The Tennessee Department of Economic and Community Development (TNECD) is accelerating economic inequality, in their small business programming, for a measly 4.1% annual return for Tennessee taxpayers. More of the return analysis later. 

TNECD program design, using taxpayer dollars, has incented venture capitalists to chase market momentum, where it already exists, in Nashville ! Folks like polo player Orrin Ingram and Denny Bottorff of Ingram Industries benefit from public funds, in Nashville, where it is least needed. Bottorff’s, Nashville NuScriptrx, took down $7.3M in public funding across 5 different funds, from both the TnInvestco and LaunchTN programs. Ingram’s YouScience project took down $1.4M from LaunchTN. 

Again, from the previous blog and per Bureau of Labor and Statistics, Nashville’s Davidson County has 37 business establishments per 1K population, compared to Memphis/Shelby at 23. The need for small business funding is in Memphis, not Nashville. Further, venture capital funds are often used to gamble on the next large company and not Mom and Pop’s, which is what Memphis needs more of to power its local economy. Memphis lacks sufficient small business establishments, especially in the Black community, to competitively power the local economy. 

Nashville and Memphis

In theory, TNECD programming, through TNInvestco and LaunchTN, supports capital formation for emerging small business entrepreneurs. But as one can see, public dollars are going to support established businessmen like Ingram and Bottorrf. Total State facilitated investments, from TNInvestco and LaunchTN programs, total $115M for Nashville and $24M for Memphis, while follow on private capital totals $768M for Nashville and $134M for Memphis. 

And to make matters worse, Memphis based INNOVA, of the TNInvestco program, redistributed $5.1M in state funding for investments outside of Memphis, while keeping $7.8M in Memphis. As far as INNOVA private capital, $42M was invested outside of Memphis, while $29M was invested in Memphis startups. Of the above, INNOVA invested $1.1M in state funds and $28.7M in private funds in Bottorrf’s NuScripts. See below table sourced from TnInvestco.

Unfortunately, Shelby County Government and Epicenter are both partnered with INNOVA. In a recent Daily Memphian article by Sam Stockard, Jan Bouten, INNOVA fund manager, was unavailable for comment. All that to say, on top of the elitist corporate socialist policy in Memphis, that favors large local corporations, it’s easy to see, from the above table, why Memphis struggles.

State ROI Analysis

Using public documentation, the above informal quantitative analysis was conducted, to facilitate initial policy discussions for greatly improving small business economic development programming. The above analysis is likely to change once TNECD answers questions posed by this blog. So far, TNECD has been unresponsive. 

To that extent, this blog welcomes suggested corrections to this analysis and feedback. Given the former disclaimer, a measly 4.1% Tennessee taxpayer annual return, over 10 years, was generated from TnInvestco and LaunchTN, seemingly to accelerate inequality, all while making risky startup investments and subsidizing select venture capitalists.

By comparison, the Tennessee Consolidated Retirement System generated a 9.4% annualized return in more conservative investments. And, not surprisingly, no one seems to know what private investors made on their investments. 

While building an ecosystem for entrepreneurship, TNInvestco and LaunchTN were sold to taxpayers based on increased tax revenue from more small business jobs and returns generated by investing in startups. Those benefits are included in the above analysis. 

To that extent, since several startup companies are participating in both TnInvestco and LaunchTN, both programs need to be evaluated together.  Given this, a total of 3,206 jobs was the outcome of the collective analysis, which took the highest number of jobs reported, per company, from both programs.

It was also assumed that investments, jobs and distributions, increased equally and linearly over the 10 yr. term. As far as economic multipliers, it is assumed that 50% of the investments would have occurred anyway without state funds, which in effect, imposes a 2.0 economic multiplier in the analysis. 

The analysis used conservative assumptions, based on public documentation, in favor of TNInvestco and LaunchTN. Based on this, it is more likely the 4.1% ROI will decrease than increase with informed feedback or additional information. The analysis included, for example, 356 jobs from the 40 year established, Nashville operating Gray Line Tours company. 

So please send me questions, feedback and suggested corrections to improve the analysis for the benefit of policy improvement, Tennessee taxpayers and small business. My email is jkent@pathtrek.net

References

TnInvestco Report – 2019

LaunchTN Report – 2020

LaunchTN Incite Investments

LaunchTN Impact Investments

BLS QCEW 

LaunchTN, a statewide small business program, appears to be a Nashville gang bang of the Shelby County taxpayer. Does anyone think small business in CEO and polo player Orrin Ingram? Ingram is CEO of the multibillion dollar Ingram Industries, SCORE Board member and polo player in his spare time. 

Seems Ingram Industries, their peers, and Nashville in general are getting the best of the LaunchTN small business program. LaunchTN is marketed as a statewide small business funding consortium  for entrepreneurs. But there is nothing in LaunchTN data to support that the public small business program is targeted toward areas of the most need. 

For example, Ingram’s venture capital project, YouScience, received $1.4M from LaunchTN. YouScience is a web-based programming platform, to help individuals select their career pathway. This is nothing against the product. YouScience, while not perfect, turns out to be a well designed suite of assessment tools, based on personal experimentation.

But this is about the LaunchTN program, where there is more for Ingram cronies. Another Ingram peer, in Denny Bottorff, of ND Acquisitions Corporation, doing business as “NuScriptRx”, took down $1.9M in LaunchTN investments. Bottorff is on Ingram’s Board of Directors.

The numerical data in this blog was provided by Ms. Van Tucker, CEO of LaunchTN. Tucker, who is relatively new to LaunchTN, was accommodative in providing data and hasn’t had time to influence the direction of LaunchTN. Hopefully Tucker will influence LaunchTN to direct its efforts more toward areas of greater need like Memphis.

The LaunchTN Board, Chaired by the Commissioner of Tennessee Economic Development, Bob Rolfe, ultimately approves LaunchTN small business investments. And their historical work translates into a Nashville gang bang of the Shelby County taxpayer. Besides, Nashville doesn’t need the help.

Nashville is growing like gangbusters and has 37 business establishments per 1K population compared to 23 for Memphis. Memphis needs approximately 4,000 more small business establishments to power the local economy, to be competitive with those municipalities, with far less establishments per 1K than Nashville, like Knoxville with 29. The former, per 1k data analysis, is informed by the Bureau of Labor and Statistics. 

Since 2012, here is a summary of LaunchTN Board approved investments for Nashville and Memphis MSAs. The “COMPANIES” column is the number of companies that have received LaunchTN investments and just happens to also coincide with the number of business establishments per 1k in Nashville. See data:

Interestingly, from the raw data referenced at the end of this blog, 12 of the 37 Nashville companies have no corresponding private investment while being accompanied with $11.2M in public LaunchTN investments. Ingram’s Bottorff’s NuScriptRx is one of those companies, while also reporting no retained or newly created jobs. What can you say. Its a Nashville Gang Bang…..

At the same time, with the exception of Second Keys, which just received $150K from LaunchTN, Memphis six other companies have accompanying private investments to go along with their LaunchTN investments. 

At any rate, a whole host of folks need to be concerned with the lack of funding coming into Memphis for small business from LaunchTN. Folks like Mark Yates and Roby Williams of the Memphis Black Business Association or even the Society of Entrepreneurs need to be concerned. All of this makes one wonder, what the hell is up with Epicenter ? After all., Epicenter is the designate local network partner of LaunchTN. 

Knock, Knock, Anyone at Home Epicenter ?

Based on my analysis of Memphis data, corresponding public policy and lack of economic development course correction, the decline of the local Memphis ecosystem, seems to be an intentional, elitist and corporate socialist design for decline and sell of the Shelby County taxpayer. I can’t find any data to refute that conclusion.  

To further confirm this, its just damn strange to see Epicenter Board Chairman and Memphis Chamber Board officer, David Waddell, writing a glowing editorial in the Tennessean on the Nashville Economy. One would assume Waddell serves on the Nashville Chamber, not the Memphis Chamber. C’mon Man !

And further, Richard Smith served on the LaunchTN Board for 4 years up until last year and Calvin Anderson and Waddell currently serve on the LaunchTN Board. Are you serious ? Only $1.5M from LaunchTN?

Waddell and Anderson should tell Rolfe and LaunchTN not to give the Ingram crew another cent, ever. Because they don’t need it ! And also tell, LaunchTN not to give the Nashville MSA another cent until Memphis gets $30M, based on a higher level of need. 

In the meantime, I hope to see the Memphis Black Business Association come alive as well as the Society of Entrepreneurs in public forums….. 

REFERENCES

LaunchTN Incite Investments

LaunchTN Impact Investments

BLS QCEW

Tennessee has a problem and its sucking the life out of Tennessee’s largest county. The problem is corporate socialism, as evidenced by an excessive 512 property parcels under payment-in-lieu of tax (PILOT) contract in Shelby County. 

The excessive number of PILOTs in Shelby County is a policy product of Fred Smith’s and Pitt Hyde’s failed FedEx/Memphis Tomorrow (FMT) 20 yr. public-private complex. The product is that of idiots and that is not rhetoric, but an assertion of fact that will be proven in the below data section. 

Why would the State of Tennessee continue to invest taxpayer money, that is indeed desperately needed in a Tennessee, Shelby County community in need, with the same people and failed FMT public-private complex?

In this way, in a Tennessee impoverished community in need, State of Tennessee taxpayers work to fund community betterment in Shelby County, only to have it transferred away from local Memphis/Shelby public investments, to local and foreign corporate/real estate interests that need it least ! 

The FedEx/Memphis Tomorrow complex is a 20 year Un-American corporate socialist experiment, that has failed Tennessee taxpayers in Memphis. And its failure, is a curriculum development opportunity ripe for History, Civics and Economics texts throughout the United States. 

I am just a grassroots taxpayer advocate and I want to confront Fred Smith and Pitt Hyde, or their best bureaucrats, in public TN General Assembly Committee testimony, at which time they will be publicly destroyed. 

After all, Memphis has steadily declined over 20 yrs without an external event, with the largely taxpayer funded FMT complex, down in all of their selected community betterment categories. How is that even done, unless it is intentional ?

Lacking most in Memphis, is thought diversity, where community decline, has been normalized under the FMT complex. When using taxpayer dollars, most glaring is the lack of course correction that occurs within the elitist and racially diverse FMT public-private complex, all while the same people are rewarded for running the community into the ground. 

Having worked in imperfect communities across the country, where they course correct, the general acceptance of community decline and lack of course correction in the Memphis public domain, is what garnered my attention, that something was dreadfully wrong in Memphis. The local Memphis press does not question the FMT complex nor does the public University of Memphis. In fact, the University of Memphis, under the new local Board of Trustees, in many ways, has become a planning bunker for the extension of corporate socialism. 

The University of Memphis is oddly partnered with the local Industrial Development Board (IDB) in the Memphis/Shelby Economic Development Growth Engine (EDGE), where they routinely publicly endorse taxpayer losing incentives and suppress economic development policy measurement. This suppression would seem uncharacteristic of a public university exercising independent thought leadership. But, then again, the UofM Board of Trustees is representative of the failed FMT complex, where 3 of the 9 Board members have direct connections to FedEx. 

Additionally, The UofM is partnered with Greater Memphis Chamber of Commerce, The Memphis Shelby Crime Commission (MSCC), the anonymous donor created Daily Memphian press publication and of course FedEx. The MSCC, in partnership with the UofM Public Safety Institute, recently failed to produce any police use of force data, which was part of their data driven policing charge.

With the former partnerships, public university thought leadership for societal betterment, is seriously compromised if not impossible. And if that is not enough, the UofM recently bullied local taxpayers, in an impoverished Memphis community in need, out of $5M for tennis courts and swimming pools. 

As for local public officials, which includes the Shelby County Legislative Delegation, they accept all that they have known, for the past 20 yrs, in community decline. Living in a bubble and institutionally sheltered from reality, local leaders know Fred Smith and Pitt Hyde as economic development “visionaries”. Smith and Hyde are not even revisionists. Their complex has routinely failed to course correct over the last 20 yrs. 

Similar to the Crump Machine of days gone by, The Elitist FMT complex consists of a web of public-private nonprofits and boards to include the local social justice apparatus. Hijacked by the elitists, the overamplified Memphis social justice complex, seems to have been used to divide taxpayers along racial lines, while the corporate elitists undermine the local tax base and tactically weaponize social justice efforts against a majority Black community in need through failed economic progress. 

While there are exceptions, anchored by the National Civil Rights Museum, the Memphis establishment social justice complex is, for the most part, pageantry and a tourist attraction. Its a failed complex that should be disregarded in the consideration of public policy. The problem is not systemic racism in Memphis, as is often touted, but runaway corporate socialism carried out by a closed, elitist and racially diverse public-private complex. Its just like the old Crump Machine, but much more racially diverse.  

The focus should be on the taxpayer. And to that extent, without taxpayer justice, in a majority Black community in need, there will be no social justice. 

And again, according to the State of Tennessee Comptroller report, Shelby County has 512 parcels under PILOT contract, with other Tennessee municipal counties in Davidson at 35 contracts, Hamilton-37 and Knox-68. PILOTs are supposed to incent increased wage growth through job creation and attracting new residents.

One would think, with 512 PILOT contracts, Shelby County growth would be off the charts when compared to the other Tennessee municipalities. But that is not the case. Let’s review the data to see the failure of corporate socialism.

The Data of Corporate Socialism

The above 2010-19 table, sourced from the United States Bureau of Labor and Statistics (BLS) Quarterly Census of Employment Wages (QCEW) program, shows Shelby County with 512 PILOT contracts, trailing all Tennessee municipal counties in every economic development category.

To be fair, the following data observations will be benchmarked against Knox County, which is a respectable third in Tennessee municipal economic performance, to arrive at deficiencies in public investments, that come as a product of corporate socialism. 

Small Business. For starters, corporate socialism has stifled commerce in Shelby County. While unfortunately, pro-corporate policy is often mistaken, in political circles, as being pro-business, that is not always the case. Most telling, is the number of business establishments per 1k population in Shelby County with only 23. 

With most establishments as small, Shelby County lacks the small business horsepower to drive competitive economic progress. Had Shelby County had Knox’s 28 per 1K business establishments, that would equate to 4,600 more small business establishments. Assuming 10 employees per small business at $50K in wages, that would equate to 46K more employed and $2.3B more in local annual wages. The $2.3B fully accounts for the deficiency in total wage growth of 10% at Shelby County’s 29.7% compared to Knox’s 39.9%, while using base 2010 total Shelby County wages of $22B.

Assuming 3% of wages makes it back into public coffers, $2.3B in deficient wage production from the small business sector, is $69M per year. And considering the $50 of $100M in excessive annual tax incentives, since 2010, while prorating the $69M per year down by 50%, within an improving business cycle, that would  equate to $760M in deficient local Shelby County public investments. Deficient public investments erode the societal framework in which commerce thrives.  

Employment. Employment growth was slowed in Shelby County by a botched workforce development system under the FMT complex. The botching was further enabled by the Tennessee Higher Education Commission’s  (THEC) poor oversight of the LEAP Grant in 2014-16. The failure of the grant to deliver for Tennessee taxpayers was later revealed in the Complete Tennessee: Room to Grow Report.

The report stated that in the Memphis Region, “Institutions voiced concerns about understanding the region’s labor market priorities.” That was a core deliverable of the LEAP grant that never has materialized. As a consequence, a botched and disconnected workforce development system remains, under the FMT complex of Smith and Hyde. 

Had Shelby County had Knox County’s employment growth, that would have equated to 15,921 more filled jobs and at $50k per year, $796M more in annual wages in 2019. Between 2010-19, prorating down the $796M in wages by 50% per year, that would equate to $3.6B more in wages and $108M more in local tax coffers. 

Total Wages. In isolation, total wages is an aggregation of all of the above variables. Small business and employment growth were reviewed more closely, because they are the core contributors of the sluggish Memphis economy. 

At the same time, had Shelby County had Knox’s wage growth of 39.9% and starting from a base of $22B in total annual wages, that would have been $10B more in wages from 2010-19 and $300M more in tax revenue. Add the $450M in excessive incentives that occurred in the same period, and the result is a $750M local public investment deficit. 

Conclusion

Since 2010, with $750M in deficient public investments, regardless of what the FMT complex may roll out, the public destruction of corporate socialism is on full display and will take years to overcome if at all. 

To that extent and since it is not going to come from other Memphis sources, an assertive dissenting view of Smith and Hyde’s failed experiment and public destruction needs to be formally put on the Tennessee General Assembly Legislative record. I would like to put the former on the legislative record, at which time the FMT complex will be permanently destroyed. 

After all, history says the Crump Machine was brought down at the State level. The FMT complex, in many ways, is just a reincarnation of the elitist Crump Machine, which is all that Smith and Hyde really know. And besides, based on Blackjack Smith’s advice, one needs to leverage history to make their case. And, with the above, the case is profoundly made, while leveraging history, against Smith and Hyde’s corporate socialism.

On the record legislative testimony will provide support for the update of curriculum materials for History, Civics and Economic texts throughout the country, to document the failure of Un-American corporate socialism. Its a  failed system that continues to defecate on Tennessee taxpayers today and should be immediately destroyed.   

I hope to see you in the 2021 legislative session. 

In a sustained and horrific occurrence, rich with pageantry and hijacked by the Elitists, the Memphis social justice complex is a complete failure. Why wouldn’t it be? In large measure, the Memphis social justice complex is part of the FedEx/Memphis Tomorrow and racially diverse public-private complex. 

An impressive historical attraction, the National Civil Rights Museum (NCRM) was established in 1991. But what about the local movement? There really isn’t one for improving the quality of life for a majority Black Memphis community in need.

Since 2010, Memphis MSA counties, outside of Shelby, collectively have dramatically outpaced Memphis and Shelby County’s median household income growth. Those collective counties are: Crittenden, Fayette, Tipton, Benton, Marshall, Tate and Tunica

Meanwhile, the seemingly overamplified Memphis social justice effort, that drowns out pursuits for example, around taxpayer justice, focuses on police reform and symbolic endeavors like moving statues and changing street names. In this way, police get, not part but all of the blame for societal ills. 

With high Black poverty levels and sluggish median household income growth, for there to be no critical examination of economic policy, seems to be an Elitist design for decline. Its a design that affords an exhaustive and public critical evaluation of police, while looking the other way as excessive corporate/real estate incentives roar for the benefit of the small few.

Just taking a look at the NCRM Board  may provide clues of an elitist hijacked Memphis social justice movement. The NCRM Board includes: First Tennessee, Pittco, FedEx, Kemmons Wilson Companies, Auto Zone, Sun Trust, KBG Technologies, Baptist and Methodist hospitals. 

Anyway, in 2008, I did some work in Raleigh, NC. It was a different world than Memphis. Focused on the customer taxpayer, Raleigh just seemed to be a diverse community working to make things better for all. Race was hardly an issue there and it certainly was not part of almost every public discussion. 

And on another note, I spoke to an old friend, not long ago, that moved from Memphis to Desoto County, MS. He said, “Memphis is archaic. It seems caught in the past. Sure race comes up here in Desoto County from time to time but its far from a focal point.” All that to say, the City of Raleigh, per the 5 year Census averages, has an 18.6% Black poverty rate and Desoto County, MS. 11.6%.

Lets look at some more regional median household income data: 

Memphis MSA Regional Median Income – 5yr Census Estimates

As shown in the above table, Memphis MSA Counties outside Shelby County had increased Black median household incomes of 25.1%  from 2010-18 compared to 5.2% for Memphis and 10.1% for Shelby County. The MSA outside Shelby percentage gain is weighted by county population, to be a collective percentage growth for all of the MSA counties outside of Shelby. Individual county growth can be seen in the table at the end of this blog. 

This blog could care less about race. But it does care about taxpayers. And in a majority Black community in need, increasing Black household income is paramount to improving the quality of life for all in Memphis and Shelby County. 

But sadly, in a horrific hijacking by the elitists, the Memphis social justice movement, is far removed from a quality of life focus, while looking the other way on matters of economic development policy and compliance. Taxpayer justice advocacy by this blog, and not social justice,  is why Nike raised their wages recently resulting in approximately $5M in annual wage increases while not costing Memphis/Shelby taxpayers a penny more. 

Without taxpayer justice, there will be no social justice. Forget it. And nobody systemically botches their workforce development system. NOBODY !

Conclusion

Other communities seem much more focused on taxpayers, without the overamplification of race in every issue. The overamplification of race in the Memphis discourse, at the expense of taxpayer advocacy, appears to be an elitist tactic to divide the community along racial lines, while the small few benefit. In the end, it tragically fails for all. 

The elitists don’t want anybody to make any money in Shelby County. In a nightmare scenario, the elitists just dismiss the resident population and taxpayer in a Memphis community in need. Anecdotally, that was shown, when the local realtors got beat out of their commission on the FedEx Downtown deal. And I personally experienced it, when Fred Smith and Pitt Hyde ripped off my small business in their quest to botch the workforce development system. 

Further, Census sourced data verifies this assertion with those outside of Shelby County, but in the Memphis Metropolitan Statistical Area (MSA), having a higher median household incomes. Those counties outside of Shelby County, but in the Memphis MSA include: Benton, Crittenden, Desoto, Fayette, Marshall, Tate, Tipton and Tunica counties.

This is a one hell of a note, with 512 parcels under payment-in-lieu of taxes (PILOT) contract, according to the State of TN Comptroller. 512 PILOT contracts is 200% more than the other municipal counties in Tennessee in Davidson, Knox and Hamilton counties, who all together, have 140 PILOT contracts.

PILOTs are an economic development tax abatement tool that promised higher wages and quality of life to Shelby Countians. But instead, excessive PILOTs have turned out to be a wealth transfer vehicle for the elitists, occurring on the back of a majority Black community in need, while insufficient income conditions persist in Shelby County. 

Insufficient Memphis and Shelby County incomes help explain declining neighborhoods as found in Orange Mound.  The Memphis elitists really know how to do it. Excessive PILOTs, along with insufficient incomes, insures the undermining of the tax base and neighborhood decline. Let’s look at the data. 

Median Household Income

First, pre COVID,  the highest wages and 80% of the filled jobs in the Memphis MSA are in Shelby County. And 80 to 90K commute daily to work in Shelby County from within the MSA. So, the higher median household incomes (MHI) are being supported by businesses located in Shelby County. The above data are the MHI averages from 2010-19. 

With that stated, the above data, derived from sourced Census data, reveals those  households from outside of Shelby County but within the MSA, have a 40.6% higher MHI than Memphis and 12.4% higher than Shelby County. Blacks and Non Hispanic Whites, outside of Shelby County, have higher MHIs than those of Memphis, while Blacks from outside Shelby County have 5.1%  higher MHIs than those in Shelby County. 

Could it be elitist geographical bias against Shelby Countians? Sure it could, based on both anecdotal and Census data. The elitists seemingly don’t want folks making any money in Shelby County. Or could it be a workforce issue ? It could be a workforce issue. Other communities do not systemically botch their workforce development system like the elitist in Shelby County. Either way, lower MHIs for Shelby Countians is a product of runaway elitism occurring on the back of a majority Black community in need. 

Below are the populations supporting MHIs in Memphis, Shelby County and MSA counties outside of Memphis. 

Conclusion

 What can you say? Its an elitist led design for decline with excessive tax incentives and insufficient incomes for Shelby Countians.  

The most recent publication of the University of Memphis Poverty Fact Sheet seemed rushed. And there remains significant questions with some stunning underlying statistics that drove the change, like a single year decrease of 38K Memphis Blacks in poverty. Do what ?!?!

Recent reporting by the UofM partner, in the Daily Memphian, cited greatly improved poverty statistics forthcoming in the now released Poverty Fact Sheet. This coincided with further local reporting of a new UofM / Greater Memphis Chamber partnership. The challenge with such reporting, without deeper analysis, is that it may unfortunately protect the directional status quo of locally deficient economic development efforts. 

Used widely, the Poverty Fact Sheet is a a healthy local innovation by Dr. Elena Delavega of the University of Memphis. Delavega first produced the Fact Sheet in 2012, prior to the 2016 installment of the new largely local corporate UofM Board of Trustees. 

Seemingly rushed, with barely released Census estimates, the math in the Daily Memphian article, pertaining to City of Memphis poverty statistics, made no sense and social media erupted. The article stated a 21.9% improvement in the City of Memphis poverty rate with subgroup percentages not supporting the overall increase.

Folks naturally had questions, regarding a drastically improved poverty rate with no great inflow of new jobs or meaningful uptick in average wages (BLS) and virtually flat local tax revenues Pre-COVID.

Again, without the visionary innovation of the Poverty Fact Sheet by Dr. Delavega, this blog would not be happening nor would many local conversations regarding poverty. But the drastic improvement in the poverty rate, as mostly stagnant conditions persist, led this blog to search for answers.

And the answers are in the United States Census data that Delavega uses for the Poverty Fact Sheet. At the same time, this blog could not find agreement between the published Census data and the population data in the Delavega Poverty Fact Sheet for the City of Memphis, Shelby County and MSA. Perhaps there is a rationale for this discrepancy.

On the other hand, the poverty rates from the Census data, as contained in this blog and the Poverty Fact Sheet, match up. With that stated, could  Dr. Delavega, please provide the population figures used to calculate the poverty rates to this blog ? Let’s see what is in the data:

Memphis Poverty Data

The below values are taken directly from the 2018-19 Census tables. The percentages are externally calculated values from the Census provided data.

Based on the United States Census Data above and shaded in black, drastic improvement in the City of Memphis Black poverty rate, drove rate improvement for all of the City of Memphis, County and Tri-State MSA region. Primary findings from the data are above and summarized below:

In 2019, Blacks in poverty in the City of Memphis decreased by a whopping 37,749 from 141,980 to 104,231. The Black poverty rate in Memphis decreased by 22.7% from 33.8% to 26.1%. The 37,749 drop dwarfed next in line in Philadelphia, which had an 18K decrease in Black poverty and has about a 50% larger Black population than Memphis. The drastically lower Black poverty population is the numerator in calculating the percentage poverty rate. 

From 2010 to 2019, the 2019 38K City of Memphis decrease in Black poverty, dwarfed all cities with large Black populations. Based on cities with at least 100K in Black population and 30% Black, the next greatest decrease, was again The City of Philadelphia in 2017 at 22.6K and Chicago at 20.4K in 2018. In fact, the 2019 City of Memphis decrease of 38K dwarfed even the entire Philadelphia MSA at 27.5K which has a Black population 3 times the size of Memphis at 1.2M.

In 2019, City of Memphis Black Population decreased by 20,913 or 5%, from 420,403 to 399,490. White population in the City of Memphis increased by 16,078 or 9.1%, from 177,118 to 193,196. The County only shows losing 4,364 in Black population. The lower Black population is the denominator in calculating the poverty rate. 

While the rate decreased for Whites, the actual number of Whites in poverty increased in Memphis by 1,469.

The Hispanic poverty rate increased by 1.1% in Memphis, while falling in the MSA. 

Shelby County Data

The below values are taken directly from the 2018-19 Census tables. The percentages are externally calculated values from the Census provided data.

Again, the Shelby County data, was largely driven by The City of Memphis data. 

Memphis TN-AR-MS MSA Data

The below values are taken directly from the 2018-19 Census tables. The percentages are externally calculated values from the Census provided data.

These are some concluding findings regarding Shelby County and the MSA:

While the Hispanic poverty rate increased for both Memphis and Shelby County, it decreased in the MSA by 7%,  from 23.5% to 21.9% 

After Memphis lost 21K in Black population, Shelby County lost 4,364 and the MSA 2,351. That implies that Blacks moved out of the City of Memphis and remained in the County or in the MSA. 

This above implies that approximately 16.5K Blacks moved out of the City but stayed in the County while another 2K moved into other parts of the MSA outside of Shelby County and 2.5K moved out of the MSA altogether.  

Below are statistics for populations outside of Memphis. 

Shelby Residents (Outside of Memphis)

This table contains externally calculated values derived from the 2018-19 Census Estimates.

Memphis MSA Residents (Outside of Shelby County) 

This table contains externally calculated values derived from the 2018-19 Census Estimates.

Median Income

The below values are taken directly from the 2018-19 Census tables. The percentages are externally calculated values from the Census provided data.

Shelby County (Not In Memphis)

This table contains externally calculated values derived from the 2018-19 Census Estimates.

Memphis MSA (Not In Shelby County)

This table contains externally calculated values derived from the 2018-19 Census Estimates.

Memphis MSA vs Memphis/Shelby Median Household Income

Conclusion 

Drastic changes in calculated rates, of any sort, most often need the underlying values to explain the causes for drastic changes. Without it, taxpayers and policymakers will potentially be misinformed. 

One of the community products of the University of Memphis Carnegie R1 campaign is tanking Shelby County post-secondary completions. This occurs under the local proclamation that workforce development is the #1 priority. 

Total Shelby County post-secondary completions were down by 895 or 7.7% from 11,692 to 10797 year over year in 2019. And that comes as Shelby County is at the bottom of the peer group in post-secondary completions per 1k population. Below percentage average employment gains, can be shown to cost Memphis/Shelby taxpayers $147M since 2010 with recurring annual losses at $32M.

Further, another bi-product of the UofM Carnegie R1 campaign, are local grants for elitist tennis courts and swimming pools. These grants are in addition to the recent taxpayer losing Poplar Plaza PILOT that the UofM co-sponsored. 

A better use than tennis courts and swimming pools of those funds, would have funded $500K per year for wrap around services to support disadvantaged students while accelerating and increasing completion rates in the community college system.

Besides, the City of Memphis provided the land for the tennis courts and there was significant private funding for both tennis courts and swimming pools at the UofM. But runaway elitism won out, while post secondary completions tanked.  

Post Secondary Completion Data

A survey, using the Integrated Post-Secondary Education Data System (IPEDS) was conducted against 14 national and 4 in-state peer communities to include Shelby County in a ranking of 19 total communities. Those communities are listed at the end of this blog. 

Shelby County ranked last in enrollment and completions per 1K population. Additionally, percentage change rankings for each of the communities for 4 years and 1 year were compiled. Shelby County ranked 11 and 17 for completions and enrollment 4 year percentage change. And 19 and 10 for 1 year percentage change for completions and enrollment (above table).

To competitively fuel the talent pipeline for economic development purposes, Shelby County needs to reside near the top of peer rankings and not the bottom for some years to come. 

As far as post-secondary completion award levels percentage change rankings, those statistics are immediately above. 

Conclusion

Without a connected workforce development plan to fuel economic development, the low post-secondary completion rankings are likely to continue, while the same small few, continue to botch the workforce development system. 

Peers Surveyed

Birmingham, Charlotte, Chattanooga, Cincinnati, Greensboro, Indianapolis, Jacksonville, Johnson City/Tri Cities, Kansas City, Knoxville, Little Rock, Louisville, Memphis, Nashville, New Orleans, Oklahoma City, Omaha, St. Louis and Tulsa

Shelby County commercial vitality lags its peers due to an insufficient number of business establishments with employees. In fact, according to census data, to catch below average Birmingham, Memphis would need 4500 new business establishments with employees. 

While the greatest opportunity to increase establishments resides in the Black community, with a gap like 4500, Shelby County cannot be choosy. Sadly, local MWBE programming is of little help for very small locally owned businesses like mine. These are the type of new businesses that are needed to come online to increase the number of local establishments with employees. 

At the same time, local MWBE programming is an elitist sham. Its a true statement, that one can inherit a highly established business, like Duncan Donuts Williams has done, while your mother maintains controlling interest and qualify for local MWBE participation. Or, one can retire as a senior executive from your family owned corporate holding company, as Kathy Buckman Gibson (KBG) did, and start a woman owned business enterprise and qualify for local MWBE participation. Even out of town companies due quite well, in the local business space to even include Canadian companies based in Tennessee. 

In reality, these folks business interests are going to do just fine without help from local MWBE programming. On the other hand, my small LOSB doesn’t even qualify for EDGE’s local business program that disallowed LOSBs in 2016. EDGE just released their latest MWBE propaganda piece, showing massive overperformance. So after years of MWBE programming and such overperformance, why is Shelby County commerce lagging so badly ?

This is Why Its Lagging

The real reason that commerce lags in Shelby County is because local elitists don’t support small business. This condition necessitates the need for government “programming” that is then, not surprisingly, again highjacked by local elitists. The 2011-19 EDGE report provides insufficient detail on what is really happening by not showing the distribution of MWBE receipts. Maybe Commissioner Van Turner, who is Commission MWBE Committee Chair, might want to know what is really going on. Then again, he may not. 

Here is what is happening. Based on a survey of EDGE’s 2016-19 Local Business Program (LBP), 25 of 385 or 6% of the MWBE companies controlled 83% of the receipts. Of the $163M in MWBE receipts from the 2016-19 LBP, the top 25 of 385 companies took down $136M in receipts. The top receipt generator was KBG, with the top 25 companies being highly established local firms with an average business life of 33 years !

And some of the leading MWBE receipt generators are not even based in Shelby County ! See below:

This type of elitist programming is not going to move the needle with a 4500 firm gap to catch the next below average peer of Birmingham. Additionally, one easily can see what happened when EDGE ended LOSB participation in their local business program in 2016. Highly established businesses, just piled into WBEs. See graphical representation below:

Conclusion

The only way to increase commercial vitality is for an all hands on deck support for local small, less established business and startups through increased transactional velocity. The local effort always seems to be on raising capital, business planning advice and expos and not transactions. 

As far as MWBE and LOSB programming, that needs to be prioritized for businesses with the need and startups. Not the type, Epicenter and UMRF are focused on with sights on going public but small businesses that build commercial vitality. And yes, right sizing PILOTs will help as well, as small business depends on public resources for success. 

After all, at least with Shelby County Government, one can be a $100M WBE or MBE company and participate in MWBE. Something is wrong with that and apparently leads to only a few companies dominating MWBE receipts……

Please keep in mind, at one point, the blackboard was a new “technology”. However, with respect to the tech tsunami, “computer” technology will continue to increase into all industry sectors, while soft skills, reading, writing, math and computer technology are all basic skills. 

To that extent, computer technology will evolve and become more industry specific. Given this coming technological specialization, regional economic development efforts will need to ride the tech tsunami through industry specialization. Agriculture or AgTech in Memphis is an example of a qualified economic development industry growth target.

From a talent pipeline development standpoint, as a common language staple, industrial occupational demand should drive educational programming and academically aligned career planning for ALL students. Common language communication between professionally diverse stakeholders, as informed by data, is the bedrock that supports regional workforce development implementation.

Unlike other areas of the country that are struggling with an aging workforce, Memphis has an economic development asset in its youthful population when compared to municipal peers. Unfortunately, this economic asset has been systemically ignored in Memphis, through disconnected workforce development programming while not prioritizing the community college system.

As communities throughout the country prioritize their local community college system to accelerate and increase post-secondary completion rates, Memphis instead, has prioritized its 4 yr University of Memphis (UofM) public university.

Evidence of this comes in the form of local appropriations for UofM tennis courts and swimming pools, while the UofM partners with the local EDGE industrial development board and advocates for taxpayer losing tax abatements. These actions negatively impact local educational funding and come after the 2016 installation of a local corporate UofM Board of Trustees. 

Sadly, this is a strategic economic development nightmare and miscalculation of MAMMOTH proportion. As a result, post-secondary completions fell in Shelby County by 827 or 7% in 2019. This reveals that Memphis is not strategically leveraging a key economic development asset in its youthful population. And this decline in completions is not good when Shelby County resides at the bottom of their peer group in post-secondary completions per 1K population.

Conclusion and Solution

So, an overall solution to riding the tech tsunami, is a demand and data driven curriculum, that informs common language supported career planning and skill development in the academic curriculum.

Based on regional occupational demand data, the curriculum naturally promotes alternatives to 4 yr degrees to accelerate and increase post-secondary completion rates. This promotion will better satisfy labor market demand as shown in the above “Success in the New Economy” video. Watch for the 1:2:7 ratio in the above video.

And finally, funding wrap around services for disadvantaged students should be prioritized to help increase completion rates as opposed to university tennis courts and swimming pools. The former alternatives would further promote career pathways that include 4 yr degrees and beyond as part of a lifelong learning continuum.