Economic summit shines light on complexities of growth

The Flathead Valley has enjoyed economic growth in recent years, but economists say it will require a well-educated workforce to keep a good thing going.

That was the broad takeaway from a half-day seminar put on by the University of Montana’s Bureau of Business and Economic Research at the Hilton Garden Inn in Kalispell on Tuesday.

The event drew hundreds from various economic sectors in the Flathead Valley to hear short presentations which summarized performance indicators from different sectors of Montana’s economy. Speakers also touched on the theme, “the future of higher education in Montana,” with talk on how college degrees would help people find stability and traction to compete in a technologically advancing labor market.

Bryce Ward, associate director of the business bureau, made the case that in-person higher education would be the key to succeeding in an economy that is quickly shifting due to automation.

“High-wage jobs and jobs where most people have at least a bachelor’s degree face much less risk from automation,” Ward said.

He said that while digital learning had a place in the future of university, the idea that it would completely usurp physical presence at a university was improbable.

“I think the magic of higher education is ultimately in the face-to-face interaction,” Ward said. “Digital education is like porn for the mind.”

THOSE GATHERED also gleaned insight into how the events of the past year on a national and international level impact the way dollars change hands here in the Flathead.

Patrick Barkey, director of the business bureau, talked about a few particularly interesting trends that complicate the Flathead’s positive economic upswing.

For instance, he noted how the number of jobs in the state is increasing but personal earned income is decreasing. Other forms of income, such as those from dividends, were up but aren’t taxed the same way and are concentrated amongst folks that already have higher incomes.

That means there are more jobs to go around but they may well be paying less; it also means less money in state coffers since Montana relies heavily on income tax when budgeting.

It’s a trend that is mirrored in many states, Barkey said.

Average personal income is still growing, according to data he cites from 2016, but it isn’t growing fast enough to keep pace with job creation. Personal income growth in 2016 was 3.7 percent in Flathead County, 4.7 percent in Lake County and 2.7 percent in Lincoln County, according to the Bureau of Economic Analysis.

Proprietor’s income — meaning income derived from small business owners after they pay their business expenses — was also down, according to data from the same organization.

ONE PRESENTATION by Norma Nickerson, director of the Institute for Tourism and Recreation Research at the University of Montana, highlighted the highs and lows in the tourism industry of the past year.

As has been well chronicled by other reports published in the Daily Inter Lake, the extreme fire season had an adverse impact on tourism but wasn’t enough to keep much of the state from pulling in record numbers of visitors thanks to a strong early part of the season.

That presentation estimated that the fires adversely impacted 78 percent of tourism-related businesses in Glacier Country, which includes the entirety of the Daily Inter Lake coverage area.

Survey data showed that about seven percent of people shortened their trips to Montana because of the smoke and fire. An additional seven percent cancelled plans for subsequent trips in the same year and 8.6 percent of tourists cancelled their trips altogether due to the fire and smoke.

In August, when the eclipse happened, over 260,000 people poured into Wyoming. That’s a deluge in a rural state that is even less populous than Montana, and it was estimated the state saw about $63.4 million in tourist spending.

The effect was weaker in Montana since it was out of the line of the total eclipse, but was enough to lift the entire area’s hotel performance. Glacier and Yellowstone continued to draw more visitors than any other part of the state.

“You’ll notice that it’s Glacier and Yellowstone country that drives everything,” Nickerson said. “It’s the national parks.”

She also added that studies had shown that communities with a resort tax, such as Whitefish, saw no adverse impact on levels of tourist spending. She said they received more comments from tourists incredulous that more municipalities didn’t use them to generate additional income than they did from tourists complaining about the extra tax.

IN A presentation about agriculture, George Haynes, an agriculture policy specialist with the Department of Agriculture Economics at Montana State University, talked about how changes in international trade were going to impact Montana wheat and beef, among other products.

He said the opening of the Chinese market for American beef producers would likely be a boon for business, but the Chinese have imposed more stringent requirements that will likely change the way beef producers in the state raise and process animals if they want a slice of the new foreign market.

“It’s going to change the way some of our producers in Montana produce beef,” Haynes said.

Haynes also presented a set of data that he said often surprises people. It showed that the United States is only the fifth-largest producer of wheat in the world, beat out by Canada, China, the European Union, India and a group of former Soviet bloc countries like Kazakhstan.

In the most recent available data, the U.S. only grew 8.3 percent of the world’s wheat. In 2016 we sent more than twice as much to each Mexico and Japan as we did to China.

Both Mexico and Japan are countries that could see significant changes to trade incentives as President Trump has promised to shake up both the North American Free Trade Agreement and the Trans Pacific Partnership. It is still unknown exactly how that could impact the local market for wheat.

Montana is the No. 1 producer of organic wheat in the country, according to Haynes’ presentation.

Reporter Peregrine Frissell can be reached at (406) 758-4438 or pfrissell@dailyinterlake.com.