Study Finds Strong Job, Wage Growth

Friday, January 18, 2013

Northwest Arkansas ranked 41st among 200 large metropolitan areas in terms of job and wage growth during the last five years, according to a Milken Institute report.

The region dropped from 26th in last year’s rankings, and has bounced around the top 50 every year since 2002. The institute ranks metropolitan statistical areas based on growth in overall jobs, high-tech jobs, and wages based on one- and five-year trends. The Northwest Arkansas metropolitan statistical area includes Benton, Washington and Madison counties in Arkansas and McDonald County in Missouri.

“Our first appearance at the top of this list in 2002 really put Northwest Arkansas on the map,” said Raymond Burns, president of the Rogers-Lowell Area Chamber of Commerce. “Given the shape of the economy both locally and around the country in the last five years, our rank really speaks volumes about the strength of our economy here.”

While individual cities each have their own niches in the region’s economy, they intertwine in many ways, said Steve Clark, president of the Fayetteville Chamber of Commerce.

“Bentonville is making strides in logistics and supply chain companies due to the presence of Walmart, while Springdale has a huge impact on the food industry sector of the wider economy,” Clark said. “In Fayetteville, we’re trying to build a hub of entrepreneurship based around the university, and a lot of those companies are related to the established pillars throughout the region.”

Those pillars helped keep Northwest Arkansas in a better position than many other areas throughout the recession, said Mike Harvey, chief operating officer of the Northwest Arkansas Council. The council is a group of business and community leaders that promotes regional approaches to common issues including economic development.

“Some of the areas that ranked well in Middle America, like Dallas and Oklahoma City, were really helped by the oil and gas industry, which we don’t have here,” Harvey said. “What we have are leaders in industries that weathered the recession fairly well. People kept shopping, they had to eat and they continued to move things by truck. Those are some of our regional specialties.”

High-tech jobs in particular bode well for the local economy, Harvey said.

“It doesn’t help that much to bring in a lot of low-paying jobs,” he said. “We prefer strong wage growth to pure job numbers, because it shows we’re bringing in the right kind of jobs to really grow.”

While the majority of business in the region is based along the Interstate 540 corridor in Benton and Washington counties, other areas represent the potential for growth, said David Pemberton, executive director of the Huntsville Chamber of Commerce.

“I like to think we represent the eastern gateway to the region, while Siloam Springs is the western gateway,” Pemberton said. “As the east-west corridor develops, I think we’ll see growth similar to what’s happened along the interstate. We’ve gotten past looking just at city limits, and I think there’s still a lot of future potential for the region.”

Growth could also encompass regions outside the defined metro area, particularly as Northwest Arkansas and the Fort Smith region increase ties, Clark said.

“The two regions are acting more and more like one single big area,” Clark said. “We’ve got similar economic goals, and there are a lot of ways we can work together.”

Fort Smith ranked 196th in the Milken report, down from 160th in 2011. The Little Rock area dropped from 19th to 151st. The Memphis area, which includes several Arkansas counties just across the Mississippi River from Memphis, jumped from 191st in 2011 to 99th in 2012.

The Milken Institute focuses solely on economic numbers, but other factors play into any region’s true character, said Kevin Fitzpatrick, a social work professor at the University of Arkansas.

“Those economic numbers provide a snapshot, but they tend to ignore other factors, particularly what’s happening on the margins,” he said. “Housing, education, poverty and health indicators can show parts sunshine and parts gloom and doom depending on what data you use, but the socioeconomic health of any region is more than just jobs.”

The region’s repeated appearances in the top quarter of the Milken list are being noticed outside Northwest Arkansas, Clark said.

“People are realizing we’re a big deal in the heartland in the middle third of the country,” Clark said. “We’re no longer a flyover destination. We’re a landing place.”