the real numbers on business and employment indicate that you and your buddies at city hall are the real problem.

Have Noticed

The Observer has tried to bully people by calling them names and seems to be an insider of city hall and that is just my opinion folks but Jack seems to be looking out for the average person and that has the good old boys upset.

Is Observer working in cahoots with others here?

Ha ha ha to whichever one of the three it was that thought they killed not only my highly regarded name but mainly the information available no where else in the fort that goes along with it. You are such an amateur! Observer types here will only quit talking to Jack under some name when the tulips are blooming in the springtime 5 feet or so up there because Jack is a serious threat to their beloved status quo around here. The status quo being if someone in one of their groups manages to regurgitate an idea, you simply pass a tax and it's done. It's just that simple! After all it doesn't hurt the filthy commoners when you relieve them of more their money (it's only a tad), in fact it actually helps them. The library tax failure was a shocker to ones here who used to have the games all to themselves safely inside the walls of the fort. The natives are getting restless out there.

Hey Jack

The Observer is upset with you because you tell the real story about the incompetence of city leadership so now he refuses to respond to you. I remember when I was a kid, we had a ball player that took his bat and went home if the game was not played by his self serving rules.

There's a reason the gorilla's still in the room

and it's because over the last few decades someone like you and certain accomplices here have pressured the city unmercifully as to this now what is being called 'quality of place' gimmick which I bet one of you found while scouring the internet and have pressured them (city officials) to exhaust all the money they could get their hands on for downtown area amenities and might even have reminded them the real needs could all added to our utility bills if need be near the end anyway. Comes a money depleting recession, a set of voters who are beginning to catch on to old tricks, and here we are sitting beside an ape with hardly any bananas. Your solution is to have our citizens pay up to $2667 per person not family for the EPA problems and unless you can twitch your nose and make it happen agree to whatever amount of taxation is needed to take care of the rest. Sounds like there are a lot of things you don't want to change either.

Agreed!

He said adults weren't incentivised to work here, where we have some the cheapest wages and lowest costs of living! Give people the opportunity to have more discretionary income. Who cares if we save the rich money! He is worried about the buck being passed on to him.

Same old story

It's no secret the region suffers from low wages and lack of disposable income which means a vast percentage of people can't afford to support or attend concerts, ballgames or other attractions available in other regions leading to the tired comment "there's nothing to do here". Income has been the issue for as long as I've been alive (which makes the opposition to a minimum wage increase odd, to say the least). The numbers look even worse when you take Fort Smith out of the equation. Le Flore, Sequoyah, Franklin and Logan counties are especially poor and lacking in employment opportunities. Many of these people move to Fort Smith and take whatever low-skill job they can find to scrape by. Same deal with the immigrants. There is no magic formula to get us out of this rut. It's going to take a lot of time and hard work to change an ingrained culture and perception we're only good enough for low-skill work. Keep supporting UAFS and homegrown companies like ABF, as it sure appears outside startups and companies aren't banging down doors to fill downtown with good jobs any time soon, not in bottom-barrel, low wage Fort Smith.

Yes But The Real Story Is

The City Leadership is fully aware that we have the lowest average wages in the state but they keep asking for all kinds of tax increases. Why?

Did Anyone Notice

the expensive ads run in the newspaper supporting the property tax increase to raise the amount of tax money going to the library and its list of tax increase supporters. It was the same old people and families who have made a pretty good living off the fort smith taxpayers who just can't seem to get enough of someone else's hard earned money that would be better spent taking care of their own families. Sad and a telling story of what is really wrong here.