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Making a major impact: NC's effect on local economy put at $45.5 M
March 5, 2014
BY RICK OLIVO
Staff Writer/The Daily Press
A University of Wisconsin-Whitewater study shows that Northland College has an economic impact that compares favorably with the other major employers in Ashland County and has a substantial economic effect over a five-county region.
The UW-Whitewater’s Fiscal and Economic Research Center (FERC) prepared the study. Its author was Russ Kashian, PhD, a professor in the University’s College of Business and Economics.
UW-Whitewater Assistant Professor of Economics Matt Winden, PhD, delivered a presentation on the study Monday evening at the Northern Great Lakes Visitor Center.
In his discussion, Winden said the study analyzed the economic impact of Northland by determining the college’s direct, indirect and induced economic impact, defining indirect effects as occurring on a broader economic sector in the area that is affected as a result of spending by students, employees and alumni.
Winden said the study focused on tangible impacts on the economy, including the number of jobs created, the employment income generated and the total industry sales produced.
Looking at the data, Winden said Northland’s direct economic impact included 236 jobs, producing $7,464,326 in employment income and industry sales of $21,705,741. When the indirect and induced effects are added in, the result adds up to 408 jobs with employment income of $12,132,586 and industry sales of $31,543,659. Added to this is the economic impact of Northland College student spending.
According to Winden, the figures for student spending were obtained by a survey of both on- and off-campus students that included areas such as money spent dining out in Ashland, for groceries and for entertainment.
Winden said that about 31 percent of the students responded to the surveys, which he said gave a statistically valid sample for the survey, with a total of 177 responses, 40 of which were from off-campus students.
Those results indicated a total of 17 direct-effect jobs, with employment income of $317,909 and industry sales of $1,218,401. Adding the indirect and induced effects, the total effect included 21 jobs, employment income of $428,993 and $1,668,979 in industry sales.
Combined, the two categories, with indirect and induced impacts added in, gave a total of 421.6 jobs and total income employment of 12,458,104 with total industry sales of $32,955,562; a total overall economic impact of $45,413,666 produced by the college.
“When you look at the total impact of Northland College, it is significant,” Winden said, “Northland College is a major economic engine in the region.”
Magnifying that economic impact is the fact that the multiplier effect of spending in the Ashland community was larger than areas downstate because there was not as much “leakage” as is the case in more urban settings.
“That is a very positive thing to see, and it adds a significant multiplier effect for the college,” Winden said.
Winden said Northland’s economic impact rated favorably with the County’s three biggest employers — The Bad River Band of lake Superior Chippewa Indians, C. G. Bretting Manufacturing and Memorial Medical Center, all of which were listed as having employment at between 250 to 499 — as well as Walmart, listed as having employment of between 100 and 249.
Winden said Northland’s job impact amounted to over one percent of the entire region’s employment impact.
“The overall impact of Northland College is significant and beneficial to the whole region,” he said, noting the employment was particularly significant given the relatively high unemployment rates of several of the counties in the region.
Winden said the college also added value to the region as a cultural center.
Winden noted that the high number of Northland alumni that remained in the region after graduation were also an asset.
“They are bringing that knowledge, that passion, the skills that they learned here and they are keeping it within the state,” he said. ”They continue to add to the economy.”
Winden said that was an intangible not really touched on by the study, but an important factor nevertheless.
“For a long time, businesses were basically courted by areas, in order to draw them to the area,” he said. “They were offered tax incentives, big subsidies and breaks to get them to locate in their areas, particularly industries involving natural resource extraction and manufacturing.
“That is no longer the case; now even with offers of large subsidies and tax incentives, businesses are choosing to locate where employees have the skill sets they want. More and more, that ends up, even in manufacturing and natural resource extractive industries, to be four-year bachelor degrees or higher.”
Winden said Northland’s presence as the four-year college in the area provided an opportunity for growth.
“If you don’t have areas that can supply the workforce, you need for the future, businesses will choose not to locate in those regions even with incentives,” he said.
In questions from the audience, Winden said it would be possible to prepare a county-by-county breakdown on the economic impact with the data on hand.
“The reason we didn’t do it that way was because basically, the five counties as a whole (Ashland, Bayfield Sawyer, Iron and Price) seemed like a good unit to look at,” he said.
Following the presentation, Winden said if there was one thing he hoped the audience would take away, it was to realize the value of the resources they already had at hand.
“A lot of cities and counties will look at ‘How do we get something new, how do we change this?’ You have to understand what you already have, and to truly value it,” he said. “When you run an analysis like this, you understand what a huge impact it provides to the community.”
Winden said among the surprises in the study was the size of the multiplier effect.
“I was aware of a number of other studies that we had done in the region, and it was curious to all of us at the FERC, not because it was out of bounds, but because it was larger than we see for a lot of these studies,” he said. “When you dig into it, one of the reasons is because the community is very tight-knit, very close and there are not as many opportunities for money to leave the community, which is a real positive.”
Winden said the study told community leaders something about the institution, but that it was ultimately up to the leadership of local leadership and the college to find a direction to build on that impact and take advantage of it.
He said although it was outside the scope of the study, his personal thought was that the college’s focus on the environment, natural resources and sustainability could be a major driver of attracting students interested in that area.
“It is becoming a more important area as we move forward because of all the environmental issues we are facing,” he said. “If you can capitalize on that reputation, you are in very good shape.”
Rick Olivo can be reached at: firstname.lastname@example.org
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