PHOTOGRAPH BY Dennizn | Dreamstime
The willingness of some Memphians to trash-talk their own city has long been as much a part of this city’s DNA as the Mississippi River. How often do we see self-hating comments online and, just as often, in conversations with friends and neighbors?
Nothing seems to discourage the gripers, but hopefully, it’s not Pollyannaish to believe there are fewer of them these days as a result of new momentum and $9.2 billion in new projects that suggest that after 15 years of sluggishness, the regional economy may hint at stepping up its performance.
The opportunity before us now is to tap into that current energy to address locals’ low expectations about our city’s ability to compete. This behavior was on display following Amazon’s rejection of Memphis as one of the final 20 candidates for its $5 billion second headquarters and 50,000 jobs. Generally, the public response to the announcement was that we did our best and it was a long shot in the first place. After all, Memphis was in good company: 217 other cities also didn’t make the cut. Rather than rationalize away the rejection, however, we might use this as a teachable moment.
Former Memphis Mayor A C Wharton Jr. often observed that our community is fishing downstream while the big fish are being caught upstream. The Amazon exercise is the latest reminder of this, and here’s the thing: While the company’s gluttony for tax incentives was record-setting, the real bait Amazon was looking for was the same that other big fish are seeking — a quality workforce for a technology economy, high-performing public services (particularly public transit), high-quality university research, and a quality of life that attracts millennial workers.
Our teachable moment should begin with an in-depth, candid analysis of the things that the Top 20 finalists have that Memphis doesn’t, characteristics that inspire higher expectations for the Memphis regional economy, which is now lingering on the lower economic rungs for the 50 largest metros. We need a plan that sells Memphis based on quality rather than cheapness.
It was instructive to see that every one of the 20 Amazon finalists has a higher cost of living than Memphis, and most have higher tax burdens. Selling ourselves for cheapness requires us to waive taxes to attract companies, which ultimately is a net negative, because the company gets a publicly funded subsidy while government itself loses money that could help fund education, crime prevention, and infrastructure.
In the end, rather than define success by the cost of buildings under construction or the number of tax waivers approved, the economic development plan has to produce success defined by higher median family incomes, lower poverty rates, more opportunity, broader prosperity, and a more diverse jobs mix.
Additionally, success is found in the kind of workforce that can compete in today’s economy by emphasizing technology and creativity. When the current PILOT program was created 35 years ago, the plan was intended to be temporary until the Mid-South workforce was improved. Instead, the incentive-based program is still with us today, with approximately $70 million in tax money waived every year.
“We goofed,” says David Ciscel, former chairman of the Economics Department at the University of Memphis and a senior consultant for the Federal Reserve Bank of St. Louis. “Most specifically, we maintained the labor force of the past. The city had always prospered on a hardworking unskilled and semi-skilled work force. That workforce was segmented by race. African Americans provided a large unskilled labor pool that worked anywhere, anytime — agricultural or industrial. White workers, though poorly educated, provided the industrial proletariat of the Mid-South economy. By the end of the 1980s, this kind of labor force was no longer a road to prosperity.”
In order to shift from business as usual to a plan of action for an innovation-driven economic growth and higher paying jobs, we have to spurn silver bullets, low expectations, and lack of self-worth, and instead, aim higher and seek the kind of disruptive innovation that in business allows a smaller company to leapfrog over its larger competitors.
It’s been said in the wake of the Amazon decision that Memphis needs to tell its story better, and that is true, but it also needs a better story to tell. Ultimately, we should all consider a serious postmortem regarding the Amazon decision, a process by which we can determine to put better bait on the hook for the big fish that we need to attract.
