Western Ky's Rising Income

Lane Report

The Lane Report cover, May 2005

Western Ky's Rising Income

Why some cities may not be bleeding talent or good jobs as much as feared

By Robyn Davis Sekula

The Lane Report | May 2005

In 1993, Elaine and Dorian Walker were living in Los Angeles, running a production company and raising their two pre-teen children. They knew they wanted to get out of L.A. to find a better environment to raise their family, but had no idea where to go.

Then Dorian returned from a business trip to Bowling Green and announced he had found the place. Elaine got on an airplane to check it out, and she, too, fell in love with the Western Kentucky university town. Its thriving town square, lines of old homes and campus culture convinced her it was progressive enough for intellectual stimulation – yet it boasted a low crime rate and good schools.

Now, 12 years later, the couple is happily ensconced in community life. In fact, Elaine Walker was elected mayor of Bowling Green in the fall, and started her term in January. For her, that’s proof that Bowling Green knows how to embrace newcomers. “Moving to Bowling Green has been an incredible experience for our whole family,” Walker said. “It has enriched our lives and we hope that, in some ways, we have enriched our community as well.”

Stories like hers abound in Western Kentucky. They are growing evidence that educated professionals may not be fleeing the region’s cities for larger ones elsewhere as much as some have feared. In fact, the opposite appears to be occurring. A Lane Report analysis of Census and IRS migration data from Bowling Green, Owensboro and Paducah shows these mid-sized cities are at least staving off – or in some cases reversing – the classic anecdotal trend of white-collar workers flocking to trendy metro areas with big names and snarled traffic.

Western Kentucky’s largest cities are also bucking a statewide trend. Since 2000, Owensboro has had no net loss of professional jobs and Bowling Green and Paducah have gained them, while Kentucky as a whole has lost such positions during that time. According to the Bureau of Labor Statistics, the number of professional and business services jobs – fields like accounting, law, corporate management and information technology – fell nearly one percent in Kentucky between 2000 and 2004, from a high of 163,400 to 161,900.

Why these cities are making gains in both people and jobs is still a bit of a mystery. It’s hard to draw a direct line between the number of educated workers moving into an area and specific programs a community has put in place to attract jobs. But it does appear that quality of life, however it is created or measured, is making a big difference in where people decide to settle.

Jim Hizer, president and CEO of the Bowling Green Area Chamber of Commerce, said the thinking behind economic development is moving away from a land-the-corporate-offices-at-all-costs approach. His idea: As communities create desirable places to live, people flock there, and jobs will follow.

“It’s the communities with a high quality of life that are going to be the most successful,” Hizer said. “To see incomes rising is part of that whole paradigm shift. People with skills want to live in south central Kentucky because of the high quality of life, and as a result, the jobs are finding them.”

Bowling Green: University-driven

Hizer has room to talk. Bowling Green has assets that plenty of similarly-sized cities envy but are hard-pressed to change: its location on Interstate 65 and the presence of Western Kentucky University. Hizer believes those are the two most important things that help to bring business to Bowling Green, which is in Warren County.

And they appear to be drawing good jobs. Data from the IRS, which tracks migration within the Unites States, shows that Warren County gained roughly 637 households and $26.5 million in total household income between 1992 and 2003. The average median income of the households moving into the county was $18,321 – $1,028 higher than that of households leaving the area. They averaged $17,293 a year.

Universities naturally attract young people, many of whom come to study and end up staying. The school also attracts educators with advanced degrees who contribute to the community beyond the campus, Hizer said. Plus, universities tend to spin off entrepreneurial ventures and give locals a chance to further their education.

“I believe that over the next 20 to 30 years, the communities that have a high level of intellectual capital are going to be the economic development winners,” Hizer said. “University towns, as a general rule, have a high level of intellectual capital.”

Western Kentucky is not only an educational institution, it’s a huge economic engine in and of itself. It is the city’s second-largest employer, with 1,808 employees, alongside other big-name employers like Commonwealth Health Corp and the city’s General Motors Corvette plant.

Another snapshot of economic life in Bowling Green, data from the Bureau of Labor Statistics, buttresses Hizer’s optimism. The city gained 1,300 professional jobs between 2000 and 2004, growing from 4,600 jobs in 2000 to 5,900 last year. That’s a 28 percent increase. And the number is still climbing. The city reported 6,300 professional jobs in February.

Walker, Bowling Green’s mayor and an entrepreneur herself, acknowledges that much of the quality of life that’s bringing people to Bowling Green is tied to the university. But she also credits the restaurants, shops and arts centers in the city’s buzzing downtown and its stock of historic houses.

Paducah: Looking to art

Other cities have taken a different approach to luring intellectuals. Focusing on the so-called “creative class” that has thrived in dot-com fueled cities like Seattle, Charlotte, N.C., and Dallas, Paducah has brought 62 artists into the community since 2000 through its Artist Relocation Program. Here’s the idea: Artists are sold an old house in Paducah for $1 in exchange for agreeing that they’ll move there, renovate the house and put a gallery inside. After a screening process, a local bank gives the artists low-interest loans to help them get off the ground.

Mark Barone, coordinator of the artist relocation program for the city, said artists from across the country have signed up, some lured by the promise of cheap housing and others by a slower pace of life than they may have had in larger cities. So far, every artist to come has stayed, he said.

“The ones who come here like the sense of community,” Barone said. “They work together. We haven’t had one loan go bad. There is no one wanting to leave, and more wanting to come.”

Artist Craig Kittner, who moved to Paducah from Washington, D.C. in 2003, said the program has worked out well for him and his wife, Denise Gordon. Gordon, who is a chef, started her own restaurant, Café Minou, in the home they purchased through the program. “It was a chance to get into something from the ground floor up,” Kittner said. “This is a unique program. Most art areas are started through lease and rentals. This gives us a level of control we wouldn’t have otherwise had.”

Elaine Spalding, president and CEO of the Paducah Chamber of Commerce, said the program is an economic engine. She should know: Her husband is one of the artists who has participated in the program. “Paducah is a place where artists can come and pursue their art and not worry about having a daytime job,” Spalding explained. “They can just pursue their passion.”

The chamber has an ambitious program to spur job growth. Its 2005 goals, posted on its Web site, include building a new airport terminal, a regional industrial park, transportation projects and a riverfront landing facility.

A look at the money trail moving in and out of McCracken County, where Paducah is the county seat, suggests the city has been doing something right over the last decade. Between 1992 and 2003, McCracken County added 231 households and $5.4 million in total household income, according to the IRS data. The average median income of homes moving into the county was $18,832. That’s slightly more – $149 – than the average of $18,683 for those households leaving the county during the same period.

While the artist relocation program is credited with bringing 62 artists to the community, another program has perhaps kept some people in Paducah who otherwise would have left. The University of Kentucky opened an extended campus in Paducah to allow students to earn a bachelor’s degree in mechanical and chemical engineering in 1997. About 100 students are currently enrolled, according to Dr. Bill Murphy, professor of mechanical engineering and director of the campus. While most students want to stay in Paducah, Murphy said some leave to find engineering jobs in other cities. He hopes some of those who leave will return later, providing the city with a future stock of experienced engineers.

The genesis of the program was part of Paducah’s effort to retain United State Enrichment Corp., a plant that enriches uranium for power plants, at a time when the Department of Energy was considering building a more advanced plant elsewhere due to a lack of engineers in Paducah.

“It’s not a problem that’s unique to Paducah,” Murphy said, explaining that any small town with a need for engineers would have trouble attracting and keeping them. “Without an engineering program close by, (hiring managers who need engineers) would go to any school that had an engineering program, such as Purdue or Michigan or Ohio State, and (the engineers) would come here for a few years, and then go back to wherever they came from. We needed to find a way to keep people here. If we can educate them here, and employ them here, there’s a good chance they’ll stay here.”

Owensboro: Mixed success

To be sure, not every city in Western Kentucky is thriving. Much like Paducah, Owensboro isn’t located along an Interstate, and it doesn’t have a public university to funnel in young and educated people. But the city has at least kept hordes of educated workers from emigrating.

Between 1992 and 2003, Daviess County, which includes Owensboro, added only three households, according to IRS data. It lost about $145,000 in total household income. The average median income of homes moving into the county was $18,719 – $114 less than the income of those moving out, which was $18,605.

The city also held its own in terms of professional and business service jobs, though it didn’t show any impressive growth. The city didn’t gain any such jobs between 2000 and 2004, staying steady at 2,900. It did gain 1,200 such positions from 1990 to 2004, up 71 percent from the 1,700 professional spots registered there in 1990.

That might not sound like sunny news. But it’s more encouraging when considering Owensboro’s largest neighbor. Evansville, Ind., about 30 miles away, has lost professional jobs over the last four years. A university town with more than 120,000 people and a riverfront not unlike Owensboro’s, Evansville dropped from 17,900 to 16,700 white-collar jobs – nearly seven percent – between 2000 and 2004. That’s worse performance than any of the cities examined in this story in Western Kentucky, and worse than Kentucky as a whole.

Owensboro’s largest employers are not big-name or high-tech firms. Instead, they’re organizations like the Owensboro Medical Health System and the public school systems.

Daviess County Judge Executive Reid Haire is glad the city is holding its own, but he wants better. “We are in the process of taking a comprehensive, community-wide look at our economic development efforts,” Haire said.

Among the projects planned for Owensboro is the creation of a park-like setting along the Ohio River, in part to attract more visitors to region. The city is also seeking state funding to create a cancer center that will bring more research money and educated researchers to spend it. Another group wants to bring minor-league baseball to the community.

Jody Wassamer, executive vice president of the Greater Owensboro Chamber of Commerce, said the community needs to do more to grow its own businesses. “A city such as Owensboro needs to do a better job of creating an entrepreneurial environment,” Wassamer said. “That’s something we need to work on. It’s connecting people who have ideas with the people who have money.”

Those who have moved to Owensboro have done so not so much because of what the city is, but what it could be. Randy O. Spaw, vice president and commercial account officer for BB&T in Owensboro, said the city has some incredible amenities like the RiverPark Center, where his wife, Kimberly Johnson, works, and the city’s HealthPark, which has outpatient medical facilities and a health and wellness center.

“I think it’s got a lot of potential,” Spaw said. “From a cultural standpoint, it’s a very nice city. The arts are prevalent for a city its size.”

Johnson agrees. She noted that when they lived in Lincolnton, N.C., they had access to a variety of arts programming in nearby Charlotte, but they rarely, if ever, attended events there. Arts programs in Owensboro are more accessible, she said. But she’d like to see its downtown develop more specialty shops. “There are a handful here, but not a boutique district,” Johnson said. And Spaw would like to see more locally owned restaurants.

What it takes

Cultural amenities like restaurants, shops and the arts are what many people mean when talk about quality of life in their communities and the reasons they decide where to settle. And if a city has those things, people may just be willing to overlook other big deficiencies.

Sometimes Denise Gordon, the chef who relocated to Paducah with her artist husband, has to drive more than an hour to another town in Illinois to buy some of the more exotic ingredients she needs for meals in her restaurant. And on Sundays, Paducah is quiet, at least partially because restaurants can’t serve alcohol then. Her restaurant is closed on Sundays, as well as on Mondays.

But she summed up her feelings about life in her new western Kentucky home the way other folks interviewed for this story did: It works. It’s peaceful, in marked contrast with her Washington, D.C., neighborhood, where gunfire had become so common that she slept through it. She’s not exactly making a killing at her restaurant. But Gordon said she didn’t come to Paducah to get rich – just “to pay my bills and put some money away for retirement.”

“This is what we wanted,” Gordon said. “When I’m not working, it is a slower pace of life, and I like that.”