Built on Manufacturing-another View

December 22nd, 2008 at 06:58pm Bob Trojan

When I read the article headlined in this past Sunday’s RRStar Paper Edition, I said…hmmm. Here it is for your update, don’t forget the “photos” which are the charts…..

http://www.businessrockford.com/biznews/x16582006/Rock-River-Valley-Built-on-manufacturing-financed-by-much-more

I certainly agree that there has been a shift from the large manufacturing employers to other large organizations.  But that was the end.

My observations about this article are several:

1.  The basis for comparison in the above article is the tax base of various organizations.  Admittedly, this information is easily obtainable.  But is this the way to measure “wealth creation?  Just because you have a lot of property, does that make you a “wealth creator?

2. When I saw the Airport Authority at the top of the list, I wondered…how many employees do they employ, as compared to the average manufacturing company in the Rock River Valley?   (Answer: 100) .

Employees working in any industry generate a “multiplier” principal, something I learned, well, way back.  It says, a wage will be spent on other things and that will generate other income, and they will spend on other stuff,…well you get the idea.

So what multiplier can you attach to real estate taxes?  I guess we’ll have to ask John Lewis at NIU.

3. To see Wal-Mart at #2 position, well let’s see, it’s seems to me that manufacturers make more wages per hour than the retail person in Wal-Mart.  So wouldn’t they (manufacturers) generate more wealth?

4. The latest data I’ve seen on RAEDC’s website still  shows 21-22% of the workforce being in manufacturing, not the 17.1% shown in the article.  Besides, according to John Lewis, there is conservatively a one-one relationship of supporting services.

While I don’t disagree with the premise of the article, I think it’s misleading to think that manufacturing is going away. Our region has too many small-medium companies that would fight to keep being a factor in our economy.

Entry Filed under: Management, Technology, Economy