Researcher: Carson City needs more high-paying jobs to have a quality economy

Carson City's fastest growing job sectors are also the lowest paying sectors - retail and services, including hotels and casinos.

And too many low-paying jobs add up to a lower quality economy, an economic researcher told Carson City business and government leaders Thursday.

"I just want you to know that services and retail bring up the end," said William Fruth, president of POLICOM Corp., a Jupiter, Fla., research firm. "What are the two fastest growing sectors in your region? Services and retail."

Fruth said a community's primary industries must import money to achieve a quality economy.

For example, manufacturers sell their items out of town, which adds money to a local economy. On the other hand, car dealers and retailers send much of their money to Detroit and other locales where retail items are produced, Fruth said.

"To improve a local economy, you have to create more primary industry jobs that pay a wage much higher than the local average," said Fruth, who has analyzed some 600 local economies and has given formal presentations in about 50 regions.

Only 18 percent of the 25 million new jobs created in the United States in the last 10 years pay a higher than average wage. The same 18 percent figure applies to Carson City while the 10 strongest economies - including Seattle, Salt Lake City and Denver - had 33 percent of their new jobs paying more than the local average wage, Fruth said.

Fruth spoke at a special Northern Nevada Development Authority breakfast meeting at the Pinon Plaza.

A private-public partnership in the three counties hired Fruth for $14,000 to pick apart the local economy as Carson City strives to establish an economic strategic plan. City Hall, together with business leaders and schools, want to determine how best to develop the dwindling undeveloped land in the city.

The report is the second of the city's three-part approach to strategic planning that started early this year. The utility companies completed the first phase: providing a detailed map of how utilities serve a dozen undeveloped sites.

"Now we are armed with a tremendous amount of data," Carson City Manager John Berkich said. "We need to go back to our steering committee. From that we will determine whether we need to bring in the Urban Land Institute to develop a long-term economic plan."

The size of the economy and employment in Carson City has grown at a faster rate in the past 20 years than those of the 10 strongest economies in the nation.

But the growth in average earnings per worker adjusted for inflation in Carson City has remained almost flat for 30 years while the 10 strongest economies have increased steadily for two decades.

"The great myth is creating any type of job helps the economy. We need to explore whether this is true," Fruth said.

Fruth turned to a baseball analogy. If you add players with a lower batting average, the team batting average drops. Same thing if you trade the player with the highest batting average for three players batting around .200.

"The dilution of the quality of the economy is adding more low wage jobs than high wage jobs or losing high wage jobs," Fruth explained.

Twelve of the nation's top 25 strongest economies, in Fruth's analysis, are state capitals but he describes Carson City as only "middle of the pack."

Fruth has 20 years experience in economic development, starting in the early 1980s with a four-year term as mayor of Tiffen, Ohio. He went on to develop a 500-acre corporate park in West Palm Beach, Fla., from 1988 to 1995. Since then, Fruth formed POLICOM Corp. and has toured the country with economic presentations.

Kris Holt, executive director at the Northern Nevada Development Authority, and Western Nevada Community College President Carol Lucey encouraged Carson City, Lyon and Douglas counties to commission Fruth.

"We have work to do," Lucey said. "The report is a good benchmark. It lets us know where we stand. We have to pull up our sleeves and fix it."

Lucey will use the report to do a needs assessment to establish how the college can best prepare students for high-paying manufacturing jobs and also make Carson City more attractive for Holt when he visits California to recruit high-tech manufacturers to relocate here.

"We have to program plan when we decide how to spend our resources," Lucey said. "We have to figure out what programs to add and what programs we don't need any more in the occupational areas. We (Nevada as a whole) haven't been doing a good enough job in helping companies find a highly qualified work force."