A Productive Work Force



WHETHER IT’S MANUFACTURING OR FINANCIAL SERVICES, AGRIBUSINESS OR HEALTH CARE AND RESEARCH, THE REGION THRIVES BECAUSE OF A QUALITY LABOR POOL.

For years, economic-development professionals in Kansas City have boasted that this region’s stellar work ethic and elevated worker productivity give us an edge up on business recruiting or retention efforts. They may have done so with fingers crossed in the hope that, if reliable metrics existed, hard numbers would support their contention.

As it turns out, they may well have had something to brag about.

Screen Shot 2016-05-31 at 11.21.48 AMConsider the work of James Kurre, director of the Economic Institute of Erie at Penn State University’s branch campus, in concert with Patrick St. Andrews, his graduate research assistant. In 2013, they produc-ed a research paper with the snappy title, “What Determines Labor Productivity Differences for Manufacturing Industries Across U.S. Metro Areas?”

Their work took a rare and granular approach to measuring labor productivity in each of the nation’s 332 Metropolitan Statistical Areas. They accounted for a huge range of variables that play roles in the manufacturing super-sector, which help explain why, for example, No. 1 Cheyenne Wyo., finished five times more productive than the national average, and a stunning 15 times more productive than El Centro, Calif., at No. 332.

Clearly, if workers in Cheyenne were really that productive, there would be virtually no reason to locate a manufacturing facility anywhere else. Many variables, then, went into the scoring matrix. How many? The precise scientific term for that number is “about a gazillion.”

Among them were educational attainment, capital investment, innovation (using issuance of patents as a guide), tax policies, population density, union membership and other factors. There are many caveats, then, to caution against using their rankings as one-to-one comparisons between cities, but their work is both intriguing and instructive—and for Kansas City, inspiring.

This MSA ranked in the top 25 percent, at No. 79, with an average of $143.91 in production value generated per labor hour. That’s 14.7 percent higher than the national average.

Their work tells us there’s a decided productivity advantage at work here, at least for companies within that manufacturing super-sector. Does it hold for financial services, teachers or health-care workers? No way to know, but their research is a solid start.

As a practical matter, some of the nation’s largest manufacturers—and their suppliers—have already cast their lots with this region and its work force.

Ford Motor Co. invested more than $1 billion in upgrades to the Claycomo assembly plant in the Northland, and has hired thousands as it moved production of the venerable Escape SUV away from that plant and launched production of the Transit van line there. That work supplements output of the F-150 pickup truck, the nation’s top seller, and the refurbished facility made that plant the vehicle maker’s No. 1 for production capacity.

Screen Shot 2016-05-31 at 11.21.57 AMSimilarly, Gen- eral Motors has invested hundreds of millions in up-grades to its Fair-fax assembly plant on the Kansas side, bolstering the work-force numbers there, and keeping pace with Ford as one of the region’s largest—and growing—private-sector em- ployers.

Following in their slipstream, auto suppliers in droves have mov-ed to Kansas City to take advantage of explosive growth of this region’s logistics capabilities, generating jobs by the thousands. Several years in the making, a surge in construction of warehouse facilities larger than any ever built here—now approaching the million-square-foot-threshold—has been primarily driven by the need for larger spaces by those companies that supply the vehicle assembly plants.

Yes, the lore of a Midwestern work ethic endures, traced to the fact that many natives here are but a generation or two removed from the farm, where you either work, or you fail—and sometimes, where you could do both at the same time. 

But while Kurre and St. Andrews suggest that much work remains to fully comprehend precwhat sets one city apart from another with its worker productivity, the lore holds up to their earliest attempts at scrutiny.