06-B PEDC Budget 2007-2008 - Laserfiche WebLink

Home Browse Search

Lamar County - Paris Economic Development Plan economy, and the jobs-to-population ratio. In order to successfully compete with other regions to attract and retain high-wage primary employers, the county will need to offer incentives to qualifying companies. An incentives matrix, or mathematical screening process that can be used to pre-qualify a company for particular incentives, has been developed to assist with this process. Principles To Guide Paris Economic Development Policies By Pete Kampfer, PEDe This paper contains the discussion of principles for local economic development policies. What principles should help set the 20als, or2anization, and methods used by local economic development policymakers? How should local policymakers evaluate economic development programs? GOALS Guiding Principle I: Creatin2 More Jobs in a "Broadlv Defined Market" Has Si2nificant Benefits. "More jobs" is the number one goal of most local economic development organizations. The empirical evidence supports placing a high priority on more jobs for the overall local labor market. The local labor market is an area that encompasses most local commuting flows, such as a metropolitan area. Increasing the total jobs in a local labor market significantly increases the earnings of local workers and the unemployed. Empirical research shows that an increase of ten percent in a metropolitan area's employment will increase average real earnings per person by around four percent. Half of this increase in real earnings occurs because local residents who otherwise would be out of the labor force get jobs. The other half of the increase in real earnings occurs because growth allows some individuals to be promoted to better paying occupations. The benefits of local employment growth are greater, in percentage terms, for lower income persons, less educated persons, and blacks. For example, an increase in metropolitan area employment has about twice as great a percentage effect on the income of families in the bottom income quintile (the poorest one-fifth of all families) as it does for the average family. As a result, faster employment growth in a metropolitan area significantly reduces local poverty. How can suburban employment growth help central city residents, when many city residents do not have access to these jobs? Only some metropolitan residents need have commuting access for an increase in jobs anywhere within a metropolitan area to affect all metropolitan residents. For example, if new suburban jobs go to suburbanites who formerly commuted to the central city, the resulting central city job vacancies may benefit central city residents. There is enough commuting between different communities within a metropolitan area that the entire metropolitan area shares similar, if not identical, labor market fortunes. Where jobs are located within a metropolitan area does make some difference, but not as much as the health of the overall local labor market. The benefits of more jobs are greater in local labor markets with high unemployment and sluggish growth. Such distressed areas will have a less mobile population and are probably less attractive to in-migrants. Additional jobs are more likely to increase the employment rates of current residents and are less likely to go to in-migrants. In addition, the social benefits of employing the average unemployed person are greater in a high unemployment area than in a low unemployment area. In a low unemployment area, most persons who perceive a high benefit to employment will have a job. The remaining unemployed will on average only perceive modest benefits to becoming employed-the wage rate will not much exceed the value they Paris Economic Development Corporation Page 43