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YIPWIch Opes of bvesINIesses sold a comma ity oc m upon OF <br />When a community conducts its economic development program, it should focus upon <br />enterprises which will enhance the economy. <br />For areas which are growing and dynamic, the "bar" should be set high; targeting the best <br />and highest paying companies, so all can be drawn upward. <br />However, areas which are chronically distressed, with high <br />unemployment, need to first increase the size of the economy, to <br />absorb the existing workforce and to get more money into the <br />bucket of wealth. The focus for such a community should be upon <br />increasing the number of primary businesses, with less attention to <br />the wages paid. <br />Earlier we talked about the economic impact upon .a community of a <br />1,000 job manufacturing company. The amount of impact, spin -off <br />jobs created, taxes paid, and local purchases is different for each <br />business. <br />The overall impact is determined by the wages paid, the amount of <br />local support (local purchases of products or services), capital <br />investment (taxes paid), and the potential for ancillary companies to <br />be formed as a result of the presence of the business in the community. <br />For example, an automobile assembly plant will likely employ about 1,000 workers, <br />piecing together lots of parts to make the car. The cost of building the factory could very <br />well have been $1 billion and wages are very high. Also, it is quite likely another 5,000 <br />people are employed in the area manufacturing the parts for assemblage. As a result, the <br />assembly plant has a significant overall economic impact upon the local economy. <br />Suppose there is a headquarters for a major insurance company which employs 1,000 <br />workers. The wages are very high for this company as insurance actuaries and corporate <br />executive are paid well, due to their "value" to the company. However, this type of <br />enterprise does not need very many support companies, like the automobile <br />manufacturer. Typically it will occupy a general office building which costs much less <br />than an auto factory. While is it a very desirable business to have in a community, the <br />overall economic impact is much, much less than the car manufacturer. <br />Continuing, a manufacturer of simple plastic products such as milk jugs or tubing <br />requires few if any support companies and a relatively low - skilled, low -wage workforce. <br />MOW of bough - Pop 2*' -- VersUan August 20, 2008 <br />