Study has good, bad news for local economies

In Gallatin and Park counties, the economy just keeps marching ahead, even as many people who work for wages see their incomes shrinking.

By SCOTT McMILLION Chronicle Staff Writer

That’s one of the findings of a new study based on federal economic and Census data. The study by The Sonoran Institute and Yellowstone Business Partnership looks at 20 counties centered around Yellowstone National Park, and offers economic breakdowns for each county.

It also contains some bad news and some good news.

FIRST, THE BAD NEWS

The breakdowns show that, while the economy remains vibrant, especially in Gallatin County, lots of people are missing the wave.

At least one out of 10 children in the two counties lives in poverty and more than one-third of renters have a hard time satisfying the landlord every month.

In Gallatin County, 11 percent of children live below the poverty line.

In Park County, the figure rises to 14 percent.

In Gallatin County, 43 percent of renters spend at least 30 percent of their income on rent alone.

In Park County, where housing is cheaper, that figure is 37 percent, but that’s still too high, according to federal guidelines.

Statisticians say that spending more than 30 percent of your income on housing puts you in a financial bind.

Yet with high real estate prices and low wages, people often have no other choice.

And average wages are falling.

In Gallatin County, when adjusted for inflation, earnings per job have fallen by 18 percent since 1970.

In Park County, earnings per job have fallen by 25 percent in the same period.

The falling wages are a troubling aspect of the report, said Ben Alexander, of the Sonoran Institute.

"We know there are winners and losers in this economic transformation," he said.

THE GOOD NEWS

There is a lot of money floating around the two counties. Personal income in Gallatin County totaled $1.6 billion in 2000 and Park County’s totaled $313 million.

Adjusted for inflation, that represents 32 percent growth in Gallatin County and 24 percent growth in Park County just since 1990.

But most of it is coming from sources other than jobs. It comes in a category economists call "non-labor income," defined as income from investments, rents, pensions and checks from the government.

In 2000, non-labor-income accounted for 32.5 percent of every dime in Gallatin County income. That’s $541 million.

In Park County, non-labor income accounted for 46 percent of all income, a total of $143 million.

That means a large portion of the local economy is based on people who don’t have to work for their money, for whatever reason.

Many of those people could choose to live anywhere, but they have selected Park and Gallatin counties.

The study’s authors, while they acknowledge the economic growth isn’t evenly spread, say that keeping the cash flowing depends on keeping the environment clean, the towns friendly and easy to navigate.

The downside is the possibility that growth will outrun the infrastructure and destroy the things that people are moving here for.

"Greater Yellowstone is a land of tremendous opportunity — and substantial risk," the report says.

NEW MONTANANS

When Joan Watts moved here, she decided to build herself a job after working for other people most of her life. She now owns and operates the Blue Winged Olive bed-and-breakfast south of Livingston, a place that caters to fly fishers on area spring creeks.

She first came here in 1991 and fell in love with the mountains and open spaces and big skies, then opened her business in 1994, a move that illustrates the transition from the old economy to the new economy.

Her home was once headquarters to a ranch of several thousand acres, a place that fell to subdividers long before Watts arrived from California.

It was just a large house for a while and now it’s a busy business again, one that spreads some wealth around. Watts has helped guests book as much as $50,000 a year worth of guided fishing trips. Plus they spend money in local restaurants, shops and galleries.

Watts’ business is successful enough that it’s used as an entrepreneurial model in college business courses. It provides her with a living and it fits a niche in the new economy: service provider.

She rents rooms and serves famous breakfasts, but she also advises on fly patterns and tippet weights, gallery offerings and restaurant reservations.

"I’m kind of a general resource," she said.

In Park County, service providers like Watts have provided 73 percent of the new employment dollars since 1970, while farms and ranches, like the one that used to surround her home, have declined by 21 percent. Service providers generated 67 percent of the new Gallatin County jobs in the same period.

And they aren’t all burger flippers.

"Producer Services," like lawyers, engineers and real estate agents grew by 96 percent in Park County and 136 percent in Gallatin County over the past 30 years.

Consumer services, which generally pay less, grew by 40 percent in Park County and 89 percent in Gallatin County.

All things considered, most cities in the Western United States of comparable size to Bozeman would love to have it’s economic situation, according to Larry Swanson, an economist with the Center for the Rocky Mountain West at the University of Montana in Missoula.

"The Bozeman area economy is a climber," he said. "It’s really moving."

He said the low per-job wage figures don’t tell the whole story, because many people moving to this area choose to work part time. Many of those people — police, government and military personnel, for example — can retire in their 40s or 50s, he said. If they decide to work part time, that income dilutes the per-job average, but if the worker also has a pension or other source of income, their checks contributes to the overall good economic picture.

Still, he agreed that some people will be left behind as the greater Yellowstone area’s economy evolves.

"You’ve always got a significant sector of the population that is not moving along with the economy," he said. "It’s not all good. We know that."

To minimize problems, he said policy makers have to focus on developing human resources instead of natural resources, like agriculture, mining and logging, all industries contributing ever-smaller slices of the economic pie in this area.

And they need to keep towns livable, landscapes attractive, he said.

"As people with businesses search the economic landscape, they’re not looking for trashed out areas," he said. "There’s plenty of those around."

Detailed economic analyses of all the counties in the greater Yellowstone area are available online at http://www.sonoran.org

http://bozemandailychronicle.com/articles/2003/06/29/news/01pg1storybzbigs.txt