Memphis Tomorrow is a national embarrassment while proliferating deficient leadership practices throughout the Memphis community. In fact, using percentage analysis, the internal disaster of Hurricane Hack of Memphis Tomorrow can be shown to be more catastrophic than the $161B external natural disaster of Hurricane Katrina costing Memphis an estimated $13.5B in gross domestic product (GDP) since 2001 when compared to New Orleans.

Content with decline for almost 20 years, the Memphis Tomorrow CEO organization sets the standard and is down in all of their community development categories, while their initiatives feast upon your federal, state and local tax dollars. Since the founding of Memphis Tomorrow in 2001, Memphis has declined without an external event while not being good for anyone to include the overall business community.  Memphis is last in peer GDP growth, behind New Orleans since 2001, as the heavily taxpayer funded economic development complex goes institutionally unmeasured in Memphis. See GDP analysis section.

While the skills gap gets most of the attention, the leadership gap in Memphis is paramount. New generation leaders don’t practice legislative or press oversight of the Memphis Tomorrow complex. Social justice and economic development organizations don’t independently author and advocate policy solutions to confront community imbalances. And the university complex is impotent on matters of research based measurement to inform course correction.

The leadership gap is paramount where, because decline is all they know after almost 20 years of Memphis Tomorrow, local Memphis leaders only know systems of decline and don’t seem to know how to course correct to evolve the Memphis ecosystem. And there is no sense of urgency, in no economic development plan after some 8 years or a transit funding solution after 3 years.

Deficient Silver Spooner Leadership Modeled 

Meanwhile, just as one feels entitled to draw their next breath, silver spooner elitist hack brats in Fred Smith and Pitt Hyde (Hurricane Hack) have felt entitled to botch the workforce development system over five years, rip off local small business solutions to address community problems while allowing local solution export to foreign or out of town entities, as the economic development complex feeds on a community in need with excessive corporate/real estate incentives in an already low business cost environment. The excessive incentives occur while justifying them with bogus projection accounting. So as designed, the ecosystem declines while wrecking economic growth as new leadership sadly views the hacks as community visionaries.

That is why the question is posed, “With an eye on GDP, as an economic developer, which would you prefer  – A. Hurricane Katrina or B. Hurricane Hack?”. If you guessed, A. Hurricane Katrina, you are right. The external event of Katrina is less costly than Hurricane Hack of Memphis Tomorrow that has comparably stagnated Memphis economic growth over almost 20 years while instituting systems of decline.

One would think that Smith, a history fan, might know that rigged systems don’t work in a free enterprise system and would appreciate some level of needed dissent in the system. But Smith might not know his history or if he does, he certainly does not appreciate the application of history. The fact is that the leadership gap, as modeled by the Memphis Tomorrow complex, is the most costly gap.

Its a costly gap, that as a matter of closed system process, the complex feeds on and dismisses their own people, thinking they can evolve the ecosystem without them. They shut out their own people as they launch one new initiative after another within a sea of event pageantry. The leadership gap leaves Memphis without the vital footing to compete in the global economy.

Lacking press and legislative oversight and university complex thought leadership won’t work in any community while the leadership gap explodes in Memphis resulting in a design for eosystem decline.

Gross Domestics Product (GDP) Data 

So why would an economic developer prefer Hurricane Katrina over Hurricane Hack?  Well, its in the Bureau of Economic Analysis data. Since 2001, when Memphis Tomorrow was founded, Memphis is last among 16 peers in GDP growth and trails New Orleans who suffered a catastrophic external event. Katrina hit New Orleans in 2005. Prior to Katrina, New Orleans was exceeding the peer average in GDP growth and as shown in the chart below, GDP dipped significantly following Katrina.

At the same time, after almost 20 years, New Orleans GDP growth still exceeds Memphis. So, in this analysis, a catastrophic Katrina would be preferable to Hurricane Hack of Memphis Tomorrow that never leaves and has institutionalized rigged system decline resulting in the leadership gap.

Based on a percentage analysis, Hurricane Hack is $13.5B more costly than Hurricane Katrina in impacting GDP resulting in an estimated $5B in total wage loss and $150M in deficient tax revenues since 2001. The problem is this type of analysis is unknown in the disconnected from reality bubble of Memphis where fantasy $19B capital investment promises take center stage while distracting from reality and the work of economic growth.

See spreadsheet analysis and see below charts/tables where arguably a Memphis trendline of stagnating corporate socialism is revealed.

The below chart shows the relationship between Memphis GDP growth and that of the peer average and Nashville. Nashville soared upwards from 2011 at the same time EDGE was created. EDGE is a Memphis Tomorrow Fast Forward initiative that has authored bogus projection accounting and excessive corporate/real estate PILOTs for the benefit of the small few while feeding on a Memphis community in need.

Further, while Memphis formerly competed against Dallas and Atlanta, even new peer cities that once trailed Memphis in total GDP in Oklahoma City, Jacksonville and Louisville have surpassed Memphis in total GDP. Of course, no one in Memphis is going to know this, as the Memphis economic development complex is unmeasured and unchecked, leaving Memphians ignorant while sheltered in a bubble.

Based on a percentage analysis, when compared to the peer average, Hurricane Hack has resulted in $131B in lost GDP, $49B in lost wages and $1.5B in lost tax revenue since 2001. Further, annually recurring total wage deficiencies have accumulated to an estimated $6B, resulting in $180M in recurring annual tax revenue shortfalls from deficient below average GDP growth since 2001.

See below chart and see here to access excessive tax incentive data which are justified with EDGE bogus accounting.

Conclusion

Hack spooner elitism is the root cause of community decline where Memphis has declined without an external event, while Memphis Tomorrow sets the standard resulting in the leadership gap. The solution is community education. But with the university and investigative press out to lunch in Memphis, that is likely not going to be facilitated from these more traditional sources that actually serve other communities.

While other communities have been doing the data driven work of true economic development, the Memphis Tomorrow complex has been feeding on its own people within a closed disconnected from reality social construct that has nothing to do with data driven economic development. All the while, they market  their efforts as economic development within a design for decline framework where the greatest casualty is leadership leaving a leadership gap and a community without the footing to compete in a global economy.

Other solutions include incentive reform, transit funding, a connected workforce development system and increased legislative and press oversight. This blog is on published and legislative record with specific solutions of the former. If you have questions regarding specific solutions, please email me at jkent@pathtrek.net

I wonder if Paragon Bank addresses the leadership gap in their economic talk on Tuesday 9/17/19 ? We will see…..

The basic lie that we all learn not to do in Kindergarten underwrites the Memphis decline. Beyond acceptable common puffing or hyperbole, lying, decpetion and gross misrepresentation routinely occurs with for example the better tomorrow promised by Memphis Tomorrow or the EDGE Scorecard. The EDGE Scorecard is nothing more than a platform designed to justify excessive corporate/real estate incentives for the benefit of the small few while EDGE takes in fee revenue.

And sadly, lying is institutionally  enabled by the local press, legislative bodies and in partnership with the University of Memphis of all places. It would seem that the Memphis community could depend on the UofM to use their vast resources to speak up for a community in need to drive economic development. But as an EDGE partner, lying is enabled by the UofM, through a lack of measurement and voice, further creating a platform for exacerbating community imbalances.  But, oddly, lying seems to persist even when unneeded.

Great Project – Why Lie ?

The recent Bluff City Law project, a winning project, is an example of EDGE lying when its entirely unnecessary. First, a $1.4M abatement makes sense in attracting the local production of a national network series. All that is needed to make the project inviting is a 2-3x benefit of $2.8 – 4.2m in tax revenue generated which would translate into a $100-150M economic impact.

But EDGE is estimating a $1.7B economic impact from 10 episodes of Bluff City Law. Why the lie? The series of Nashville is often used as a best practice reference. Using the statistics for Visit Music City, the average visitor spends about $500 when visiting Nashville. Based on that stat, $1.7B in economic impact from Bluff City would translate into 3.4M in additional visitors to Memphis based on 10 episodes of Bluff City Law. Are you freakin kidding me ?!?! Lets do some math below.

Referencing  Visit Music City, since 2012, when 124 episodes of Nashville started production, there have been 3.7M more visitors come to Nashville. If all the credit for Music City tourism increases are generously given for The Nashville series, that would translate into approximately 30,000 per episode or 300,000 for 10 episodes.

So applying the same math for Bluff City Law, 300,000 x $500 per visitor equals $150M. $150M in economic impact x 3% tax revenue factor equals $4.5M. Here’s the message a $150M economic impact and $4.5M or somewhat less tax revenue generated works for the Bluff City $1.4M abatement. Why lie ??? And why not use a more relevant best practice reference in the project summary like the commonly referenced Nashville  ?

Conclusion

Bluff City Law is a great win. Why muck it up with a big fat lie ? Because lying is the foundational basis of a leadership complex that routinely feeds on a Memphis community in need. Kinda like the lie of  North MS and East Arkansas being top Memphis economic development competitors.

How can a City evolve and compete in a global economy while being institutionally disconnected from reality ? It can’t. Institutional lying starts at the top of the Memphis ecosystem paving the way for exacerbating imbalances in Memphis where a lack of basic values in telling the truth, advocacy and oversight have culturally normed decline over 20 years…..

The below data sets reveal excessive incentives in context with low employment growth since 2010. Excessive incentives along with unfilled jobs result in deficient tax revenues and the lack of funding for adequate transit, education and etc. Fully calculating the impact of excessive incentives combined with below average total wage growth result in $300M in deficient community investments since 2010 and $75M in recurring annual tax revenue shortfalls. $75M per year would provide adequate transit and $45M more for other needed services.

Slow employment growth. Data source Bureau of Labor Statistics Quarterly Census of Employment Wages (BLS QCEW)

With slower employment growth, one would expect lower overall incentives vs cities with more growth. Not the case. Memphis has 50% more in job incentives at $500M+ than both Nashville and Indianapolis combined at $335M.

Fewer filled jobs divided by larger incentive amounts results in high per employed job incentive amounts. Indianapolis and Nashville at $2.5k and Memphis at $14.5k. Data sources BLS QCEW, EDGE, Nashville.gov and Indianapolis Business Journal. A strict analysis here, would reveal a $400M+ excess.

This table reveals a lack of small business establishments. Business establishments per 1k population. Data source BLS QCEW. 

This is a different analysis with gross domestic product since the founding of Memphis Tomorrow in 2001 with peer rankings below. The Memphis Tomorrow CEO organization’s  initiatives are often funded with Federal, State and Local tax dollars for community economic development. The comparison with New Orleans is because they had an external event in hurricane Katrina in 2005. Still Memphis, without an external event, the GDP growth rate trails that of New Orleans that had an external event and is at the bottom of peer rankings.

Based on a percentage analysis, $13.5B in deficient GDP growth has occurred in Memphis resulting in an estimated $5B in total wage loss and $150M in deficient tax revenues since 2001 when compared to New Orleans.

Data source is Bureau of Economic Analysis See below chart and table.

This chart shows the relationship of Memphis MSA GDP growth to its peer average and Nashville. EDGE, a Memphis Tomorrow Fast Forward initiative, was created in 2011. Based on a percentage analysis, when compared to the peer average, $131B in in deficient GDP has occurred, resulting in $49B in lost wages and $1.5B in lost tax revenue since 2001.

Further, $16B in deficient GDP has accumulated since 2001 vs the peer average resulting in annually recurring total wage deficiencies of $6B and $180M in recurring annual tax revenue shortfalls from deficient below average GDP growth since 2001. $180M would fund transit and overall city/county services to an adequate level.

Memphis MSA peer rankings.

Memphis doesn’t have money for public transit due to highly deficient corporate community leadership. The FedEx/Memphis Tomorrow complex is down in every category over 20 years while using federal, state and local tax dollars.

A Memphis community in need, has been bullied from the top of the ecosystem with excessive corporate/real estate incentives and botched workforce development efforts over 5 years while further trapping people into poverty with inadequate transit. This has resulted in below average total wage growth,  $300M+ in deficient community investments since 2010 and $75M in recurring tax revenue shortfalls. This is why Memphis/Shelby does not have funding for transit.

Unfortunately, if Dr. Damon Fleming, the new Dean of the Fogelman College of Business, wanted to determine the source of inadequate tax revenues to address community transit needs, he would not be able to find out from UofM researchers. After the previous blog, that included an open letter to meet with Dr. Fleming, The Memphis Economy published a rather unhelpful blog in communicating the effectiveness of  Memphis/Shelby economic development efforts without any reference to peer competitors.

The UofM, The Memphis Economy project, unfortunately, has abandoned their peer city research platform which goes to support objective economic development measurement, while community economic development UofM advocacy efforts to confront local community imbalances, have been non-existent. This reality robs the community of an independent public university voice in community economic development matters.

The below charts document the source of the tax revenue shortfall with MATA funding solutions to follow. In short, had Memphis/Shelby had Nashville’s total wage growth rate combined with its tax incentive policy, Memphis/Shelby would have $187M more in annual tax revenues. While Nashville, in a boomtown is an unfair comparison for most cities, had Memphis/Shelby had Indianapolis total wage growth rate combined with its tax incentive policy, Memphis/Shelby would have $76.5M more in annual tax revenues.

Data Charts

The below chart is sourced from BLS QCEW. The low employment growth rate is due in large part to a botched disconnected workforce development system over 5 years and culturally stifled small business sector that has occurred in a closed economic development system while corporate/real estate policy interests have been prioritized.

Documents excessive corporate welfare culture that occurs without the benefit of local press and legislative oversight. Data sourced from EDGE, Nashville.gov and Indianapolis Business Journal with Memphis having $500M+ in job tax incentives with Nashville and Indy at $200M and $135M. At the same time, Memphis/Shelby achieved far below total wage growth of Nashville and Indianapolis while having job incentives that exceed both Nashville and Indianapolis combined by 50%. Right sizing job incentive reform would result from with 50% abatement on new capital investment only and 1% of total wages on new jobs only while maintain EDGE minimum investment and term requirements.

Documents actual cost per job as realized in the local economy. Both Nashville and Indianapolis are at about $2.5K per job while Memphis/Shelby is at $14.5K.  A strict analysis would reveal a $400M job tax incentives excess.

Funding Solutions for MATA

Its rather concerning that 3 years after funding was identified as the chief obstacle to adequate transit, none of the organizations that you would think would be concerned about the issue have proposed a funding solution. Examples of such organizations include Bus Riders Union, NAACP, NCRM, Memphis Tomorrow, Innovate Memphis, Greater Memphis Chamber, MICAH or the University of Memphis.

Here are some solutions with many of these sourced from Smart City’s recent blog. The need is $30M for adequate public transit.

Property Tax Increase – A 5% property tax increase would raise $50M and 10% $100M.

Mayor Harris – $145 Extra Vehicle Fee

Vehicle Registration Fee – $10M  There is the possibility of adding a fee to all vehicles in Shelby County. With about 700,000 vehicles, a $13 per car fee would generate the same amount of money. This is the antithesis of progressive taxation, but it would spread the pain and likely limit the political blowback. Or, the fee for each car could be staggered with an escalating scale for more cars but certainly topping out much lower than $145.

Gas Tax – Referendum $6M State law give Memphis the authority to enact its own one-cent gas tax. It would cost the average driver a moderate amount stretched over an entire year and produce as much as $6 million a year. This requires approval at referendum. While it’s not an option for county government, it’s a potential funding source.

Parking Tax– ??? Some cities, including Chicago, San Francisco, Austin, Pittsburgh, and Seattle, have taxed parking spaces based on the market rate for free parking. This not only raises more money for MATA but it could encourage more riders to use transit.

Fee on MLGW bills – ??? A fee could be added on utility bills for property owners which would be similar to the stormwater utility fee. While this could raise the amount targeted by county government, another fee on the lengthening list of fees on MLGW bills seems a volatile political option.

Adequate Facilities Taxes. Inconsistent Revenue. Over the past 20 years, these taxes have surfaced several times when county government needed revenues. It’s also known as development taxes because It’s paid on the square footage of development and is normally 50 cents to $2 per gross square foot.  These taxes are progressive since they are based on square footage. Shelby County Government abandoned previous proposals for the tax when developers howled. More to the point, development varies from year to year, so it’s impossible to depend on a specific amount.

Air BNBs – $1M

Conclusion

The imbalances are huge while the vitality to solve Memphis community problems has not materialized. Memphis is a product of corporate socialism which can only be corrected with aggressive course correction away from the dreadful FedEx/Memphis Tomorrow rigged system policy framework.

Dear Dr. Fleming,

If you want to connect to the community, meet with some non-establishment parts of the community like Memphis Raise Your Expectations (MRYE). You could follow the establishment meeting schedule of “community organizations” and never connect with the community. This blog will explore community disconnects which at times involve the University of Memphis and solutions.

Per Dr. Rudd’s remarks around “infusion new ideas and innovation“, a major innovative step would be to stop listening to Fred Smith and Pitt Hyde. If you met with MRYE, with authoritative data in hand, you would learn the following with solutions to follow:

1. Since the founding of the FedEx/Memphis Tomorrow CEO organization, Memphis has persistently declined over 20 years, without an external event, while FedEx/Memphis Tomorrow initiatives feed on a community in need as their initiatives use Federal, State and Local tax dollars. Memphis Tomorrow is down in every one of their categories of public safety, workforce and economic development.
2. Fred Smith and Pitt Hyde botched the Memphis workforce development system over 5 years while dismissing small local business solutions to address the problem while leaving 100,000 students and community in need with disconnected workforce development services costing local business and taxpayers millions. But that is what elitist do is dismiss their own people.
3.  Of $500M, over $200M in excessive corporate/real estate job incentives have been awarded, mostly to local companies, when benchmarked against other communities in Nashville and Indianapolis as Memphis achieves far below peer average total wage growth as the establishment feeds on a community in need. See blog here for references.
4.  Excessive incentives have been justified with bogus projection accounting, as documented in the local press in the Commercial Appeal and Daily Memphian by two separate sources.
5.  The Fogelman College of Business and The Memphis Economy project are enablers of decline by abandoning their peer city research measurement platform soon after the publication of this blog as they pursue Carnegie I status. Lack of funding is no excuse as the update to the measurement tables only takes a couple of hours at the most. While awarding excessive incentives costing taxpayers $20M per year and using bogus accounting, the U of M’s The Memphis Economy project has been publicly silent as community imbalances are exacerbated.
6. The University of Memphis investigative journalism partnership under the direction of Marc Perrusquia with the Daily Memphian is a complete failure as no investigative stories that question real power have been published. This may be because Pitt Hyde is a major donor to the Daily Memphian.
7. The U of M’s and Dr. Elena Delavaga’s Annual Poverty Report basically sits on the shelf without University advocacy in public legislative chambers for policy change to address community imbalances that would help improve economic development efforts.
8. The University of Memphis local economic development efforts seem to focus on chasing economic incentives around town for the University which is the only time you will see Ted Townsend in legislative chambers. You will not see Ted Townsend in legislative chambers lobbying for policy change to improve the social well being of people to address community imbalances which is probably the greatest local economic development challenge.
9. In a sheltered bubble, most local leaders are ignorant of anything else other than hack elitist systems that support community decline. Its all they really know as decline has become culturally normed as only the small few benefit. Examples of ignorant but highly educated leaders include: Jim Strickland, Beverly Robertson, Brandon Morrison, Kemp Conrad and Edmund Ford Jr. as well as others just to name a few.

Solutions

The University of Memphis should not wait to be invited to connect to the community and propose solutions. As the area’s leading public higher ed institution, they should be in legislative chambers, in a genuine sense, with the people making public comment using their research findings to address the community’s #1 economic challenge, in community imbalances. Here are some suggestions:

1. Stop listening to the hack elitist in Fred Smith and Pitt Hyde and their agents on public policy. CEOs are known to fire people for having a bad year. These guys have had a bad 20 years in the corporate community leadership space.
2. Consider listening to local corporations like Smith and Nephew and Surface Dynamics who are investing locally without economic incentives.
3. Encourage Elena Delavega to be in legislative chambers 2 times per month advocating for policy change to address community imbalances
4. Have the Fogelman College of Business submit a funding proposal for adequate public transit to support economic development efforts
5. Have the Fogelman College of Business re-establish their peer city research platform while leveraging this blog while advocating for optimal economic development policy.
6.  Have the Fogelman College of Business submit a measurable definition for economic development that ideally focuses on improving the social well being of people.
7.  Encourage Marc Perrusquia to conduct an investigative series on the decline of Memphis under the FedEx/Memphis Tomorrow complex.

Conclusion

Memphis is a failed experiment in elitist corporate socialism as advanced by the FedEx/Memphis Tomorrow complex. Its a complex that is largely represented on the UofM Board of Trustees.

It was disgusting to see Dr. David Rudd, on Behind the Headlines, do a touchdown dance on the 12-1 Shelby County Commission veto override of Mayor Harris, as the UofM has been rendered institutionally impotent on matters of community economic development as the state funded UofM’s economic development department chases down local incentives.

For the record, I’m not against some local incentives for the UofM. But not at the expense of becoming another cog in the wheel of the hack elitist establishment that has run the city in the ground over the last 20 years.

Memphis cannot afford to be institutionally robbed of a balancing voice of it’s leading public university in community affairs. After all there is no investigative reporting or rigorous government oversight of the vast taxpayer funded corporate community leadership complex. But sadly, in the work of community economic development, Memphis has been institutionally robbed under the new FedEx/Memphis Tomorrow UofM Board of Trustees.

Dr. Fleming, we would love to meet. Just give us a time and place.

A 5% property tax increase would annually raise about $50M and 10% increase would raise about $100M. A tax increase needs to be coupled with tax incentive reform and massive philanthropic ask of $500M paid upfront to change the trajectory of Memphis while bringing Memphis up to  average with peer cities.

This analysis does not consider the much lower appraised property values enjoyed by Memphis/Shelby.

Please see analysis:

With 40% total wage growth since 2010 and away from the Nashville boomtown comparisons, perhaps Memphis can learn from Louisville, a similar border, river and distribution hub city.

But it must be known, by the broader community that what happens from the top of the ecosystem in Memphis, doesn’t happen as a matter of process in other cities. Some blame it on racism while others elitism. But it’s without question, institutionalized stupidity and decline. This topic was discussed, in part, last night in a North Memphis forum hosted by Pearl Walker while referencing Memphis Tomorrow.

Other cities, with challenges, are not saddled with corporate community leaders that create fake monsters, implement bogus accounting platforms to rip off a community in need, rip off small business ideas and give them to foreign and out of town entities while botching the workforce development system over five years, kick people out of the local Chamber without cause or harass small business with regulatory authorities. All the former occurring in Memphis with the institutional support of lacking measurement, university community thought leadership, legislative and press oversight. Its a bully hack complex, resulting in the unnecessary wrecking of the ecosystem within a decline by design framework.

Louisville/Jefferson County, a city similar to Memphis/Shelby in many ways, has had 40% wage growth since 2010 compared to that of Memphis/Shelby at 26%. Had Memphis/Shelby had 40% total wage growth, that would mean $3B more in annual wages and $90M more in local tax revenues.  So are there any lessons for Memphis here? Sure, there are four lessons. Lets look at  them.

1- Regionalism

Louisville leaders are not creating fake monsters in bordering communities to scare the taxpayer into awarding excessive incentives for corporate/real estate development. They are working together as an interstate region. Memphis is not regionally working together as it even seems at times to grapple with working together as a County. The Louisville Chamber website touts their collaborative approach with “15 Counties, 2 States and 1 Community- A Partnership for Regional Economic Growth”.

It’s ironic that Memphis has invested millions in developing the regional megasite in Stanton, TN, located 40 miles away, while at the same time, awarding excessive incentives in unnecessarily competing against, what could be, regional economic development partners in neighboring states, located 10 miles away. These potential regional economic development partners help provide shovel ready sites and a ready workforce in support of regional economic development efforts.

But unnecessary division persists everywhere in Memphis, for no good reason, with at times the persistence of fake activism. Its rather remarkable to see local social justice organizations load up the buses to go and protest some punk adolescent writing the “N word” on the bathroom wall but to say nothing regarding the punk elitist that systematically feed on and undermine a community in need.  All the while, the same closed elitist establishment in Memphis benefits from persistent unnecessary division, while Memphis falls behind in the global economy.

But again, Memphis is anything but normal while other cities are working together to support small business and regional economic development efforts while competing in a global economy. As other cities evolve, some blame local history for backwards Memphis community leadership. But even a historical defense is inexcusable while everyone loses with institutionalized stupidity.

2. Small Business

Based on data from BLS QCEW, Louisville/Jefferson has 25,348 establishments with a 771k population resulting in 33 establishments per 1,000 people while Memphis has 20,764 with a 937k population resulting in 22 establishments per 1,000 people. Additionally, since 2010, Louisville/Jefferson has experienced 13% in establishment growth vs 9% for Memphis. Had Memphis experienced 13% establishment growth since 2010, there would be 690 more establishments in Memphis/Shelby, mostly small business.

3. Filling Jobs and Increasing Wages

Total wage growth comes from increased employment and wages. Since 2010 Louisville/Jefferson has increased total wages 40% and Memphis/Shelby 26% with average wages increases of 22% while Memphis/Shelby increased wages by 17.6%. And Louisville/Jefferson has increased employment by 14.9% while Memphis/Shelby employment increases lag at 7.4%. Had Memphis had 14.9% employment growth, Memphis/Shelby would have approximately 35k more filled jobs.

This lag can be largely attributed to the botched from the top Memphis workforce development system. Per the most recent release of Integrated Posy-Secondary Educated Data System (IPEDS), Louisville is producing 18 postsecondary awards per 100k of population vs. Memphis/Shelby at 13 per 100,000 population resulting in a significant gap with a real Louisville/Jefferson competitor and peer city in the global economy.

4. Responsible Incentives

While a comprehensive incentive database was not found, Louisville/Jefferson County incentives seem responsible based on a cursory review. Besides, the Louisville Chamber does not seem to make much  of a competitive deal over incentives as regional interstate incentives are promoted on the Louisville Chamber website.

Conclusion

Community education is the challenge. The local citizenry is ignorant to the fact of how far Memphis is behind in a global economy due to a deficient bully hack corporate community leadership complex that fosters low expectations, a closed system and institutional stupidity through division while feeding on a community in need.

The primary solution involves getting out of hypnotic bubble of decline and rejecting deficient divisionary corporate community leadership while waking up to the fact that the Memphis decline has been imposed from the top of the ecosystem and occurred without an external event.

Living within a sheltered bubble, the establishment keeps its resident Memphis population ignorant, while protecting the closed ruling social construct from scrutiny. This involves institutional support from a non-investigative press, rigged legislative bodies and university community impotence. This is why Memphis lacks the vitality to grow.

Local educated leaders seem ignorant to evolution as community decline has become culturally normed. Instead, local leaders knowing nothing else, see the Memphis economic development establishment complex as “visionary” in their competition with bordering communities in a global economy.

With community education in mind, local community organizations should open all of their meetings, for the next year, with the following facts to educate the local Memphis citizenry regarding leadership behavior in other cities away from deficient community leadership behavior in Memphis:

• Other cities do not feed on their own communities in need with excessive corporate/real estate abatements while citing competition from bordering communities and using bogus projection accounting to justify excessive incentives
• Other cities do not botch their workforce development system
• Other cities do not stifle their small business sector, rip off local small business ideas while stifling creativity and give them to out of town entities.
• Other cities measure performance while course correcting with the hammer of local oversight

The Memphis decline is fundamentally built on the following: 1) no measurement 2) botched implementation and 3) lacking legislative and press oversight. For example in 2016, after Mayor Strickland announced the local ACT WorkKeys initiative to support career readiness workforce development, implementation just did not occur. Below is a map that shows surrounding counties in gold having implemented and achieved their ACT Workready communities goals. But not Memphis. Memphis, for whatever reason, mistakes announcements and conferences for implementation with the support of lacking measurement and oversight.

Its little wonder, living in the bubble without measurement, that local leaders are ignorant to the fact that Shelby County is 20,000 filled jobs below the peer average since 2010 where a botched workforce development system and failed implementation are just part of a decline by design ecosystem. But this botched state of affairs is normal in Memphis, where after 20 years, the educated Memphis community knows nothing else.

Away From Ignorance: Career Ready Using a Data Driven Approach

So what is career ready for a job that pays a good wage? After five years local leaders don’t know. The State of Tennessee is trying to help define that with their Ready Graduate Early Post-secondary Opportunity (EPSO) programming. Ready Graduate measurement deems a student ready for post-secondary life based on a collection of academic milestones, industry certifications and/or standardized test measurement such as ACT, ACT WorkKeys and Armed Services Vocational Aptitude Battery (ASVAB). Sometimes this collection practice is called stacking credentials. And with the newly introduced Junior Achievement program, perhaps local legislators might want to consider adding Junior Achievement to its State Legislative agenda for inclusion in the Ready Graduate EPSO measurement scale.

With the above and employer demand in mind, while using Jobs4TN projections, below are some data driven observations of what career ready looks like in the Greater Memphis area with regard to educational and occupationally aligned skill attainment. Here’s the good news, with a high school equivalency, industry certification and a ACT Workeys National Career Readiness Certificate (NCRC), students coming out of high school meet the prerequisite educational attainment and skills requirement for 69% of the projected job openings that pay an average wage above $43K while incurring no college debt. And furthermore, they can continue their education as they work to obtain their Associate degree while incurring no college debt which will quality them for more job openings and higher wages.

As communities throughout the country battle aging populations, workforce development can become the economic engine while leveraging the youthful population of Memphis. And for youth, going to work early, soon after high school and making a good wage, while incurring no college debt is a great career start. Of course, to make the big bucks, career pathways can go beyond an Associate degree to include Bachelor’s, Master’s  and Post Master’s Degrees. See below data sets.

Educational Attainment

Most of the work with this data set had do to with defining occupations that required more than a high school equivalency but less than an Associate degree. An example would be a commercial truck driver that requires a post-secondary award but less than an Associate degree. Additionally, all manufacturing jobs in this analysis were assigned a minimal certification requirement. Given this analysis, 71% of the projected Greater Memphis job openings in 2026 will require something more than a high school equivalency educational attainment while paying an average 2018 wage of $36K and up.

Skill Attainment

Examples of standardized test that align to occupational skill readiness are ASVAB for military occupations and ACT WorkKeys for civilian occupations. Both of these assessments are recognized in the State of Tennessee Ready Graduate program. The below data reveals that an individual has the pre-requisite skills in Applied Math, Reading for Information and Graphic Literacy with a Silver NCRC to qualify for 76% of the projected 2026 job openings that pay an average 2018 wage of $43K and above.

Conclusion

Career ready, based on Greater Memphis employer demand for a job that pays a good wage is a high school equivalency, certification and a ACT Silver NCRC ideally accompanied with a completed career plan.

For Memphis to progress forward, it will need to compete in the global economy where implementation, measurement, oversight and workforce development take center stage away from the rigged practices of the past. Without the former, Memphis will fall further behind in the global economy.

Over 8 years, EDGE oversight is the botch of all botches as the Memphis community has been undermined with excessive corporate/real estate incentives. This blog chooses to write about the indefensible. And the bogus projection accounting carried out over 8 years by the EDGE Board resulting in projected tax revenue overstatements that approach $1B, without effective legislative oversight, is indefensible on the political right or left. Everyone loses in this scenario even corporate/real estate interests in the long run.

Shelby County Government and Memphis City Government should demand a publicly available legal opinion on their authority to end EDGE abatements  and authority. This action would clarify and serve notice to the public and legislative bodies of their authority over EDGE. And concerns do not just pertain to excessive abatements but also fund misuse.

In a recent email exchange regarding an apparent misuse of $1.7M in EDGE/Depot funds for workforce (GMACW), municipal Chamber grants and a railroad connection, Reid Dulberger defended the fund use while referencing state law and not the Depot’s  local charge. The Depot Redevelopment Corporation and Board was originally set up per the EDGE website in 1997, to acquire and redevelop the former Memphis Defense Depot with approximately 4.25 million square feet of space. Later EDGE took over the management of the Depot under the original local charge.

This is not a state issue but a local issue. The expenditure, under any conditions, is not consistent with the Depot’s local charge. Which is where local oversight comes in and probably why the Depot Board themselves never voted on allocating the $1.7M in funds. Local government should demand EDGE to pay back $1.7M in funds to the taxpayer on the basis that the expenditure was outside their local charge.

Again, this is not a state but a local government oversight issue. EDGE can’t be allowed to just slush out $1.7M  in funds outside of their local charge.

Bogus PILOT Accounting and Excessive Abatements

As far as the bogus EDGE accounting resulting in some $200M+ in excessive corporate/real estate abatements, local government should immediately engage in PILOT reform to curtail excessive abatements that undermine the societal foundation on which commerce thrives. Local corporations are experiencing the impact. While challenged with filling open jobs, some corporate citizens such as Smith & Nephew and Surface Dynamics are walking away from incentives while choosing to invest in the Memphis community with already low business operating costs. But surprisingly, no one is talking about such exemplar corporate citizenry.

The excessive incentive and bogus EDGE accounting issue is not new. It has been written about extensively as local elected officials sit on their hands while the community suffers. Recently, at a County Commission meeting, a $100k expenditure for Kudzukian was questioned.  Professional production of podcast could probably be done cheaper but at least the community is getting something of value for their money. Meanwhile, the City Council and Commission actually pay EDGE fee revenue to conduct taxpayer losing transactions for real estate deals under the heading of “economic development”. See Cherry Tree analysis contained in this blog.

Below are some resources that document bogus accounting and local job incentive excesses and this does not even include scrutiny of some 8 or 9 other abating boards for which evaluation has not been scheduled per Shelby County Commission resolution.

EDGE PILOT Excesses – $500M+ in abatements vs $335M combined for Nashville and Indianapolis that both have far greater total wage growth while blog provides a solution to right size PILOTs. Right sizing PILOTs would occur with a 50% abatement for new Capx provided that current jobs levels are maintained while adopting EDGE’s current investment and term minimums with an additional 1% abatement for total wages on new jobs only. In practice, existing local companies would likely be required to take less than a 50% abatement while providing, at times, over 50% abatements for external corporate recruitment to soften the impact of relocation costs. 

Daily Memphian – 4/15/19 – Beacon Center of Tennessee weighs in on bogus EDGE retention PILOT accounting. Mistakes were found in their credible analysis and were later corrected and written about in the “MCCLM and Beacon Methods” blog below.

Commercial Appeal Editorial – 6/18/18 – Article explains the omissions from EDGE retention PILOT accounting to confirm bogus accounting. This is much like omitting expenses from an income statement or liabilities from a balance sheet. The bogus projection accounting cannot be defended. 

Excessive PILOT Accounting Explained Video

Excessive PILOTs Benchmarked Against Nashville 5/19/19

Real Measurement – 6/18/19 – Conclusively proves excessive incentives are not working to increase total wage growth to improve the social well being of people while showing employment growth is the chief challenge to increasing total wage growth which raises workforce development concerns. 

MCCLM and Beacon Methods on Bogus EDGE Retention PILOT Accounting – EDGE shows a $683M gain from retentions per EDGE Scorecard analysis. MCCLM shows a $120M taxpayer loss and $803M EDGE projected revenue overstatement. Beacon method shows a $95M loss and $759M overstatement

The excesses are clear and demand governmental oversight and reform.

Greater Memphis Alliance for Competitive Workforce (GMACW) Botch

As workforce development #1 priority is shouted from the mountaintop, the EDGE/GMACW Board is a full blown nightmare. They have only publicly met 3 times in almost 2.5 years and have not met in over a year. This occurs as workforce development efforts remain disconnected over a 4 year period. Cary Vaughn has sat on 2 GMACW Boards and has yet to publicly raise concerns or go on the record regarding the lack of execution. And Jack Moore, the Board Chairman, has religiously not held public meetings.

GMACW was supposed to connect local workforce development efforts using a data driven approach. Instead, the GMACW Board shut out local small business from bringing solutions forward to correct the problem, a local cultural norm in a closed rigged system, while not holding public meetings on the back of a failed Canadian contract award.

All the while, Moore, Vaughn and Jack Dyer can be found motioning for approval of taxpayer losing incentives as they don’t hold public GMACW meetings. At the most recent EDGE meeting, its was Dyer that moved for the approval of the taxpayer losing Cherry Tree real estate deal and Moore coming in with a hearty seconding motion.

In this way, real estate development is the #1 priority and not economic or workforce development. And that is further evidenced by the touting of $19B in potential development as opposed to being concerned with measuring total wage growth and improving the social well being of people.

Conclusion

The lack of vitality that occurs in a rigged system is locally evident. The Memphis decline, over time, has occurred without an external event which points to leadership. A primary indicator is the lack of administrative and legislative oversight over abating boards. Lacking governmental oversight is further enabled by a lack of investigative reporting and institutional vitality recently found with the University of Memphis.

Progressing Memphis forward will require more rigorous government oversight, credible measurement and informed taxpayer advocacy. Unless the former occurs, community decline will likely continue.