Author Archives: philhardwick

Thank you Stennis Institute and Mississippi State University

Thank you Stennis Institute and Mississippi State University for the wonderful retirement luncheon and for the opportunity to serve in this capacity for 11 years. Very much appreciated. My wish for y’all is very simple – Go dawgs!
http://www.wcbi.com/wordpress/video-stennis-institute-of-governments-hardwick-steps-down

Political incentives are part of, not separate from, market incentives

August 27, 2014

This morning I ran across this comment in a letter to the editor of the Los Angeles Times: “Objective analyses have shown that so-called business incentives are ineffective. Such subsidies replace market incentives with political ones.”

The subject of economic development incentives continues to get a lot of attention by studies and commentary, and yet the practice goes on and even grows as evidenced by incentive ads by Texas and New York. It seems that, like the letter quoted above, some people think that political incentives are separate and apart from market incentives. Quite the contrary, business decisions, i.e. economic decisions, have always included political factors. When a business is considering investing in a particular state it takes all factors into account. Political factors, being one of them.

Governments influence markets in many ways, from price supports for agricultural products to loans and advice to companies seeking to export to other countries. All of these are political incentives and are part of, not separate from, market incentives.

Why I resubscribed – and then didn’t – to the Clarion-Ledger

A month or so I canceled my subscription to The Clarion-Ledger, my local daily newspaper. I did so because it had gotten very thin, almost like a grocery store flyer, with minimal local news. It had begun carrying USA Today sections, which I access online anyway. In short, the local news was minimal. Lately, the news has gotten better, especially the reporting by certain Geoff Pender, Sam Hall, Clay Chandler and a couple of others. I should point out that I am a news junkie. That’s why I decided to resubscribe.

When I received an email from the Clarion-Ledger inviting me to resubscribe for 50% off for three months I decided to do so. I attempted to do so online at the links given in the e-mail, but was unable to do so because I “already had an account.” Grrr. I called the 800 number, gave the promotion code and had a nice conversation with someone who said that he did not know why I could not resubscribe either. I understand that newspapers are struggling and are attempting to find the best mix of print and online products, however…

Oh, well.

If you had $18 million to invest in your community, what would you focus on?

There are few things more important to community and economic development than good schools. That’s why I’ve often said that the greatest thing that could happen to my city would be that the public schools were so good that there would be a waiting list for students to get in. Consequently, I’m interested in following projects that attempt to improve schools and communities.

The Kalamazoo Promise is one such project. Basically, it is a community revitalization project begun in 2006 that offers incentives – in this case, scholarships – for families that move into Kalamazoo, Michigan. It is an economic development project that invests in human capital. As of summer 2010, the program had paid out $18 million in tuition for about 2,000 high school graduates to attend Michigan universities. Below are links to webpages that provide more information about the project. So here is the question to you: If you had $18 million to invest in your community, where would you put it?

###

The Kalamazoo Promise website.
Why these kids get a free ride to college – NY Times article
Kalamazoo Promise article at Wikipedia
Kalamazoo Promise featured on NBC Nightly News

 

Successful economic developers look thorugh the customer’s eyes

July 7, 2014

“What do I have to do to win your business?”

That’s a common question (or comment) heard from auto dealership lots to office suites. It’s how many salespersons have been trained to open up the customer to begin negotiations. Unfortunately, sometimes it’s a way for the salesperson to show that he or she doesn’t know much about the customer.

Economic developers are many things: Facilitators, information specialists, real estate finance experts, and – yes – salespersons. Good salespersons know that one of the best things to do is to put one’s self in the shoes of the customer, so to speak, because sometimes even the customer doesn’t know what it takes to win his or her business.

The July/August issue of Inc. magazine contains an article entitled, “The Come-Hither Tax Breaks.” It discusses how companies should be prepared “… to be wooed and persuaded by states looking for a long-term relationship with your technology company.” It is recommended reading for economic developers who want to understand just a little more about how companies view state tax breaks and to see the deal though the customer’s eyes.

Raising the Minimum Wage in Mississippi: An Econometric Model

March 31, 2014

An Economic Brief from the University Research Center at the Mississippi Institutions of Higher Learning entitled “Raising the minimum wage in Mississippi: An econometric model” is well worth reading.

Here’s the Executive Summary:

Recently, President Obama called for an increase in the Federal minimum wage. Congress had also responded by introducing the Fair Minimum Wage Act of 2013 (S. 460). That legislation if enacted will increase the minimum wage in three steps, from $7.25 to $10.10 per hour. The rate will then be indexed to inflate on each year thereafter. In addition, the legislation will increase the required cash wage for tipped workers in annual 85 cent increases, from today’s $2.13 per hour until the tip credit reaches 70 percent of the regular minimum wage. Several other US Senate and House bills including S. 1737, H.R. 1010 and 3746, have also been introduced to increase the minimum wage. None have been enacted to date. The President also issued an Executive Order raising the minimum wage for Federal Contractors to $10.10. Using the Regional Economic Models, Inc. Mississippi model PI+ V1.5.3, it is estimated that initially 1,766 jobs will be lost in the fi rst year, rising to 9,139 by 2028 then beginning a slow increase in jobs over the next 30 years, absent any other economic change in the economy.

What Business Expects From Schools – Notes from a panel discussion

“What Business Expects of (the local school district) and What Businesses Can Do to Assist (the local school district) in Reaching Those Goals” was the subject of a panel discussion sponsored by the Jackson Public Schools Partners in Education. The panelists included representatives of a medical center, an engineering firm, a life insurance company, an employment agency and an economic developer. Below is a summary of their comments.

- Students need to know how to communicate. That includes speech, dress and nonverbal language. If they cannot communicate well they cannot represent their employer well.

- Students needs to know about time management. For example, a student who spends more time studying for the first test they are taking instead of the more important test they are to take indicates that the student needs to manage time better.

- Independent learning is something that workers will do for the rest of their lives, so students need to understand how to learn on their own as well as with a group.

- Large businesses need all types of skills. Students should no shy away from applying with a company just because they do not have the skills for the company’s main focus. Large companies need accounting, marketing and human resource personnel even though the company may be in a very technical business.

- Social media matters. Students should know that their social media pages, images and comments will follow them for a lifetime and will be used in consideration of employment.

- Employers are concerned that students do not have basic math skills.

- Drug tests are routinely given by many employers at the time of application and randomly during employment.

The panelists pointed out that schools should not be hesitant about asking for business support, but that schools should have specific requests and proposals in mind. Panelists gave a summary of how their companies and organizations interacted with their school partners.

20140228-124326.jpg
l-r Mark Bailey – Neel-Schaffer Engineering, Stephanie Hopkins Southern Farm Bureau Life, Phil Hardwick – Stennis Institute, Natalie Gaughf – University Mississippi Medical Center, Carolyn Boteler – Tempstaff.