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Shreveport/Bossier needs real development leadership

While Shreveport metropolitan area denizens hear all the hype about the area’s burgeoning film industry, conventions supposedly coming to town, or the probable coming of the U.S. Air Force Cyber Command, the reality is the area ranks near the bottom of places for business and careers, according to Forbes Magazine. If area politicians can stop breaking their arms patting themselves on their backs for a moment and pay attention to this, maybe they can learn how to try to improve matters.

Shreveport’s metropolitan area ranks 162nd on the Forbes list out of the largest 200 metropolitan areas. Not that this placement is exceptionally bad in Louisiana – the best ranking is held by Baton Rouge at 142, and Shreveport is sandwiched by New Orleans and Lafayette. Among smaller areas, nor does Louisiana’s rank well either, ranging from 128 to 156. Nine categories were used to make this ranking, which provide clues as to how the area can increase its desirability.

Incredibly, Shreveport ranks this low despite being fifth-best in terms of the cost of doing business, which includes taxation and costs of labor, energy, and office space. Even more incredibly, the taxation component depresses this specific ranking, because even though Caddo Parish (like most of Louisiana’s on the list) ranks in the bottom 20 nationally because of the homestead exemption, sales taxes are above average. It’s the resource costs which are really low, but only energy’s for a good reason – lots of it nearby being pumped and refined. Office space is cheap because of a glut, and labor costs are cheap due to several other factors.

Two are colleges (number of four-year institutions in the area) and educational attainment (proportion of population older than 24 with a bachelors’ degree), ranking 130 and 158, respectively. This in large part is out of the hands of local policy-makers because it has been state educational policymakers that have given Shreveport in the form of LSUS the state university enrolling the smallest proportion of its population of any metropolitan area in the country at just over one percent, through its policy of benign neglect and favoring other state institutions. Lower levels of educational attainment mean lower-paying jobs.

While this situation also relates to a stronger component to the ranking, putting the area’s cost of living in 66th place, it also aids in creating the two worst rankings – 193 in crime rate and 200, yes, dead last, in income growth. A better educated population, not just with college degrees but with meaningful high school diplomas, simply is less likely to be stupid enough to think crime pays and more likely to bring value added to jobs to increase productivity thus pay.

Add to this that job growth is a decent 81 in rank and this tells us what growth is occurring is in the least productive kinds of jobs – waiting tables at the Boardwalk, sweeping up at the boats, and doing wardrobe at film sites. Throw in the fact that relatively there’s not much culture and leisure activity (defined as museums, theaters, golf course, sports teams and other activities) to attract or keep those in more productive professions (rank of 163) and net migration is problematic (130th) and it’s a wonder this area ranked as high as it did.

(Not that this is any surprise: the area’s rankings have been, since 1999, 153, 188, 185, 165, 123, 131, 142, 133, and this year’s 162. It should be noted that 1999 had only 162 areas ranked, and 2004 only 150. In other words, no real improvement.)

Two things have to change to alter this situation, although one is partially out of the hands of local policy-makers. That is provision of better education. At the tertiary level, much higher state priority needs to be placed on my employer, LSUS.

At the elementary and secondary level, while Louisiana pumps more than enough money into it and has made big strides in student and school accountability, it has failed miserably in teacher accountability – it practically doesn’t exist. Programs such as teacher subject area testing for job retention, merit pay, and introduction of competition through vouchers means salary increases won’t be a matter of throwing good money after bad in many cases, but will begin to match the value expected.

Also, the “Field of Dreams” economic development strategy plaguing government on both sides of the Red River – build it and they will come – must be replaced by the obvious notion that it is not government that creates economic development, but people when it leaves them sufficiently alone to do so. Using taxpayer resources in the subsidizing or building convention centers, arenas, movie studios, outdoor shopping centers, and the like, instead of spending on infrastructure and/or giving the people’s money back to them to allow and to attract investment, has created this situation of the only jobs created being the least productive ones.

I’ll bet for most readers this is the first they’ve seen of the Forbes rankings; area elected officials (or local print media) certainly haven’t been advertising them. Now that we know of them, are we finally going to start doing something to change the situation?


T. Wong said...

I blogged this issue on 3/24, but I didn't have the details you have. I think we agree here. Here is what I came away with:

1. Corporate tax cuts and/or economic development incentives would not make much difference in the Forbes poll-- Shreveport and the other large LA cities are already low in their costs of doing business. I think labor, energy, taxes, and rents were factored in.

2. Educational attainment makes the most difference in the Forbes poll-- look at how LA cities compare with Little Rock. We compare favorably except in education. And Little Rock ranked 32 overall.

3. If ethics/quality of government were factored into Forbes' ranking, I can't see it. Do you?

4. If the Forbes ranking reflects the captains of industry's thinking, Jindal's emphasis on ethics reform, corporate tax reduction, and economic development incentives are likely to do little to spur economic development from new, outside investment.

Jeff Sadow said...

Two things need to be noted here. First, state policy only partially affects the situation in these local areas. The local governments themselves also have to do positive things. Second, it is precisely tax cuts you identify in your first point that will help in some of these categories -- for example, not only in job creation, but quality job creation.

T. Wong said...

Problem with local governments doing "positive things" is that they grant incentives to move development over a governmental boundary, which is usually artificial in the context of the local economy.

Don't know how to make it happen, but local leaders need incentive to act in the best interest of the local economy, not the parochial interests of their political subdivision. But they would then be acting against the political will of their consituents.

As society has become more mobile, political boundaries have interfered with progress.