It may seem odd that one of our stories this week is about the Delaware economy outpacing its counterparts in a tiny region covered by the Federal Reserve Bank of Philadelphia.
The Philly Fed issues a little-noticed Tri-State tracking report each month that provides a useful economic snapshot.
Granted, the gains are northing special. Employment growth remains weak in the region for reasons ranging from a high cost of living to a global economy that moves jobs offshore as those markets expand. Income growth, while anemic is still running above the cost of living.
Still, the state’s performance in the region can’t be ignored, given the gloom and doom that has pervaded the water coolers in the in the past week or so as DuPont CEO Ellen Kullman was retired or forced out as earnings forecasts dropped.
There have been many predictions about the end of the road for the Delaware economy as the state faces prospects that the company will be further split up and headquarters and R&D jobs will be eliminated or moved elsewhere.
It is a frightening scenario contemplate, but keep in mind that the little-noticed job numbers and other data tell us that the state’s economy is far more than DuPont.
Indeed, the decline of the company in terms of employment and economic clout has been going on for more than two decades. It wasn’t that long ago that the company employed 25,000. That number has dropped below 10,000 or less.
Its remaining labs have large blocks of unoccupied space, with manufacturing confined to a few small sites. The headquarters have been moved out of the city and spin-off Chemours is likely to be sold or move its headquarters elsewhere in the region. All those developments are made worse by a mindset that still views DuPont as that company employing 25,000 that as recently as 35 years ago owned the daily newspaper.
Long ago, DuPont became a global company that wears out top brass who travel tens of thousands of miles a year and deal with the quick buck artists like “activist investor” Nelson Peltz who want to lock in short-term gains and have plenty of money to play with from institutional investors.
Other companies long ago stepped into leadership roles. Chase seems to have emerged to become a major player, filling a gap left by the sale of MBNA to Bank of America.
What to do?
The tired old ideas of cutting taxes in hopes that revenues will increase and clamping down on organized labor will have only a limited impact and might indeed make things worse.
At the same time, anti-growth sentiments and talk of taxes on wealthier residents have an equally adverse effect.
These hardened attitudes on both ends of the political spectrum will not change in the short-term What we can do it get a better handle on the changing economy by diving into statistical data and coming up with a realistic strategy that is not based on chasing the next big thing at the expense of growth in other sectors of the economy.
This change also requires a General Assembly and county councils that are better educated on dealing with a global economy and a public-private economic development partnership that is not affected by changes in county and state executives.
These are vague concepts to be sure, but it is clear that the current system, even with occasional bright spots is not equipped to deal with the challenges and more importantly the opportunities that lie ahead.
Prescient and sensible comments in your opinion here about keeping the current DuPont turmoil in perspective, Doug.
What comes next for the Delaware economy is not known, but the need to reinvent is now more urgent and important than at any time in the past generation. We CAN do it, but do we have the consensus WILL to do it ?
Let’s be thankful for the largess of Uncle Dupie and move on, as you suggest…