economic growth and well-being in the mountain empire bill shobe center for economic & policy...
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Economic Growth and Well-being in the Mountain Empire
Bill Shobe
Center for Economic & Policy Studies, U.Va.
Wise Virginia, February 23, 2013
You heard it hear first…
Prosperity is not about money.
Income Growth in SWVA
Source: Bureau of Economic Analysis, Regional Economic Information System
Income Growth: Another View
Source: Bureau of Economic Analysis, Regional Economic Information System
Income Growth: Sources
Source: Bureau of Economic Analysis, Regional Economic Information System
The Economy is Dynamic
Jobs and people move around (a lot).
Unemployment
Source: Virginia Employment Commission
Employment by Sector
Population
Source: Virginia Employment Commission
Development Conundrums
Higher productivity labor implies higher potential wages and more opportunities elsewhere
Higher wage jobs imply greater productivity, so fewer workers are needed
Increased economic activity implies higher costs (price of fixed assets)
Entrepreneurship increases with density
What Contributes to Prosperity?
Human capital Health and education
Natural capital Resources Amenities
Social capital Entrepreneurship Effective and responsive government
The Elephant in the Room
Coal has been a great natural advantage for the region But has it also been a curse? Has it limited diversification? Has it reduced the focus on human capital and
entrepreneurship?
Coal Production
Coal and Natural Gas Prices
Increasing Prosperity
Must address all three stocks of regional capital People Place Institutions
Must be based on a realistic assessment of advantages and potentials rather than simplistic comparisons to other places
If You Build It…
There is a sense in which a region is like a firm: If you provide something people want And do it efficiently And let them know about your product Your prospects are good.
BTW: A firm that has to pay people to consume your product, you have some thinking to do.
A Land of Natural Advantage
There is enormous untapped potential here
The way forward is: Grounded in realistic assessment And focused on the elements of prosperity
rather than simple money measures of economic activity, which are a consequence of prosperity rather than a cause.
Thank you
Bill ShobeCenter for Economic & Policy Studies
Weldon Cooper Center for Public Service
University of Virginia