Located on the north-east edge of Clark County Nevada is the community of Mesquite with a population of about 18,541. Like other small cities throughout the United States, community activists are concerned with ways to strengthen the economy, offer a better quality of life and build on local assets.
Mesquite grew much too quickly between 1990 and 2010 but has since slowed to a sustainable growth rate of about 3.15 %
Fast growth is not always better growth. Growth must be sustainable. In a healthy economy, unemployment, and inflation are in balance. The natural rate of unemployment will be between 4.7 percent and 5.8 percent. The target inflation rate will be 2.0 percent. [i]
The latest quarterly outlook by the National Association for Business Economists believes that the nation’s gross domestic product will continue the growth started in the Obama administration by 2.8% this year. That is a decrease from the panel’s prediction in March of 2.9% GDP growth, according to the Associated Press.
A growth rate between 4.7 percent and 5.8 percent or higher is unsustainable. Growth at those rates leads to overconfident irrational exuberance. That creates a boom that leads to a damaging bust. The factors that cause these changes in the business cycle are supply, demand, capital availability, and the market’s perception of the economic future.
The key to sustainable economic growth is not recruiting businesses but attracting people. Any growth in population equates to growth. When people move away, the economy shrinks. However, certain population groups are more important than others.
Mesquite retirees bring their life-time savings, retirement income, and skills. They are entrepreneurs. They start businesses that employee others, and they tend to vote. They have a lifetime of experience and skills, and many have savings or connections or have the funds to start new ventures. Some 35 % of the Mesquite population falls into that category.
Mesquite needs EB-5 Visa immigrants. Those from other nations eligible for EB5 are often well-educated and able to invest a significant amount of money into a new business. First and second-generation immigrants to the United States are this nation’s most prolific group for starting new, very successful businesses that employ many people. These are highly prized immigrants. About 21% of the community’s population are of the Hispanic or Latino race.
To grow Mesquite needs more educated youths (millennials born between 1981-1996). They are what the modern business is looking for in this economic age. Generally, these people seek urban, large city downtown living. To compete, small communities, like Mesquite, need to develop an environment attractive to those seeking the smaller amenities of a small community
People come to a place, not a job. The types of places which are popular and successful have the following characteristics:
- The community framework is a sustainable blue-green infrastructure. That means a focus on social, economic and environmental health. The components include: reliable and affordable water supplies, less heat stress, biodiversity, clean air and dust controls, locally grown food products, and markets for locally created arts and crafts, natural parks, trails, and blue water resources
Green infrastructure is a driver for growth, employment and a better quality of life. It means a “low-carbon infrastructure.” Forget about industrial grade natural gas and think about renewable energy projects (solar, wind, and hydropower). They have much lower carbon emissions compared to fossil fuels.
- Entrepreneurial infrastructures. These are not startup or small businesses. They are second-stage companies[ii] that employ 10 to 99 employees and $1 million to $50 million in annual revenue. Between 1995 and 2013, second-stage companies comprised only 13 percent of U.S. establishments but generated 35 percent of all jobs and about 35.4 percent of sales. Also, second-stage employers often have national or global markets, which means they bring outside dollars into the community.
Research shows that 80 percent of startups die within five years of their start. Yet second-stage companies, which already have customers and products in place, are concentrating on growth and not survival. They’re expanding into new markets and introducing innovations that impact their industries. With greater financial support, they’re typically able to offer more diverse, high-quality jobs and offer better benefits for employees. Large corporations may pull up stakes and move when wooed by relocation incentives. Second stage entrepreneurs generally have deep roots in their communities.[iii]
- Communities that are tolerant of and socially welcome diversity of race, religions, beliefs, and life-styles provide a healthy labor market.
Nevada’s unemployment rate is 4.7 %. [iv] Anecdotal evidence suggests that the Mesquite unemployment rate may be somewhat lower. Workers come and go. The Federal Reserve estimates natural unemployment at between 4.5 percent and 5.0 percent. [v] Here is a list of the Fastest growing occupations: 20 occupations with the highest percent change in employment between 2016-26.
- Social integration In 2015 the American Community Survey reported that, on average, people across the United States tended to live in neighborhoods that were largely segregated by race/ethnicity. White neighborhoods are, on average, 76% non-Hispanic white (Mesquite is 74.3% non-Hispanic or Latino[vi]). Hispanics live in neighborhoods that are primarily Hispanic. More racially integrated neighborhoods encourage fair access to educational and economic opportunities, as well as the increased connection among diverse groups of people.
- Public transportation infrastructure – a choice about how one gets around the community, not just automobile, but also bike, walking, and public transportation to and between amenities
- Variety of housing– a choice of different types of housing, not just single-family homes on lots, but also apartment buildings that offer choice.
- Information technology infrastructure – Competition for high-speed internet services and E commerce is alive and well. Nationally, only 10% of all retail sales come from e-commerce. Nonetheless, the percentage of e-commerce sales varies markedly by-product segment, from around 2% for a grocery to more than 20% for apparel to most sales in categories where products are digitally delivered, like music, books, and [vii]
The technologies and services comprising social infrastructures make available a variety of work-from home jobs popular.
- Collaborative capacity – a community that works together and has many collaborative and cooperatives efforts for accomplishing community-wide projects.
Conclusion.
Mesquite’s growth rate of 3.15 % is slightly out of balance if its unemployment rate is at or near 4.7%. That suggests the need to bring a few more people into the community and slightly lower the unemployment rate. A balance of about 4 % population growth and 4% unemployment would be both attainable and sustainable.
Endnotes:
[i] Amadeo, Kimberly, “What is the Ideal GDP Growth Rate? How Fast Should the Economy Grow?” the balance, Aug 1, 2018 at: https://www.thebalance.com/what-is-the-ideal-gdp-growth-rate-3306017
[ii] Edward Lowe Foundation, Entrepreneurship Programs at: http://edwardlowe.org/entrepreneurship-programs/
[iii] Ibid.
[iv] Bureau of Labor Statistics,, Nevada unemployment statistics September 9, 2018, at: https://data.bls.gov/timeseries/LASST320000000000003
[v] Amadeo, Kimberly, “Natural rate of unemployment, its components and recent trends. https://goo.gl/25L9xp
[vi] U.S. Bureau of Labor Statistics (2017 estimates)
[vii] Dennis, Steve, E-Commerce may be only 10% of Retail, but that doesn’t tell the whole story. https://goo.gl/ak3QM7
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