1. Past Business Trends

a. Overview

Over the twenty-year period from 1970 to 1990, the employment in Kalamazoo County grew by 58,211 jobs or 77 percent (Upjohn Institute figures) from 75,700 jobs in 1970 to 133,911 jobs in 1990 (see Table III-1). In 1990, the Upjohn Institute estimated that the City of Kalamazoo accounted for 46.9 percent (62,844 jobs) of the employment in Kalamazoo County. An estimate of the employment in the City for the year 1970 is about 48,800 jobs accounting for about 64 percent of the employment in Kalamazoo County. Thus, City of Kalamazoo employment grew about 29 percent in total employment between 1970 and 1990, but the City's share of County-wide employment declined.

As can be seen in Table III-1, the nonmanufacturing component of the employment picture has accounted for most of the employment growth from 1970 to 1990 with government employment showing a modest increase and manufacturing employment being stable. Within the nonmanufacturing component, the "services" category has shown the greatest increase in jobs in the percent and absolute number of jobs between 1970 and 1990, followed by "retail trade," "finance, insurance and real estate," and wholesale trade in Kalamazoo County.

Table III-1 Employment by Work Place Kalamazoo County

b. City and County Employment Component Trends

During the ten-year period ending in 1992, business activity in the City of Kalamazoo declined relative to the rest of the County. This trend can be partially explained by both the City's slow population growth relative to surrounding townships and cities as well as the limited space for expansion it can offer to new and existing businesses.

Manufacturing Enterprises. As shown on Table III-2, the City's percentage of the county's manufacturing firms declined from 47.6 percent to 44.8 percent during the ten years ending in 1992. During this period, the number of manufacturing firms in the City grew 10.5 percent from 1982 to 1987, business trough to peak, but then declined 5.8 percent from 1987 to 1992, business peak to trough. The data on Table III-2 suggests that the City's manufacturers are more vulnerable to business cycle swings than are those outside of the City. During the 1982 to 1987 expansion, the City witnessed a better-than-county growth in the number of firms. However, during the 1987 to 1992 contraction, the City saw a decline in the number of firms, while the county-wide number of manufacturing firms inched up 1.8 percent.

TABLE III-2 Manufacturing Establishments

Manufacturing Establishments

Retail Enterprises. During the 1982 to 1992 period, the City's retailers also lost ground relative to their competitors located in the County but outside the City. In 1992, the City accounted for 39.8 percent of the County's total retail establishments and 33.9 percent of total sales, as shown in Table III-3. This is down from its 1982 share of 44.5 percent of all establishments and 41.3 percent of all sales. As shown in Table III-3, the City's mix of retail activity changed over the ten-year period. The number of eating and drinking places grew from 157 in 1982 to 184 in 1992, while the number of apparel and furniture stores declined.

Table III-3 Retail Establishments

 Service Entities. Table III-4 shows similar trends for service industries including business, professional, health and personal services.From 1982 to 1992, the number of service firms in the City rose 17.8 percent; however, the City's share of county activity fell from 57.7 percent in 1982 to 48.3 percent in 1992.

Table III-4 Services Establishments

In summary, the City still houses a large percentage of the County's business activity. Moreover, the number of its retail and service establishments grew between 1982 and 1992. However, the City has lost ground relative to surrounding areas in the County in business activity.

c. Geographic Distribution of Employment

Figure III-1 shows the location of major employers (200 or more employees) in the City of Kalamazoo by headquarters address. Table III-5 lists these major employers. Because businesses with multiple locations are reported by the address of the headquarters, care should be taken with the use of the data. For example, the largest employer in Kalamazoo County is the Pharmacia-Upjohn Company which has facilities in the City of Kalamazoo but most of the employment is outside the City.

The most accurate distribution of employment was generated for the Kalamazoo Area Transportation Study. Existing retail and total employment by Travel Analysis Zone are reported in Appendix B of Chapter II.

2. General Economic Conditions of Residents

a. Labor Force

Although the City of Kalamazoo's population dropped from 1970 to 1990, the City's workforce has increased as a result of greater population participation in the workforce. The workforce participation rate of City residents grew during the 1980s from 59.9 percent of all persons 16 years or older being in the workforce in 1980 to 62.2 percent in 1990 (see Table III-6). The growth can be explained by the continuing increase in the number of women entering the workforce. Still, the participation rate among City residents remained lower than for non-City residents. In 1990, the participation rate of County residents living outside of the city limits was 71.2 percent, up from 68.5 percent in 1980.

b. Unemployment

The unemployment rate in Kalamazoo County has remained below the national rate for the past 10 years, according to estimates generated by the Michigan Employment Security Commission, as shown in Table III-7. The County's unemployment rate stood at 4.0 percent in July compared to 5.1 percent for the nation as whole. For all of 1994 and 1995, the County's unemployment rate stayed below 4.0 percent. It is not surprising that during the past four years, area employers have found it difficult to find qualified workers.

Figure III-1

TABLE III-5Kalamazoo County Top Employers

TABLE III-6Labor Force CharacteristicsKalamazoo City

TABLE III-7Unemployment Rates

The unemployment rate facing City of Kalamazoo residents has been consistently higher than for the County as also shown in Table III-6. In July, 5.9 percent of the city's labor force was unemployed, compared to 4.0 percent of the county's workers residing outside of the city. Statistics from 1980 and 1990 Censuses revealed similar trends, as shown in Table III-5.

 According to the 1990 Census, the City's unemployment rate stood at 9.2 percent, which was nearly double the 4.7 percent facing County residents living outside of the City. In 1980, the City's jobless rate was 7.9 percent, while the unemployment rate for the County residents outside of the City stood at 6.1 percent. The City's 1990 unemployment rate was higher than its 1980 rate, primarily due to business cycle conditions, but more importantly, the spread between the jobless rates of City residents and non-city County residents grew during the ten-year period.

The City's high unemployment rate, relative to the County as a whole, can be partially explained by its greater percentage of residents who are at greater risk of being unemployed: the poorly educated, the economically isolated, and African Americans.According to the 1990 Census, although the City accounted for 31.9 percent of the County's residents who were 25 years or older, it housed 39.3 percent of the County residents who had not completed high school. Even more troubling, 50.4 percent of the County's 16 to 19 years who have not finished high school resided in City in 1990.

 As discussed in the previous chapter, in 1990, the City housed 75.8 percent of all African Americans living in the county. In 1990, blacks living in the City faced an unemployment rate of 19.9 percent compared to a 7.1 percent unemployment rate for white residents.Moreover, the unemployment rate facing black City residents in 1990 was much higher than that facing black County residents who lived outside the City.The unemployment rate of African Americans who lived in the County, but outside of the City, stood at 6.8 percent in 1990.

Several reasons help to explain the wide difference between the unemployment rate facing African Americans who live in and outside of the City. First, on average, blacks living in the County, but outside the City, have achieved higher levels of education. Equally important, however, is that many black residents in the City find themselves in neighborhoods that are economically isolated. Individuals in these neighborhoods have more difficulty obtaining job leads due to the lack of informal social employment networks.In 1990 when the City's unemployment rate was 9.2 percent according to the 1990 Census, 6,721 individuals, 16 years or older, resided in Census Tracts in which the unemployment rate was more than double that of the City and three times as high as the County's overall unemployment rate of 6.2 percent.

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