By B.C. Manion
When it comes to Pasco County’s economy, it appears better days are ahead, said economics expert William H. Fruth at a Feb. 1 luncheon at the Tampa Bay Golf & Country Club in San Antonio.
“A lot of things have bottomed out, so it looks like it’s not going to get any worse. That’s good news,” said Fruth, president of POLICOM Corporation, an independent economics research firm based in Palm City, which specializes in analyzing local and state economies and economic development.
“The question, of course, is how soon will it get better?” added Fruth, a member of a team working to develop Pasco’s new economic development plan.
The path to economic prosperity is not just a matter of adding jobs or new companies, Fruth told the audience of 200 political, business, education and economic development leaders at the Business Development Week luncheon, organized by the Pasco Economic Development Council (PEDC).
It’s essential to attract the right kinds of companies, the economics expert said. Fruth defines such firms as those not solely dependent on the local economy for their business and which employ large numbers of high-wage workers.
He understands the dynamics of what creates a vibrant economy because he’s evaluated data for more than 700 local economies in the United States and has created more than 200 economic and community studies.
He shared his expertise at the luncheon, offering a condensed primer on how local economies work.
Much like a bucket leaks water when it has a hole in it, every economy drains wealth, Fruth said. So, communities must have companies that will replenish their wealth, he said.
The problem is, there are a limited number of primary industries, and communities across the country are competing to attract or retain them, Fruth said.
To be competitive, communities must have the right mix of conditions as well as government policies and a welcoming attitude, Fruth said.
There are brighter days for Pasco’s job market on the horizon, Fruth predicted.
“It looks like you’re going to have some nice job growth,” he said about this year. He added, “Around 2017, employment levels will reach the levels that were the boom years.”
Pasco workers lag the nation, in terms of average salaries. Fruth said if nothing is done to attract high-wage jobs, that gap will widen.
“Your wage is really down there, and it’s going to take an effort to get it up,” he said.
It’s not enough for Pasco to merely go after companies that have a large number of jobs, Fruth said.
“The great myth is creating any kind of new job will help the economy,” Fruth said.
Low-paying jobs, however, dilute the strength of an economy and can contribute to a downward spiral, he said.
“It is projected that your wage in this county, by 2025, will drop down to 61 percent of the national average,” Fruth said, based on his projections. “There’s no reason to suggest that this will not occur if you do nothing about it.”
By attracting companies that offer high-paying jobs, the salary situation improves for workers on every rung of the pay-scale ladder, Fruth added. Employees in the $55,000 range compete for jobs paying $65,000, and employees in the $45,000 range compete for jobs in the $55,000 range and so on, he explained.
“When we talk about the quality of the economy, we talk about what people earn. I don’t make any apologies for that. There’s nothing more important than money, than for what money is intended,” Fruth said.
Money makes it possible to purchase better housing, better clothing, better food, more secure retirement, better healthcare and more vacation, he said.
When companies are choosing a location, they consider a broad range of issues, including utility costs, taxes, regulations and other factors, Fruth said.
“The community selection process, at the beginning, is a community elimination process,” Fruth said.
For instance, electric costs can range from 15 cents to 4 cents a kilowatt hour, he said. So, “if you use a lot of electricity, where are you going to go?”
The availability of land ready for development is a huge issue, Fruth said. Being ready for build means that the site has the proper zoning, is served by roads, water, sewer and electric utilities, and can be quickly permitted, Fruth said.
The speed of permitting is important because if it takes too long, companies will go elsewhere, he said.
Having available land is a fundamental requirement, Fruth said. If an area reaches build-out, there’s no room for existing companies to expand or new companies to move in or start up.
Pinellas County already lacks land for existing companies to expand, and Hillsborough County has a shortage of industrial real estate, he said.
“This is where you come, understanding Pinellas doesn’t have any industrial property, understanding that Hillsborough is running out of it,” Fruth said. “Pasco County needs to become the catcher’s mitt, for your existing high-wage employers in the region, when they need new facilities and when they have to expand.”
To learn more about how local economies work, visit www.policom.com and click on a link called The Flow of Money.