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Rockford still top 100 in labor productivity – but growth is stagnating

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Rockford still top 100 in labor productivity – but growth is stagnating

The Rockford metropolitan workforce was one of the 100 most productive in the United States in 2015, according to an ambitious new statistical analysis of worker productivity by the Brookings Institute.

The study though highlighted some troubling trends on our diverging fortunes both nationally and locally.

Brookings calculated labor productivity by taking the Gross Domestic Product of the nation’s 382 metro area – as calculated by the Bureau of Economic Analysis – and dividing it by the Current Employment Statistics and Quarterly Census of Employment and Wages from the Department of Labor.

The statistics showed that overall labor productivity slowed markedly since 2004. There are a variety of factors – declining breakthroughs, unequal value in major sectors like education, healthcare and housing to the fact that the Great Recession ate up five of those years.

The second major point is that the economies of the United States continue to diverge. If you look at the top 10 in labor productivity, they are either major tech hubs (San Jose, Calif.; Hartford, Conn.; New York City) or benefitting from the oil and gas boom (Midland, Houston and Beaumont, Texas). In Midland, each worker is producing $299,760 annually and the No. 10 area, produces $147,530.  At the bottom end is Jacksonville, North Carolina, whose economy revolves around the United States Marine Corps’ Camp Lejeune and New River Air Station, where workers produced just $38,120 per worker.

The positive aspect for Rockford is that even with the struggles of the manufacturing sector since 1980, Rockford ranked 100th out of the 382 metro areas. Each worker produced about $106,830. Why is productivity important? As Brookings explained, “rising productivity is a prerequisite for long-term real wage growth and increased living standards… it is generally acknowledged that it will be very hard for incomes to rise without increases in productivity.”

Labor productivity (GDP per worker) 2015

Top 10

Rank

Metro Area

Productivity

1.

Midland, Texas

$299,760

2.

Beaumont-Port Arthur, Texas

$174,220

3.

San Jose-Santa Clara, Calif.

$173,970

4.

Odessa, Texas

$166,960

5.

Houston, Texas

$156,810

6.

Bridgeport-Stamford, Conn.

$151,620

7.

Lake Charles, Louisiana

$150,450

8.

Los Angeles, Calif.

$149,160

9.

Hartford, Conn.

$148,360

10.

New York City, NY

$147,530

Illinois metro areas

15.

Bloomington, Illinois

$135,120

49.

Champaign-Urbana, Illinois

$119,460

51.

Chicago, Illinois

$118,770

60.

Decatur, Illinois

$115,290

68.

Peoria, Illinois

$112,240

73.

Danville, Illinois

$111,890

82.

Carbondale-Marion, Illinois

$110,620

100.

Rockford, Illinois

$106,830

106.

Kankakee, Illinois

$106,660

112.

Springfield, Illinois

$105,840

Bottom 10

373.

Sierra Vista, Arizona

$71,550

374.

Yuma, Arizona

$71,100

375.

Killeen-Temple, Texas

$68,100

376.

Sumter, South Carolina

$67,610

377.

Great Falls, Montana

$66,320

378.

Lawton, Oklahoma

$64,390

379.

Clarksville, Tenn.-Ky.

$63,170

380.

Fayetteville, N.C.

$62,250

381.

Hinesville, Georgia

$50,220

382.

Jacksonville, N.C.

$38,120

The troubling thing for Rockford is that, like wage growth, labor productivity in our still manufacturing-dependent economy, is not rising as quickly as other metro areas. As you’ll see in the charts below, labor productivity rose just
0.92 percent annually from 1978 to 2015, which ranked 235th out of 382. In contrast, Fort Knox’s labor productivity averaged a 2.9 percent increase each year.

Annual labor productivity growth % (1978-2015)

Rank

Metro Area

Pct. Growth

1.

Elizabethtown-Fort Knox, Kentucky

2.88%

2.

San Jose-Santa Clara, Calif.

2.72%

3.

Hinesville, Georgia

2.51%

4.

New Bern, North Carolina

2.36%

5.

Killeen-Temple, Texas

2.35%

6.

Hanford-Corcoran, Calif.

2.34%

7.

El Centro, Calif.

2.18%

8.

Norwich-New London, Conn.

2.16%

9.

Rocky Mount, North Carolina

2.14%

10.

Hilton Head Island, South Carolina

2.05%

196.

Chicago, Illinois

1.02%

235.

Rockford, Illinois

0.92%

More concerning is that Rockford’s labor productivity is increasingly lagging the country.

  • From 1978 to 1995, our labor productivity growth ranked 180th overall with an average of 0.94%.
  • From 1995 to 2004, a very good time for the economy, labor productivity here grew at a 1.39% clip, but that ranked 271st overall.
  • From 2004 to 2015, labor productivity increased just at a 0.43% rate, which ranked 213rd.

Annualvlabor productivity growth % (1978-1995)

Rank

Metro Area

Pct. Growth

1.

Hilton Head Island, S.C.

3.85%

2.

Elizabethtown-Fort Knox, Ky.

3.67%

3.

Norwich-New London, Conn.

3.30%

4.

New Bern, North Carolina

3.29%

5.

Fairbanks, Alaska

3.28%

173.

Chicago, Illinois

0.97%

180.

Rockford, Illinois

0.94%

Annual labor productivity growth % (1995-2004)

Rank

Metro Area

Pct. Growth

1.

Corvallis, Oregon

6.73%

2.

Norwich-New London, Conn.

4.35%

3.

Hinesville, Georgia

4.26%

4.

San Jose-Santa Clara, Calif.

4.26%

5.

Kokomo, Indiana

3.99%

192.

Chicago, Illinois

1.85%

271.

Rockford, Illinois

1.39%

Annual labor productivity growth % (2004-2015)

Rank

Metro Area

Pct. Growth

1.

Midland, Texas

4.90%

2.

Enid, Oklahoma

3.13%

3.

Odessa, Texas

2.81%

4.

San Jose-Santa Clara, Calif.

2.80%

5.

Wichita Falls, Texas

2.37%

213.

Rockford, Illinois

0.49%

233.

Chicago, Illinois

0.43%

None of these numbers are shocking. The manufacturing sector in the United States has been shrinking – for the most part – since 1980 and wages in the Rockford area haven’t been keeping pace with the nation since the early 1990s. These numbers are just another way to illustrate more needs to be done to diversify our economy.

 

 


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