The Catastrophe Is Now
Every market signal points to the same conclusion: The manner in which Wichita is operating during this critical point in our history is not working.
On Monday, data analyst James Chung took the stage in front of hundreds of Wichitans packed into a meeting room and an overflow space at the newest jewel in Wichita’s crown, the Advanced Learning Library. He arrived to deliver another address about the economic progress of Wichita at a time when there is seemingly a growing wave of momentum.
“It’s not always what you want to hear,” Chung said early in his remarks, setting the stage for an hour and a half dissection of data all largely indicating that Wichita has not made the progress needed to secure a more prosperous future.
“We are still in a recession,” Chung proclaimed in front of a presentation screen showing that the Wichita GDP lags the U.S. by 16% and followed by data showing every other Midwest manufacturing-based peer city far outpacing our growth.
This isn’t the first time Chung has delivered sobering news. His initial presentations in 2015 were a wake-up call, identifying four key challenges facing Wichita’s economic prosperity: Our troubled business cycle, inability to attract and retain talent, floundering economic ecosystem and misguided overall perception about our identity.
He had returned once before in 2016 as a follow-up, that time portraying a sense of optimism about the early mobilization of efforts around the challenge areas. As it turns out, this may have provided a false sense of security, lulling us back into a dangerous place where the status quo seemed good enough. “We’ve lost two years,” said Chung, again raising the stakes of our situation.
To the large crowd of citizens and leaders from private and public sectors, Chung laid the truth, as he and the data see it, bare. Every market signal points to the same conclusion: The manner in which Wichita is operating during this critical point in our history is just not working.
WICHITA IS HOLDING WICHITA BACK
Back in 2015, Wichita was in the same boat as other similar-sized, manufacturing-centric cities in the Midwest, hobbled by economies that exhibited lower growth and higher volatility. At that time, Chung held out hope because other cities had rebounded from this situation. It was possible to correct course. That proved to be true…for every city not named Wichita.
While other cities rode the surging economy to improved outputs and growing workforces, Wichita experienced a deeper decline from which it has yet to fully recover. Functionally, this has resulted in a $10,000 lower average annual wage, $50,000 lower average home value and $130,000 less in average net worth.
The reason, Chung said, is three problems unique to Wichita and not easily explained away by normal excuses of being overly reliant on manufacturing or disadvantaged by our geography. Wichita’s four challenges are underpinned by an abnormally constrained labor market, challenged attitudinal factors and chronic underinvestment. This is the trifecta of problems that combines to shrink our labor force, run off our young graduates and hobble efforts to attract new businesses from diverse industries.
A crux issue is the human capital challenge. While we have thousands of jobs that need to be filled, the size of our workforce is shrinking. This is due to our inability to recoup our investment in educating young people. Instead of flowing into jobs in our region, our graduates leave town. Additionally, we are not seeing a flow of talent from traditional feeders of our workforce like the University of Kansas and Kansas State University. This makes it harder to grow businesses that are here, attract new businesses in need of talent and scale startup ventures.
Piling on, college educated women under the age of 45 find few opportunities in Wichita and endure a pay gap larger than any of our peer cities. Similarly, minorities who have obtained an associate’s level or higher degree are leaving to find the opportunity they cannot find here.
This not only underlines Wichita’s struggles with inclusion and acceptance of diversity, but this also reveals a larger disregard for the value of education. Just over half of Wichitans surveyed by Reach Advisors believe that a college education is important to the future prospects of young people. A mere third believe that colleges have a positive effect on the direction of the country. That’s not just indifference to education, but, rather, hostility to a pillar of our community that, according to Chung, has been the largest source of innovation and practically “kept Wichita in the game.”
Wichita has also failed to put its money where its mouth is, dramatically lagging peer cities in all areas of investment. Our civic, venture capital, downtown residential, hospitality and city center commercial development investments each fall hundreds of millions of dollars short of other Midwest manufacturing cities of similar size. That shortfall extends to so-called mega-projects, which yield investments in the billions. We don’t stack up well there either, according to Chung’s research.
BELIEVE IT OR NOT, GOOD THINGS ARE HAPPENING
Hold tight, Wichitans. It’s not all doom and gloom. That should not be a surprise to anyone who has stepped up to reverse our community’s course over the last few years. The fact remains that we did respond to Chung’s initial dire report. We volunteered, sought areas of collaboration, started rebuilding our entrepreneurial ecosystem and experienced some solid economic development wins. While it may not be to the level we needed, we made progress on each of the four challenges.
This is particularly evident in the area of the perception challenge. Intangibly, a wellspring of renewed civic pride bubbled up and still flows in our city. On the data front, this is measured by a significant swing in attitudes and optimism. In 2016, only 27% of Wichitans surveyed indicated that they definitely wanted to stay in the city. Now in 2018, the percentage of people wishing to remain in Wichita has increased to 42%, outpacing those who report wanting to leave. The percentage of people who are optimistic about Wichita’s future has grown from 20% in 2016 to 36% in 2018. There is a tremendous amount of room for improvement here, but it is progress.
Another silver lining was found in the collection of individuals who were highlighted as part of the program for their accomplishments in the past few years. WSU Tech’s Wichita Promise program’s workforce development; Project Wichita’s early steps toward developing a shared ten-year community vision plan; the Wichita Public Library’s completion of the innovative Advanced Learning Library; the Wichita Chamber of Commerce’s ability to spark interest in the Wichita Flag; the collaborative effort to host the first and second rounds of the most recent NCAA Men’s Basketball Tournament; North High School teacher Stephanie Byers’ recognition as the Gay, Lesbian & Straight Education Network’s National Educator of the Year; and the aggressive action of the Wichita Community Foundation to help fund a variety of initiatives were among the beacons of hope and inspiration.
There was even a new initiative announced. Leaders from The Wichita Community Foundation shared that a $1 million Talent Ecosystem Fund has been established. The first gift from the fund is a $500,000 grant to WSU Tech, which will be used to create a new program designed to recruit talent from outside the community by offering assistance with tuition, relocation and cost of living expenses. These recruits will receive training for in-demand, high wage jobs, as well as a guaranteed interview with a local company.
One of the great things about Wichita, Chung said, is that we “just do stuff.” We don’t have to wait for permission. Those so moved, take action and become the difference makers.
WE CANNOT AFFORD TO WAIT
As the audience filed out of the presentation, it was clear that many were wondering what to do next. This latest round of analysis has put an even finer point on what work needs to be done. And, while Chung stopped short of prescribing direct action steps, he did provide valuable insight into how we might change the way we operate as a city.
Getting involved, saying yes to a good idea and compelling those with the means to make meaningful investments are logical outcomes to pursue. At the heart of each form of engagement was a plea that speaks to the unique nature of Wichita’s ability to stand in its own way. What if, Chung asked, we each decide that, while we may disagree politically on certain issues, we will work to coalesce around agreed outcomes, and pledge to put aside our differences for the betterment of our city?
Sound like a pipe dream? Let’s hope not. Chung implored the audience to think of a younger generation of Wichitans, the ones we hope choose to stay and contribute to the long-term success of the city. While they may not share the same attitudes toward issues like diversity and inclusion — in fact, they tend to be more embracing of different cultures and experiences — we owe it to them to give them a voice through our actions.
Wichita’s next big test is likely to be how we react to this new information. Will we be defensive? Will we deny or ignore the data? Or will we be the resilient city that we know we can be, responding to this dour news with an even louder rallying cry than the one we shouted in response to the reckoning that started this journey in 2015?
“I’m not telling you what to do,” said James Chung. He shouldn’t. That’s our job as a community.
We will do it and The Chung Report will be there to tell the stories of our resurgence. Why? Because we are Wichitans.
— The Chung Report Team