Tag Archives: Greater Wichita Partnership

In Wichita, a gentle clawback

Despite the mayor’s bluster, Wichita mostly lets a company off the hook.

As reported in Wichita City Council to consider a clawback, a company failed to meet the targets of an economic development incentive, and according to that agreement, owes the city $253,000 in clawbacks.

The city council, however, decided to require the company to pay only $100,000 of that. The city reasoned that because the company is planning an expansion, that would offset the other $153,000 of the clawback.

Wichita Mayor Jeff Longwell described this is holding the company accountable. The Wichita Eagle quoted him as saying, “This is why we’ve done it, to make sure that everyone is accountable and that the taxpayers, at the end of the day, win.”

But despite the mayor’s bluster, the city failed to enforce the agreement it made to protect taxpayers. Instead, the company receives $153,000 in free taxes that it didn’t deserve, along with an interest-free loan of $100,000 amortized over four years.

By the way, the same Eagle article reported: “Fiber Dynamics, a company founded by Darrin Teeter to commercialize technology developed at Wichita State’s National Institute for Aviation Research in the early ‘90s, hasn’t had to pay city property taxes since 2008, an estimated value of more than $500,000.”

Actually, the company didn’t pay any property taxes on the exempted property. That includes county, school, and state taxes.

Wichita migration not improving

Data from the United States Census Bureau shows that the Wichita metropolitan area has lost many people to domestic migration, and the situation is not improving.

The Wichita metropolitan area population is growing, but at a rate slower than most metro areas. From 2010 to 2017, the Wichita metro area grew in population by 2.3 percent. For all U.S. metro areas, the population growth was 6.5 percent. Of the 382 metropolitan areas, Wichita ranked 245.

Considering just the change from 2016 to 2017, Wichita’s population grew by 0.1 percent, ranking 268 of the 382 metro areas. All U.S. metro areas grew by 0.8 percent over the same period.

For net domestic migration, Wichita experienced a loss of 2.9 percent of its population from 2010 to 2017. This ranked 295 among metro areas. For 2016 to 2017, Wichita lost 0.5 percent, ranking 293, nearly unchanged from the larger earlier period.

This slow population growth and out-migration is happening at the same time Wichita-area leaders tell us that we have great momentum going forward. But the data — domestic migration, employment, gross domestic product, and personal income — don’t support what our leaders tell us.

I get it: We want to be optimistic about our future. But a false optimism is dangerous. It makes us complacent, even proud, when actual accomplishments don’t support that. We may be led to believe that what our leaders are doing is working, when it isn’t working. That is dangerous.

Politicians and bureaucrats can’t be trusted to be frank and truthful about this. They want to be reelected and keep their jobs. Their actions let us know they value their jobs more than the prosperity of Wichitans.

Wichita employment to grow in 2019

Jobs are forecasted to grow in Wichita in 2019, but the forecasted rate is low.

The forecast for Wichita metro area employment in 2019 calls for modest growth of 0.9 percent, according to the Center for Economic Development and Business Research at Wichita State University. 1 This follows growth of 0.8 percent in 2018. 2

Nationally, the economy is expected to continue strong growth. 3

The nearby chart illustrates that since the end of the last recession, job growth in Wichita has been below job growth in the nation as a whole. Generally, job growth in Wichita has been at about half the rate of the nation. In 2017, Wichita lost jobs.

Click for larger.

Of Wichita job growth in 2018, the CEDBR forecast notes, “This marked a return to the level of growth experienced in the Wichita area from 2012 to 2016, after experiencing a contraction in overall employment in 2017.” The average annual rate of job growth for those years in Wichita was 0.83 percent. It was 1.82 percent for the nation, which is 2.2 times the rate for Wichita.

CEDBR also notes, “Wichita’s unemployment rate declined throughout 2018 to a low of 3.5 percent in October 2018, the lowest unemployment rate for the area since 1999.” We should note that this decline is primarily due to a declining labor force in Wichita, rather than robust job growth.


Notes

  1. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. January 8, 2019. Available at http://www.cedbr.org/forecast-blog/forecasts-wichita/1558-economic-outlook-wichita-2019-january-revision.
  2. Employment figures are not available for December 2018, so I use a crude estimate for that month.
  3. Minutes of the Federal Open Market Committee. December 18-19, 2018. Available at https://www.federalreserve.gov/monetarypolicy/fomcminutes20181219.htm.

Wichita City Council to consider a clawback

The unrealized potential of an economic development incentive teaches lessons.

This week the Wichita City Council will consider an amendment to an economic development incentive agreement. 1

In 2008 the city awarded an incentive to a company in the form of exemption from paying property taxes, estimated by the city to be $93,175 annually at the time the incentive was awarded. 2

The incentive was awarded based on the applicant company creating a certain number of jobs and making a certain level of investment. It was rewarded on a five plus five basis, meaning that the city council reviewed the deal after five years. The plan was if the company met goals, the city would extend the incentive for another five years.

At the five-year review, however, the applicant company had not met the job goals. The city invoked an exception that allowed extension of the incentive based on a downturn in the economy as measured by the Wichita Current Conditions Index, which is produced by the Center for Economic Development and Business Research at Wichita State University. 3

Now is the end of the second five-year period. The job goals have not been met, and the city has decided the applicant company is in default of the agreement. The city is proposing a clawback, that is, recovery of the value of the incentive for the second five-year period. According to the agenda packet: “The value of the abated taxes for the second five-years is approximately $253,000. The City Council could clawback the entire amount, or some portion, per the incentive agreement.”

But: The agreement that the council will consider is that the applicant company build an expansion to its facilities at a cost of $2,500,000, using no incentives. Also, the company will repay $100,000 of the abated taxes, in four annual payments of $25,000.

A few things to learn:

First, economic development incentives don’t always work. This reflects the uncertainty of business. When the city presents projections like benefit-cost ratios, it might want to remind us that these values will be achieved only if the project targets are reached. When businesses describe their plans, these are called forward-looking statements. They are accompanied by disclaimers like “subject to risks and uncertainties that could cause actual results to differ materially.” Investors and interested parties are “cautioned not to place undue reliance on these forward-looking statements.” The same cautions hold for citizens of Wichita, as they are the investors paying the cost of incentives and expecting to receive the benefits. That is, after all, the foundation of the benefit-cost analysis that accompanies requests for incentives: That by spending now or by giving up future tax collections, the city receives even more in benefits.

Second, cities often don’t have the fortitude to strictly enforce clawbacks. Here, the company is receiving credit of $153,000 for construction an expansion to its facility, something the company was contemplating anyway. In other words, receiving credit for something it was going to do anyway. This is the usual case. 4

Third, when the city and its officials say we no longer use cash as an incentive, here’s a case where the city canceled $153,000 of debt the city is entitled to, based on its agreement with the applicant company. That’s just like cash.

For more on this topic, see Clawbacks illustrate difficulty of economic development and In Wichita, a gentle clawback


Notes

  1. Wichita City Council Agenda Packet for January 8, 2019. Item V-1.
  2. Wichita City Council Agenda Packet for February 12, 2008. Item No. 34
  3. See http://kansaseconomy.org/local-indices/wichita-current-index.
  4. Bartik, Timothy J. 2018. “‘But For’ Percentages for Economic Development Incentives: What percentage estimates are plausible based on the research literature?” Upjohn Institute Working Paper 18-289. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. https://doi.org/10.17848/wp18-289.

Wichita employment, November 2018

For the Wichita metropolitan area in November 2018, jobs are up, the labor force is up, and the unemployment rate is down, compared to the same month one year ago. Seasonal data shows a slowdown in the rate of job growth.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a mostly improving employment situation for the Wichita Metropolitan Statistical Area.

Total nonfarm employment rose from 296,700 last November to 302,200 this November. That’s an increase of 5,500 jobs, or 1.9 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 1.6 percent.

The unemployment rate was 3.2 percent, down from 3.6 percent one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by 391 persons (0.1 percent) in November 2018 from October 2018, the number of unemployed persons fell by 8 (0.1 percent), and the unemployment rate was unchanged at 3.5 percent. The number of employed persons not working on farms rose to 298,749 in November from 298,350 the prior month, an increase of 399 persons, or 0.1 percent.

Click charts for larger versions.

Sedgwick County income and poverty

Census data show Sedgwick County continuing to fall behind the nation in two key measures.

Data released today from the United States Census Bureau through the Small Area Income and Poverty Estimates (SAIPE) Program shows Sedgwick County median household income continues to fall farther behind the nation.

In 1989, median household income in Sedgwick County was greater than that for Kansas and the nation. In 2017, however, Sedgwick County has fallen behind both.

In 1989, the all-age poverty rate in Sedgwick County was less than the national rate, but now it is higher.

As can be seen in the nearby charts produced by the Census Bureau’s visualization tool, the trend in economic performance between Sedgwick County and the nation started diverging around the time of the last recession. As time passes, the gap between the two generally grows larger, with Sedgwick County falling farther behind.

Courtesy U.S. Census Bureau. Click for larger.
Courtesy U.S. Census Bureau. Click for larger.

Wichita employment, October 2018

For the Wichita metropolitan area in October 2018, jobs are up, the labor force is up, and the unemployment rate is down, compared to the same month one year ago. Seasonal data shows a slowdown in the rate of job growth.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a mostly improving employment situation for the Wichita Metropolitan Statistical Area.

Total nonfarm employment rose from 296,900 last October to 299,000 this October. That’s an increase of 2,100 jobs, or 0.7 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, jobs in the nation grew by 1.7 percent.

The unemployment rate was 3.3 percent, down from 3.5 percent one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by 719 persons (0.2 percent) in October 2018 from September 2018, the number of unemployed persons rose by 283 (2.7 percent), and the unemployment rate was unchanged at 3.5 percent. The number of employed persons not working on farms rose to 298,219 in October from 297,783 the prior month, an increase of 436 persons, or 0.1 percent.

Click charts for larger versions.

Personal income in Wichita rises, but slowly

For 2017, personal income in Wichita rose, but slower than the national rate.

Today Bureau of Economic Analysis, an agency of the United States Department of Commerce, released personal income figures for metropolitan areas through the complete year 2017. For the Wichita metropolitan statistical area, personal income in 2017 rose from the 2016 level in nominal dollars, and is now slightly less than the 2104 level.

For all metropolitan areas in the United States, personal income rose by 4.5 percent. For the Wichita metro area, the increase was 2.3 percent. Of 383 metropolitan areas, Wichita’s growth rate was at position 342.

While the Wichita area has kept up with national personal income growth and even surpassed it in some years, that is no longer the case. Wichita’s income has stalled while national income continues to grow.

Click for larger.
Click for larger.

Wichita employment, September 2018

For the Wichita metropolitan area in September 2018, jobs are up, the labor force is up, and the unemployment rate is down, compared to the same month one year ago.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area.

Click for larger.

The best numbers for Wichita are the total nonfarm employment series, which rose from 294,400 last September to 299,600 this September. That’s an increase of 5,200 jobs, or 1.8 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.)

The unemployment rate fell to 3.3 percent, down from 3.9 percent one year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by 1,315 persons (0.4 percent) in September 2018 from August 2018, the number of unemployed persons fell by 398 (3.6 percent), and the unemployment rate fell to 3.5 percent from 3.6 percent. The number of employed persons not working on farms rose to 298,510 in September from 296,797 the prior month, an increase of 1,713 persons, or 0.6 percent.

Click for larger.

Click charts for larger versions.

Wichita employment, August 2018

For the Wichita metropolitan area in August 2018, jobs are up, the unemployment rate is down, and the labor force is smaller, compared to the same month one year ago.

Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area.

Click for larger.

The best numbers for Wichita are the total nonfarm employment series, which rose from 291,300 last August to 296,000 this July. That’s an increase of 4,700 jobs, or 1.6 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.)

The unemployment rate fell to 3.8 percent, down from 4.6 percent from a year ago.

Considering seasonally adjusted data from the household survey, the labor force rose by five persons from July 2018, and the number of unemployed persons fell by 511 (4.7 percent), and the unemployment rate fell to 3.6 percent from 3.8 percent. The number of employed persons not on farms rose to 296,366 in August from 295,810 the prior month, an increase of 556 persons, or 0.2 percent.

Click for larger.

Click charts for larger versions.

Wichita economy shrinks, and a revision

The Wichita economy shrank in 2017, but revised statistics show growth in 2016.

Statistics released today by the Bureau of Economic Analysis, an agency of the United States Department of Commerce, show gross domestic product (GDP) figures for metropolitan areas. Also included are revised statistics for previous years.

For 2017, the Wichita metropolitan area GDP, in real dollars, fell by 1.4 percent. Revised statistics for 2016 indicate growth of 3.8 percent for that year. Last year BEA reported growth of -1.4 percent.

In the revised statistics released today, GDP in 2012 was 28,346 million in chained 2009 dollars. In 2017 it was 29,610 million, a change of 1,264 million or 4.4 percent. For all U.S. metropolitan areas, the same statistic increased from 13,692,212 million to 15,224,212 million, an increase of 1,532,000 million or 11.2 percent.

Wichita, not that different

We have a lot of neat stuff in Wichita. Other cities do, too.

In New York Magazine, Oriana Schwindt writes in “The Unbearable Sameness of Cities: What my journey across the United States taught me about indie cafés and Ikea lights.”

I couldn’t stop noticing. I’d go on to see the same in Colorado Springs, in Fresno, in Indianapolis, in Oklahoma City, in Nashville.

And it wasn’t just the coffee shops — bars, restaurants, even the architecture of all the new housing going up in these cities looked and felt eerily familiar. Every time I walked into one of these places, my body would give an involuntary shudder. I would read over my notes for a city I’d visited months prior and find that several of my observations could apply easily to the one I was currently in.

In his commentary on this article, Aaron M. Renn wrote: “While every company tries its hardest to convince you of how much different and better it is than every other company in its industry, every city tries its hardest to convince you that it is exactly the same as every other city that’s conventionally considered cool.”

Later in the same piece, he wrote:

A challenge these places face is that the level of improvement locally has been so high, locals aren’t aware of how much the rest of the country has also improved. So they end up with an inflated sense of how much better they are doing versus the market. … People in these Midwest cities did not even know what was going on in the next city just 100 miles down the road. They were celebrating all these downtown condos being built. But the same condos were being built everywhere. … But even today people in most cities don’t really seem to get it that every city now has this stuff. Their city has dramatically improved relative to its own recent past, but it’s unclear how much it’s improved versus peers if at all.

Does this — the sameness of everywhere — apply to Wichita? Sure. Everyone thinks Wichita is different from everywhere else. We have a flag! A warehouse district! A Frank Lloyd Wright house! The NCAA basketball tournament! We’re (probably) getting a new baseball team and stadium!

We even have, as Schwindt does in cataloging what you’ll find in every single city mid-size and above, “Public murals that dare you to pass them without posing for a pic for the ‘gram.”

So many other places have this stuff, too.

It isn’t bad that Wichita has these things. But the danger, as Renn notes, is that these things don’t distinguish Wichita. As much as we wish otherwise, these things are probably not going to reverse the course of the declining Wichita economy. If you don’t believe the Wichita economy is declining, consider that our GDP in 2016 was smaller than in the year before. Wichita metro employment growth was nonexistent during 2017, meaning it’s unlikely that GDP grew by much. (In January 2017 total non-farm employment in the Wichita MSA was 295,000. In January 2018 it was the same. See chart here.)

Even things that might really have a positive effect on the economy, like the Wichita State University Innovation Campus, are far from unique to Wichita. But developments like this are pitched to Wichitans as things that will really put Wichita on the map. A prosperous future is assured, we are told.

It’s great to love your city. But we can’t afford to be lulled into complacency — a false recognition of achievement — when all the data says otherwise.

We need a higher measure of honesty from our leaders. It might start with the mayor and the chair of the county commission, but the mayor seems terribly misinformed, as is the commission chair. Institutions that we ought to respect, like the local Chamber of Commerce, have presided over failing economic development but refuse to accept responsibility or even to acknowledge the facts. Worse, the Chamber spends huge amounts of money on blatantly dishonest campaigns against those candidates that don’t support its programs. Those programs, by the way, haven’t worked, if the goal of the Chamber is to grow the Wichita economy.

Wichita employment, June 2018

For the Wichita metropolitan area in June 2018, jobs are up, the unemployment rate is down, and the labor force is smaller, compared to the same month one year ago.

Data released this week by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area.

Click for larger.

The best numbers for Wichita are the total nonfarm employment series, which rose from 294,900 last June to 297,900 this June. That’s an increase of 3,000 jobs, or 1.0 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.)

Of note, the same series of data for the nation rose from 147,578,000 to 150,057,000 over the same time, an increase of 1.7 percent.

The unemployment rate fell to 4.0 percent from a year ago. Part of the improvement in the unemployment rate is due to a slightly smaller labor force.

Considering seasonally adjusted data from the household survey, the labor force rose slightly from May 2018, and employment was unchanged. This is a slowdown of a positive trend in the previous three months.

Click charts for larger versions.

An endorsement from the Wichita Chamber of Commerce

When the Wichita Regional Chamber of Commerce Political Action Committee endorses a candidate, consider what that means.

If you’ve been following analyst James Chung — and it seems like everyone has — he’s delivered a sobering message: The Wichita economy has not been growing. “[Wichita has been] stuck in neutral for about three decades, with basically no growth, amidst the landscape of a growing U.S. economy,” he said. (In fact, in 2016 the Wichita economy shrank from the previous year, and numbers for 2017 don’t look much better.)

Chung says we need to change our ways. In his June visit he said, and the Chung Report wrote, “Every market signal points to the same conclusion: The manner in which Wichita is operating during this critical point in our history is just not working.”

So what needs to change? Chung won’t say, but here are two things:

First, there are some elected officials and bureaucrats who have presided over the stagnation of Wichita. These people need to go.

Second, there are also institutions that are problems, with one glaring example. In one way or another, the Wichita Regional Chamber of Commerce has taken the lead in economic development for many years. In recent years the Chamber ran Greater Wichita Economic Development Coalition. Now the effort has been split off to a non-profit corporation, the Greater Wichita Partnership.

That sounds good, but under the hood it’s the same leadership and the same methods, although with a few new hired hands.

So when James Chung (and others) says our manner of operation is not working, it’s the Wichita Chamber of Commerce and its ecosystem that must assume a large portion of blame.

Not only has the Wichita Chamber manner of operation not been working, its leadership hasn’t been working, either. In 2014 the Chamber showed charts of Wichita job growth as compared to the nation and other cities, and Wichita was near the bottom. The Chamber’s response was to advocate for a Wichita city sales tax, some to be used for economic development, but also for water supply enhancement, street repair, and bus transit improvement.

The Chamber managed the political campaign for the sales tax, and in November 2014, 62 percent of Wichita voters said no.

After this, what did the Chamber do? It had told Wichitans that an economic development fund fed by sales tax revenue was essential. Then, the sales tax vote failed. But that isn’t the only way to fund what the Chamber said we needed. The Chamber could have asked the Wichita city council to raise property taxes, and the council could have done that with a simple majority vote of its members. (Since then it has become more difficult, but still possible, to raise local property taxes.)

Or, the city could have raised franchise fees. These are like a sales tax added to utility bills. This could also have been accomplished with a simple majority vote of the council. The council could do it today, if its members wanted to.

None of these possibilities were pursued, at least to my knowledge. The Wichita Chamber of Commerce, after advocating for a sales tax it said was essential, gave up after defeat. It recommended that Wichitans vote to impose a sales tax themselves, but when it came to something it could have accomplished — new taxes through city council votes — the Chamber backed away.

The Chamber then formed the Greater Wichita Partnership. But many of the people who supported the Chamber’s sales tax are directing the operations of GWP, serving its strategic advisory team and the more-exclusive executive board.

This includes the president and CEO of the Wichita Chamber, who was also president during the sales tax campaign.

The Chamber endorsements

So when the Wichita Regional Chamber of Commerce PAC supports candidates, spends money on their behalf, and issues endorsements, what should voters think?

Voters should remember that the Wichita Chamber has presided over the wreckage of the Wichita economy, its leaders still call the shots, and still wants to raise taxes, I believe.

Plus, these people will not accept responsibility for the harm they have caused.

This is a shame, because we want to be proud of our civic leadership. We want to have faith in our elected officials and bureaucrats.

But that isn’t the case in Wichita. Keep this in mind when considering candidates endorsed by the Wichita Regional Chamber of Commerce PAC.

Project Wichita survey

The Project Wichita survey is about to end. Will it have collected useful data?

Project Wichita is “a community engagement process to identify the future we want for our home and the steps necessary to achieve it.” 1 So far it has held focus groups that collected ideas for the future of Wichita, in which “an astounding 3,800+ people 2 shared their vision in 239+ focus groups,” according to the project’s Facebook page. The survey, which is ending on July 6, is another component of the “listen” phase of the project, with “focus” and “share” phases still to come.

The survey may be taken on-line or by paper. The online survey is implemented as a number of pages, each concerning a topic. The first page is titled “Vision for Our Region: Please indicate your level of agreement with the following for developing a vision for the Wichita region. Our region should be a place that:” Following are several items like “all children have the chance to succeed.” Respondents are asked to select one of these responses for each item:

  • Strongly Disagree
  • Disagree
  • Undecided
  • Agree
  • Strongly Agree

The second page is titled “Strong Neighborhoods. Please indicate the importance of investing resources (time, human resources, money) in the following for developing and supporting safe and strong neighborhoods throughout our region.” A sample item is “Repair deteriorating homes to improve neighborhoods.” Respondents may choose from these responses:

  • Not important investment
  • Slightly important investment
  • Moderately important investment
  • Very important investment
  • Essential investment

There is no opportunity to answer in any way other than these responses. There is no possibility of leaving a comment.

The question of the importance of investment continues with slight variation for six more pages on these topics:

  • Economic Advantage and Opportunity
  • Transportation
  • Cultural Arts
  • Attractions and Entertainment
  • Education; Community Wellness
  • Wichita Riverfront and Downtown Development

Then a page titled Regional Perspectives: “Please tell us your thoughts about the following regional questions” where participants are asked to indicate their degree of agreement or disagreement with the following:

  • I think an increase in population would make the Wichita region thrive.
  • I am optimistic about the future of the Wichita region.
  • I think the Wichita region has to be willing to change to keep and attract the next generation.

Then there are some demographic questions.

Problems

First, the responses that the project will collect are from a self-selected group of respondents. There is no way to guarantee or know that the respondents are a representative sample of area residents. The focus groups had the same problem. This has been a problem with Wichita’s outreach in the past. In 2014 the city was quite proud of its engagement and positive response regarding the proposed city sales tax. Then, on election day, 62 percent of voters said no. 3 (Of course, those who vote are also a self-selected group of respondents. On the sales tax question, 103,290 people cast a vote. 4 For that year, the Census Bureau estimated there were 283,780 people of voting age in Wichita. 5 So 36.4 percent of the eligible voters made the decision for the rest, voters and non-voters, and also for those too young or ineligible to vote. But when we ask to settle issues by voting, voters are the people who make the decisions.)

Another problem has to do with the preface to the many questions asking about the importance of making investments in various things. What is missing is whose resources are to be invested? Yours? Mine? Someone we don’t know?

Related is that almost all the items participants are asked to rate are things that almost everyone agrees are good. Who could not strongly agree with investing so that “all children have the chance to succeed?” I suppose that some people might select “Very important investment” instead of “Essential investment” for some items. That might produce a shade of difference in the importance of items.

What would really be useful, however, is asking participants to rank the importance of investing in each item, from most important to least important, with no ties allowed. Instructions might be worded like “Rank the importance of investing in the following five areas. 1 is the most important investment, while 5 is the least important. You must assign a rank to each item, and there may be no ties.”

Then, to make things really useful: Ask participants to produce rankings for the importance of public sector investment, and separate rankings for the importance of private sector investment.

Understanding and distinguishing the difference between public and private investment is vital. When people believe that others will be paying, there is no limit to what people want. Milton Friedman knew this: “When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it. When a man spends his own money to buy something for someone else, he is still very careful about how much he spends, but somewhat less what he spends it on. When a man spends someone else’s money to buy something for himself, he is very careful about what he buys, but doesn’t care at all how much he spends. And when a man spends someone else’s money on someone else, he doesn’t care how much he spends or what he spends it on. And that’s government for you.” (For more, see Friedman: The fallacy of the welfare state.)

People recognize this. Remarks left on Facebook on the Project Wichita page 6 included this by one writer:

Just took survey! One would think “they” want to convert Wichita or Kansas to socialism. I’m a liberal conservative Democrat and yet questions are very concerning and disturbing.

Following up, the same person wrote:

Applaud the effort however many of the questions concerning me as it relates to governments role in community and well-being of such. … At what point should community and individuals be primarily responsible for many of the topics you address in your survey?

Another Facebook user wrote:

Your survey is great but you left out a very important piece of information. WHO is going to provide the money for the investments that are queried in your survey? A lot of areas need investment of funds but, those funds should come from the private sector, not public sector. As a result of the inability to discern a difference in the source of required investments, the survey is somewhat useless.”

Yet another from Facebook:

Each of your questions should be followed by the question, “How much are you personally willing to pay for this line item” or “Which government service should be eliminated to pay for this line item”. Your list will get quite short when people are asked to spend their own money rather than other people’s money.

These basic defects preclude this effort as being serious social science research. Yet, that is likely how it will be presented, especially since a university agency is involved.

Of note: Project Wichita has no official opinion as who should pay for these investments. Cynics — that is, realists — believe that programs like Project Wichita are designed to convince citizens to support increased taxes or debt issues to be repaid with future taxes, with those future taxes undoubtedly higher.

One reason for this suspicion is that portions of the Project Wichita process are being managed by Wichita State University’s Public Policy and Management Center. 7 Its director and its associated academics have a clear preference for higher taxes, at one time writing a paper advising cities to create “more willing taxpayers.” 8

Other people and companies that Project Wichita identifies as part of the “Vision Team” (or “funders”) also made large contributions to the campaign for a Wichita City sales tax in 2014:

  • Allen Gibbs & Houlik, L.C.
  • Jon Rolph and his company Sasnak
  • The Chandler family and Intrust Bank
  • GLMV Architecture
  • Emprise Bank
  • Spirit Aerosystems
  • Commerce Bank
  • Equity Bank
  • Cox Machine
  • Westar Energy
  • Professional Engineering Consultants
  • Star Lumber
  • Bothner & Bradley and its principals
  • Envision
  • Lubrication Engineers
  • Jeff Fluhr, head of Downtown Wichita and now also Greater Wichita Partnership

Some of these companies regularly receive economic development incentives from the City of Wichita or do business with the city. Some are subject to the city’s regulations such as zoning and permitting.

It’s difficult to digest all this without concluding that Project Wichita project is designed to develop a case — an appetite — for higher taxes. That’s even before realizing that the driving force behind Project Wichita — according to word on the street — is Jon Rolph, who was the chair of the campaign for the Wichita city sales tax in 2014. Further, Project Wichita is sharing offices with the Greater Wichita Partnership and Downtown Wichita, two organizations always in favor of the expansion of government.

Individual questions

Besides general problems with the survey instrument, there are these problems with individual items:

“Improve the current public transit system (e.g. expand routes, expand hours).” There may be support for spending public funds on this, even if it means raising taxes. This was one of the uses for the proposed Wichita city sales tax in 2014. It was bundled with other items, and voters defeated the tax.

“Make flights from Wichita Eisenhower National Airport more affordable.” We’ve spent a lot doing this. The city and the airport say the programs have been successful.

“Increase direct flights from Wichita Eisenhower National Airport.” This is an area that could use improvement. The number of departures and the number of available seats on departing flights has been underperforming the nation, despite much investment in the forms of tax-funded subsidies for airlines. There is also a new airport terminal.

“Offer more diverse entertainment options (e.g. music festivals, restaurants, theme parks).” There are many people trying to figure out what type of restaurants are wanted in Wichita, and where. These people are motivated by profit. It’s difficult to believe that government could do a better job of deciding upon, and operating, restaurants.

“Support entrepreneurial opportunities.” There is an organization doing this, e2e. More broadly, when the city offers economic development incentives, it makes it harder for young, entrepreneurial companies to survive as they must bear the cost of incentives and compete with incentivized companies for labor and capital. 9

Under education, a topic that is glaringly omitted is school choice. Parents like having the possibility of school choice, especially parents who can’t afford private school tuition. Plus, school choice, like charter schools, could help control “sprawl,” something that is often seen as a negative factor. If parents who want to live in central Wichita could have access to school choice in nearby schools, it might counter the commonly-held perception that if you want good schools for your children, you must buy a home outside the Wichita school district.

“Provide modern performing arts center (e.g. symphony, music theater, opera) that meets the region’s needs.” and “Provide a modern convention center that attracts more conventions and events.” These are topics that Wichita will likely be grappling with soon, and in a real way. Wichita has already hired a consultant to study this issue. (More information is at Century II resource center.) A task force is studying the issue. Soon, it is quite likely that residents of Wichita or Sedgwick County may be asked to approve a sales tax to fund a convention center and possible a performing arts center. Or, citizens suffer the implementation of Design Build Finance Operate and Maintain (DBFOM), or P3. In this model as applied to Wichita, a third party would do all the work of designing, financing, building, and operating a convention center and possibly a performing arts center. Then, the city simply pays a fee each year to use the center, called an “availability payment.” This is simple a way to disguise long-term debt. See Wichita about to commit to more spending. Bigly. for more about this.

Cynics — that is, realists — believe that programs like Project Wichita are designed to convince citizens to support these taxes or debt issues. (By the way, the convention center business is a poor way to build a city’s economy. See Should Wichita expand its convention facilities?.)


Notes

  1. Project Wichita. Available at https://www.projectwichita.org/.
  2. With the population of the city of Wichita at about 388,000, (U.S. Census Bureau. 2012-2016 American Community Survey 5-Year Estimates), nearly one percent participated.
  3. Sedgwick County Election Office. Available at https://www.sedgwickcounty.org/elections/election-results/2014-general/.
  4. Ibid.
  5. U.S. Census Bureau. 2010-2014 American Community Survey 5-Year Estimates.
  6. Available at https://www.facebook.com/ProjectWichita/.
  7. “Volunteers wanted the regional 10-year vision and action plan Project Wichita process to include big discussions from as many people as possible. So Wichita State University’s (WSU) Public Policy and Management Center team built a custom process for gathering input across the region. The process includes focus groups with individuals and organizations, gathering feedback at diverse community events, online surveys and robust social media engagement.” Project Wichita. Process. Available at https://www.projectwichita.org/process.
  8. Misty Bruckner is the Director. A few years ago Brucker she and her colleagues co-authored a paper titled “Citizen Attachment: Building Sustainable Communities. See http://www.gfoa.org/sites/default/files/GFR_OCT_10_24.pdf. My reporting on it was titled Wichita needs more, and willing, taxpayers. An excerpt: “Increasingly, citizens are retreating from their responsibilities to community and demanding more from government than they are willing to pay for. But changes in local government behavior can be instrumental in reversing this trend, by strengthening citizens’ commitment to the well-being of their communities. Citizens who are committed to community are more willing to accept responsibility for the well-being of their fellow citizens and are also more likely to join with government and other parties to improve their communities. Citizens who are committed to community are also more willing taxpayers — that is, when government demonstrates that it can be trusted to invest public resources in ways that strengthen the community. The central thrust of this model is getting citizens and governments to work together, but realistically, many communities will require new revenue — including additional tax dollars — if they are to assemble the critical mass of resources necessary for meaningful change. Accordingly, citizens who are willing to pay increased taxes are an important component of building sustainable communities.” (emphasis added)
  9. See Weeks, Bob. Job creation at young firms declines. https://wichitaliberty.org/economics/job-creation-at-young-firms-declines/. Also: “Part of the cost of these companies’ investment, along with the accompanying risk, is spread to a class of business firms that can’t afford additional cost and risk. These are young startup firms, the entrepreneurial firms that we need to nurture in order to have real and sustainable economic growth and jobs. But we can’t identify which firms will be successful. So we need an economic development strategy that creates an environment where these young entrepreneurial firms have the greatest chance to survive. The action the Wichita city council is considering this week works against entrepreneurial firms.” Weeks, Bob. Wichita to grant property and sales tax relief. Available at https://wichitaliberty.org/wichita-government/wichita-grant-property-sales-tax-relief/.

Wichita jobs up

Wichita employment trends are positive for three consecutive months.

Seasonally adjusted data from the Bureau of Labor Statistics, part of the United States Department of Labor, shows a rise in the Wichita metropolitan area labor force and job count. This data is through May 2018 and shows three consecutive months of rising employment.

This is a reversal of the long term trend for Wichita, in which the labor force and employment have been falling or trending steady while the nation’s economy has been growing. An interactive visualization of employment data for all metropolitan areas is available here.

While the upward trend is welcome, it is not known whether Wichita can sustain positive growth.

In May, the forecast for Wichita from Center for Economic Development and Business Research (CEDBR) at Wichita State University was pessimistic: “The production sectors are projected to remain approximately flat in 2018. Natural resources and construction employment is forecast to increase by less than 100 jobs while manufacturing employment is projected to decline by less than 100 jobs.”

This decline in manufacturing employment is forecast even after the new Spirit Aerosystems jobs are accounted for. In its reporting on this forecast, the Wichita Eagle wrote:

Late last year, Spirit, the city’s largest employer, announced plans to hire an additional 1,000 mostly production workers over two years, with the bulk of the hiring expected in 2018. Bombardier announced plans to add 100 jobs when it moves its Global 5000 business jet interior completions work from Canada to Wichita later this year.

“I’m not so sure all of the positive news means we’re growing,” [CEDBR director Jeremy] Hill said.

He said the gains at Bombardier and Spirit are offset by contraction and consolidation by smaller manufacturers that supply parts to Spirit and other aircraft manufacturers. In some cases, work the smaller firms have done has been taken back by larger manufacturers, who are now doing it themselves. Retirements in aircraft manufacturing may also be affecting the numbers, Hill said, but he doesn’t have the data to confirm that.

“It is hard to get your hands on,” he said. “It’s definitely not showing up in the (employment) numbers, not showing up in output in durables manufacturing.”

Wichita and U.S. employment. Click for larger.

Sedgwick County jobs

Sedgwick County had fewer jobs in 2017 than in 2016.

The Bureau of Labor Statistics has released new data for the Quarterly Census of Employment and Wages. This represents data for the complete year of 2017, on a preliminary basis.

From December 2016 to December 2017 Sedgwick County employment was level, changing by 0.0 percent. According to the BLS news release, that ranked 317 of the 347 largest counties.

Showing monthly value with strong seasonality, and 12-month trailing moving average. Click for larger.
Using the monthly average job count, Sedgwick County had 248,772 (monthly average) jobs in 2016. For 2017 that fell to 247,022, a decline of 1,750 jobs or 0.7 percent.

As can be seen in the chart of change in job levels, 2017 continues a trend of slower job growth in Sedgwick County, with the growth trend turning negative.

Nonetheless, Sedgwick County leaders, as well as other local leaders, proclaim momentum in the local economy. Earlier this year Sedgwick County Commissioner David Dennis penned a column for the Wichita Eagle praising the county’s efforts in economic development. 1 Dennis is also chair of the commission this year. 2

In his column, the commissioner wrote: “Economic development is a key topic for the Board of County Commissioners and for me in particular. Right now we have a lot of momentum to make our community a more attractive place for people and businesses.”

In the same column he also wrote “There is a lot of momentum and forward movement in our community right now and I’m encouraged to see what we can achieve as a team.”

Looking at these statistics, it’s difficult to see how anyone could come to these conclusions.

According to BLS, “The Quarterly Census of Employment and Wages (QCEW) program publishes a quarterly count of employment and wages reported by employers covering more than 95 percent of U.S. jobs, available at the county, MSA, state and national levels by industry.” Also “The primary economic product is the tabulation of employment and wages of establishments which report to the Unemployment Insurance (UI) programs of the United States. Employment covered by these UI programs represents about 97% of all wage and salary civilian employment in the country.”

Source of data is Bureau of Labor Statistics, Quarterly Census of Employment and Wages, specifically series ENU2017310010: “All Employees in Total Covered Total, all industries for All establishment sizes in Sedgwick County, Kansas, NSA.” Data through December 2017.


Notes

  1. David Dennis. Sedgwick County part of drive to strengthen area workforce. Wichita Eagle, March 5, 2018. Available at http://www.kansas.com/opinion/opn-columns-blogs/article203559734.html.
  2. Weeks, Bob. Sedgwick County’s David Dennis on economic development. Available at https://wichitaliberty.org/sedgwick-county-government/sedgwick-county-david-dennis-on-economic-development/.

Wichita unemployment rate falls

For April 2018, the unemployment rate in the Wichita metropolitan area fell, and the number of jobs grew.

Today the Bureau of Labor Statistics released employment statistics for metropolitan areas through April 2018. These are numbers that are not seasonally adjusted, so it’s not very useful to compare any month with the month before. But it is appropriate to compare a month with the same month of the prior year.

The good news, sort of: The unemployment rate for the Wichita metro area declined to 3.6 percent in April 2018, down from 3.9 percent in April 2017. The number of unemployed persons also declined by 8.9 percent for the same period.

These numbers should be good news. But these two statistics don’t exist in a vacuum. Specifically, the unemployment rate is the ratio of the number of unemployed persons to the labor force. While the number of unemployed persons fell, so too did the labor force. It declined by 2,676 persons over the year, while the number of unemployed persons fell by 1,071. This produces a lower unemployment rate, but a shrinking labor force is not the sign of a healthy economy.

Click for larger.

A further indication of the health of the Wichita MSA economy is the number of nonfarm jobs. This rose by 100 from April 2017 to April 2018, an increase of 0.03 percent. This follows a decline of 0.5 percent from March 2017 to March 2018.

For April 2018, BLS reports:

Unemployment rates were lower in April than a year earlier in 305 of the 388 metropolitan areas, higher in 63 areas, and unchanged in 20 areas, the U.S. Bureau of Labor Statistics reported today. Eighty-eight areas had jobless rates of less than 3.0 percent and three areas had rates of at least 10.0 percent. Nonfarm payroll employment increased over the year in 312 metropolitan areas, decreased in 70 areas, and was unchanged in 6 areas. The national unemployment rate in April was 3.7 percent, not seasonally adjusted, down from 4.1 percent a year earlier. 1

Sources:
Bureau of Labor Statistics. Table 1. Civilian labor force and unemployment by state and metropolitan area, not seasonally adjusted. Available at https://www.bls.gov/news.release/metro.t01.htm.
Bureau of Labor Statistics. Table 3. Employees on nonfarm payrolls by state and metropolitan area, not seasonally adjusted. Available at https://www.bls.gov/news.release/metro.t03.htm.


Notes

  1. Bureau of Labor Statistics. Metropolitan Area Employment and Unemployment Summary. Wednesday, May 30, 2018. Available at https://www.bls.gov/news.release/metro.nr0.htm.

Wichita in ‘Best Cities for Jobs 2018’

Wichita continues to decline in economic vitality, compared to other areas.

NewGeography.com is a joint venture of Joel Kotkin and Praxis Strategy Group. Its annual “Best Cities for Jobs” project ranks metropolitan areas according to growth in employment.

Of 422 metropolitan areas considered, Wichita ranked 383, dropping 28 spots since the previous year.

Among 100 medium size metropolitan areas, Wichita ranked 93, dropping 5 spots from the previous year.

NewGeography.com uses employment data from the United States Bureau of Labor Statistics from November 2006 to January 2018. 1 Last year’s publication contains a more detailed explanation of how the rankings capture current year-growth, mid-term growth, and momentum. 2

In the analysis for 2017, Wichita had also fallen in ranking.

Wichita has momentum, they say

Despite this news, Wichita leaders are in denial. Recently Greater Wichita Partnership president Jeff Fluhr told a group of young people this:

From the innovation campus at Wichita State University and development along the Arkansas River in downtown, including a new baseball stadium, to the conversations happening now about a new convention center and performing arts facility, Fluhr said the momentum is pushing to keep Wichita on par with the development of other communities around the country.

That development, which has in recent years expanded to incorporate the entire region, is a critical component to attracting and retaining talent — the exact kind of talent in the ICT Millennial Summit crowd. 3

In January Wichita Mayor Jeff Longwell said, “It’s hard to find a time when we’ve had more momentum.” 4

In March Sedgwick County Commissioner David Dennis penned a column for the Wichita Eagle praising the county’s efforts in economic development. 5 Dennis is also chair of the commission this year. In his column, the commissioner wrote: “Economic development is a key topic for the Board of County Commissioners and for me in particular. Right now we have a lot of momentum to make our community a more attractive place for people and businesses.”

At the same time, the Wichita Eagle editorialized: “Wichita’s economy struggled to rebound from the last recession, which held the city back. But there have been positive economic signs of late, including a renewed focus on innovation and regional cooperation. … There also is a sense of momentum about Wichita. Yes, challenges remain, but the city seems to have turned a corner, with even greater things ahead.”6

In announcing his candidacy for Sedgwick County Commission, Wichita city council member Wichita City Council Member Pete Meitzner (district 2, east Wichita) said, “We have enjoyed great progress and growth during my two terms as a City Council member and I plan to do my part to assure Sedgwick County is part of this continued success.” 7

Given all this, it ought to be easy to find economic data supporting momentum, progress, and growth. Besides the NewGeography.com report cited above, let’s look at some other indicators.

Personal income. For the Wichita metropolitan statistical area, personal income in 2016 rose slightly from the 2015 level, but is still below the 2014 level. In real (inflation-adjusted) dollars, personal income fell in 2016. 8

Personal Income Summary, Wichita, through 2016. Click for larger.

Population. In 2000 Wichita was the 80th largest metropolitan area. In 2017 its ranking had fallen to 89. See Wichita metropolitan area population in context for more on this topic.

Trends of business activity in downtown Wichita. Click for larger.
Downtown Wichita. There’s been a lot of investment in downtown Wichita, both public and private. But since 2008 the trend is fewer business establishments, fewer people working downtown, and lower earnings generated in downtown Wichita. Almost every year these numbers are lower than the year before. This is movement in the wrong direction, the opposite of progress. There may be good news in that the number of people living downtown may be rising, but business activity is declining. 9

Employment. While officials promote the low Wichita-area unemployment rate, there is an alternative interpretation. First, the good news: The unemployment rate for the Wichita metro area declined to 3.9 percent in March 2018, down from 4.2 percent in March 2017. The number of unemployed persons declined by 8.3 percent for the same period. 10

Is Wichita’s declining unemployment rate good news, or a byproduct of something else? The unemployment rate is the ratio of the number of unemployed persons to the labor force. While the number of unemployed persons fell, so too did the labor force. It declined by 3,367 persons over the year, while the number of unemployed persons fell by 1,056. This produces a lower unemployment rate, but a shrinking labor force is not the sign of a healthy economy.

A further indication of the health of the Wichita-area economy is the number of nonfarm jobs. This number declined by 1,200 from March 2017 to March 2018, a decline of 0.4 percent. This follows a decline of 0.7 percent from February 2017 to February 2018.

Of the metropolitan areas in the United States, BLS reports that 308 had over-the-year increases in nonfarm payroll employment, 72 (including Wichita) had decreases, and 8 had no change.

Growth in output. The worst news, however, is that the Wichita-area economy shrank from 2015 to 2016. In real (inflation-adjusted) dollars, the Wichita metropolitan area gross domestic product fell by 1.4 percent. For all metropolitan areas, GDP grew by 1.7 percent. Since 2001, GDP for all metropolitan areas grew by 29.3 percent, while Wichita had 12.3 percent growth. 11

Wichita MSA employment, annual change. Click for larger.
The GDP figures are for 2016, and figures for 2017 won’t be available until September. So what happened in 2017? Could 2017 be the genesis of momentum to drive our economy forward?

While GDP figures aren’t available, jobs numbers are. For the year 2016, total nonfarm employment in the Wichita metropolitan area grew by 0.62 percent. For 2017, the growth rate was 0.56 percent — a slowdown in the rate of job growth. These job growth figures are far below the rate for the nation, which were 1.79 and 1.58 percent respectively.

Annual change in job growth, Wichita and USA through 2017. Click for larger.

Furthermore, Wichita’s job growth rate in 2016 was lower than 2015’s rate of 1.07 percent. This is momentum in the wrong direction. Nearby charts illustrate. 12

What to do?

The failure of the Wichita-area economy to thrive is a tragedy. This is compounded by Wichita leaders failing to acknowledge this, at least publicly. While we expect people like the mayor, council members, and the chamber of commerce to be cheerleaders for our city, we must wonder: Do these people know the economic statistics, or do they choose to ignore or disbelieve them?

From private conversations with some of these leaders and others, I think it’s a mix of both. Some are simply uninformed, while others are deliberately distorting the truth about the Wichita economy for political or personal gain. The people who are uninformed or misinformed can be educated, but the liars are beyond rehabilitation and should be replaced.


Notes

  1. “The methodology for our 2018 ranking largely corresponds to that used in previous years. We seek to measure the robustness of metro areas’ growth both recently and over time, with some minor corrections to mitigate the volatility that the Great Recession has introduced into the earlier parts of the time series. The ranking is based on three-month rolling averages of the U.S. Bureau of Labor Statistics’ ‘state and area’ unadjusted employment data reported from November 2006 to January 2018.” 2018 How We Pick The Best Cities For Job Growth. Available at http://www.newgeography.com/content/005973-2018-how-we-pick-best-cities-job-growth.
  2. 2017 How We Pick The Best Cities For Job Growth. Available at http://www.newgeography.com/content/005618-2017-how-we-pick-best-cities-job-growth.
  3. Daniel McCoy. ICT Millennial Summit: Wichita is having a moment. Wichita Business Journal, November 30, 3017. Available at https://www.bizjournals.com/wichita/news/2017/11/30/ict-millennial-summit-wichita-is-having-a-moment.html.
  4. Heck, Josh. Emerging Leaders panel offers insight into eco-devo strategies. Available at https://www.bizjournals.com/wichita/news/2018/01/11/emerging-leaders-panel-offers-insight-into-eco.html.
  5. David Dennis. Sedgwick County part of drive to strengthen area workforce. Wichita Eagle, March 5, 2018. Available at http://www.kansas.com/opinion/opn-columns-blogs/article203559734.html.
  6. Wichita is moving forward. March 1, 2018. Available at http://www.kansas.com/opinion/editorials/article135573253.html.
  7. Bill Wilson. Wichita council member unveils bid for county commission. Wichita Business Journal, November 30, 3017. Available at https://www.bizjournals.com/wichita/news/2018/02/13/wichita-council-member-unveils-bid-for-county.html.
  8. Weeks, Bob. Wichita personal income up, a little. Available at https://wichitaliberty.org/wichita-government/wichita-personal-income-up-2016/.
  9. Weeks, Bob. Downtown Wichita business trends. Available at https://wichitaliberty.org/wichita-government/downtown-wichita-business-trends/.
  10. Weeks, Bob. Wichita unemployment rate falls. Available at https://wichitaliberty.org/economics/wichita-unemployment-rate-falls-2018-03/.
  11. Weeks, Bob. Wichita economy shrinks. Available at https://wichitaliberty.org/economics/wichita-economy-shrinks/.
  12. In some presentations these figures may differ slightly due to data revisions and methods of aggregation. These differences are small and not material.

Personal income in Kansas and Wichita

Personal income in Wichita and Kansas has declined.

Today the Bureau of Economic Analysis, an agency of the United States Department of Commerce, released real personal income for the states and metropolitan areas. 1 The data released today is through the complete year 2016.

Real Personal Income for States, 2016. Bureau of Economic Analysis. Click for larger.
For the state of Kansas, real personal income declined from $137,975 million in 2015 to $137,307 in 2016, a decline of 0.5 percent. For the entire country, the growth was 1.1 percent. Among the states and DC, Kansas ranked forty-fifth in magnitude of change.

For the Wichita metropolitan statistical area, real personal income declined from $30,913 million in 2015 to $30,747 in 2016, also a decline of 0.5 percent. Of 382 metro areas, Wichita ranked 337th in magnitude of change.

Looking at per capita figures, real personal income per capita in Kansas fell from $47,483 in 2015 to $47,221 in 2016, a decline of 0.6 percent. For the entire country, the growth was 0.4 percent. Among the states and DC, Kansas ranked forty-third in magnitude of change.

Real personal income per capita in the Wichita metropolitan statistical area fell from $48,076 in 2015 to $47,694 in 2016, a decline of 0.8 percent. Of 382 metro areas, Wichita ranked 325th in magnitude of change.

“Real” means that the values are expressed in a way that recognizes the effects of inflation. In this case the values are in “millions of chained (2009) dollars.” Additionally, BEA uses regional price data to measure and account for the effects of regional inflation.

BEA offers this definition: “Real state personal income is a state’s current-dollar personal income adjusted by the state’s regional price parity and the national personal consumption expenditures price index.” 2 Metro personal income is defined similarly.

Personal income, also from BEA, is “The income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.” 3


Notes

  1. Bureau of Economic Analysis. Real Personal Income for States and Metropolitan Areas, 2016. Available at https://www.bea.gov/newsreleases/regional/rpp/2018/pdf/rpp0518.pdf.
  2. Ibid.
  3. Ibid.