Former Procter & Gamble executive and local start up guru Rich Kiley lends his thoughts on the dangers of economic stagnancy in this week's four part blog.
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Post 2 - Why Care?
Posted By: Rich Kiley
4/9/2008
Yeah, yeah, I’ve heard it all before about the globally competitive economy, but why should I care? I’ve got a good job, my children are doing well, the housing market isn’t that bad and I think things are going pretty well. I don’t really need to worry about our regional economic growth and the global economy – things are fine.
Well, you’re right. Things are fine, right now. But what about next year, the next decade, the future that your children can have living in this region? Are you all that certain that driving regional economic growth really isn’t that important to you?
Like most people, if things are going okay, we tend to feel okay about today and the future. But we all have friends who have been laid off jobs or needed to move to another region to find a job or have seen their wages not grow as fast as their household expenses. These are all a function of living in a region where the economy is not growing fast enough to absorb all of the labor available. So wage rates tend to stay low and jobs remain scarce.
If we could get our economy growing faster the region would be a better place for all of us to live, work and play. The connection to job opportunities is easy to see. But, the broad connection to the quality of life of every citizen is frequently overlooked.
Think about it. A faster growing economy means more higher paying jobs and a larger tax base for government. That bigger tax base supports many of the things that are absolutely critical to our quality of life – police, fire, public schools, libraries, parks, etc.
A stagnant or slow growing economy means the budget for these critical public services is always in trouble. If expenses increase faster than the tax base, the only way to pay the bill is through increased tax rates. That’s really bad for everyone – it means you and I are paying higher taxes, and businesses looking to locate in our region are discouraged because of high tax rates.
A thriving economy has exactly the opposite effect – increased economic activity means increased tax revenue without having to increase individual tax rates. And, it means our region is more competitive because it has all the quality of life services that people seek without a high tax burden.
Growth is a good thing.