CENTERVILLE — Experts with Iowa State University Center for Industrial Research and Service came to Centerville July 10 to conduct an Appanoose County economic sustainability summit at the Majestic Theater.

Dave Swenson and Liesl Eathington recently released a 99 page overview where they scrutinize economies of Centerville and Appanoose County.

The goal is to establish and document a plan for the region and provide businesses and organizations ideas to sustain economic success.

They did not so much say what to do as they looked at the area labor supply and demand and 100 economic, social and environmental indicators that drive the county's economy.

• Area Labor Supply and Demand

More people living outside Centerville have wage and salary jobs in Centerville than do Centerville residents, meaning Centerville relies on an outside workforce. There were 936 job holders that both lived and worked in Centerville, but 2,013 lived outside of the community and traveled to Centerville to work. Finally, 1,588 Centerville residents had jobs located outside of the community.

Appanoose County attracted 1,714 workers who live in other counties, but it sent 3,072 residents to other counties for their jobs. Almost 54 percent of Appanoose County residents with payroll jobs work outside of the county.

Centerville accounts for 68 percent of all jobs in the county, yet houses just 43 percent of its overall population and 44 percent of the county population working at payroll jobs. For county residents at-large, Centerville is a major employment hub.

The net worker exchange considering the county of residence of workers indicates that 60 percent of all workers in Centerville come from Appanoose County.  Nonetheless, nearly 50 percent of Centerville’s residents with payroll jobs work outside of Appanoose County, and statistically, the net exchange at the county level is negative.

State and local government, education and non-education jobs are the top two major sources of labor income, which is the norm for most regional trade centers. Five of the top 30 industries in the region were in manufacturing, and four each were health care related or government related. Combined, these top 30 industries accounted for 61 percent of all area jobs, 75 percent of labor incomes, and two-thirds of value added in 2010.  As the labor income percentage is higher than the job percentage, the average job in these industries combined pay an average of 23 percent higher than the regional norm.

• General Trends

Appanoose County had 12,887 persons in 2010, down 6.1 percent from the previous decade. Centerville’s 2010 population of 5,528 was 6.7 percent smaller than it was in 2000. The county’s share of population has consistently declined as a fraction of the state total since 1980. The region’s share of jobs, however, remained stable from 1984 to 2005 before tailing off.   

Worker earnings have eroded over time. An Appanoose County worker or proprietor in 1980 made 80.3 percent of the state average in earnings; in 2010, that value had eroded to 65.3 percent. There was a sharp adjustment downward during the 1980s.  During the 1970s the county hovered around 70 percent or so of the state average, but by 2007 the value had fallen sharply.

There are two key components of change, then, to average earnings per workers: wages and salaries as well as proprietors’ incomes. The number of farmer proprietors decline annually — there were 600 farmers in the county in 2010, down from 980 in 1980 – so wage and salary jobs and compensation as well as nonfarm proprietorship’ incomes over time provide most of the clues to this longer term erosion in earnings.

As compared to the state of Iowa, the county has become much more dependent on nonfarm proprietorships as a job source than has been the overall state experience. These jobs amounted to around 15 percent of all jobs in the mid 1990s, but by 2010 they had grown to be more than a quarter of all Appanoose County jobs, as compared to 17 percent statewide.  

The region’s higher dependence on nonfarm proprietorships as a source of income is more a sign of regional economic stress than it is of entrepreneurship. The two conclusions from this are there have been fewer wage and salary jobs available than were demanded by the area population and households were therefore forced to supplement their incomes by creating secondary private activities that are classified as proprietorships.

• Comparing the Appanoose County Industrial Structure to its Peers

Appanoose County had 6,902 jobs in 2010, which represented 12 percent of the RTC total. Average labor income in Appanoose County was $30,636 per job, 19.8 percent less than the peer average.

The top five total jobs are found in retail trade, governments, health and social services, entertainment and leisure, and durable manufacturing. In terms of labor income, the rankings change. Government leads at $38.2 million, followed by durable manufacturing, health and social services, transportation and then retail.

• Conclusion

Over time, the Appanoose County economy has not performed well enough to stabilize the region’s population base. The city of Centerville and the county have a  large number of young adults ages 18-44 and having a healthy supply of young adults is a key to an area’s future growth prospects. That important population cohort represented 28.5 percent of the county’s population and 31.1 percent of Centerville’s.  

"Smaller young adult population percentages relative to the state of Iowa will potentially mean ongoing difficulty for the community and the county to maintain their respective shares of statewide jobs and will further impinge on the region’s capacity for growth."

• Indicators of Economic Sustainability

This report isolates more than 100 economic, social, and environmental indicators for Appanoose County and uses secondary and proprietary data to "present the relevant information, describe the data’s relevance, and provide guidance or context in the interpretation or usage of the information."

This section of the report looks at way too many indicators to be included in a news story. What comes next are 10 indicators selected at random.

The gauge uses color guides to judge the following areas: Orange means concern, bottom quartile; yellow means caution, below median; green means fair, above median: and dark green means good, top quartile.

• Bankruptcy Rate Chapter 7, 11 and 13 Filings Per 1,000 Population 2009-2011:  A comparatively high bankruptcy rate indicates a high incidence of unsustainable debt levels among businesses and/or households in the region. It does not necessarily suggest excessive borrowing, just an inability to meet debt service payments or to refinance existing debt. This measure tends to serve as a lagging rather than a leading indicator of economic stress. Appanoose County had a 3.3 percent rating or orange level.

• Incidence of Self-Employment; Proprietors Employment as a Percentage of Nonfarm Jobs (2010): This measure looks at the percentage of nonfarm jobs in the region that are held by proprietors. Proprietors are either sole owners or in a simple partnership in a business concern. The incidence of self-employment helps to gauge the regional potential and propensity to engage in entrepreneurship. Entrepreneurship is prized for its association with business and job creation as well as innovation. While nonfarm proprietorships may indicate entrepreneurship, the rate of self-employment may also suggest regional economic stress. If wage and salary employment in a region is stagnant or declining, comparatively immobile households will seek to establish “side-job” proprietorships to supplement household incomes. This indicator should be considered in context of the region’s wages and average income per nonfarm proprietor, included as separate indicators in this report. Appanoose County had a 26.3 percent rating or dark green level.

• Owner-Operated Farms; Percentage of Farms Operated by Full or Part-Owners (2007): The USDA defines farms on the basis of farming activity, regardless of the occupation or residence of the land owner. A farm is any operation that sells at least $1,000 of agricultural commodities or that would have sold that amount under normal circumstances. On owner-operated farms, the farm operator actually owns all or part of the land that he or she farms. Low levels of local ownership may decrease the likelihood that farm-related business is transacted locally. In addition, land tenure may be related to other indicators of regional stability.  Areas with higher comparative rates of absentee ownership may experience lower levels of civic commitment and environmental stewardship. Iowa has very high rates of owner-operators, and those rates tend to be elevated in areas with higher quality farmland and in more rural areas. Appanoose County had a 97.4 percent rating or dark green level.

• Educational Attainment Percentage of Adults 25+ With Bachelor's Degree or Higher (2006-2010): The capacity of an economy to both grow and to diversify over time is related to the education level of its workforce. Communities with college graduate levels tend to have higher levels of professional, educational, health, and business services. Communities with lower college graduate levels tend to have higher employment in manufacturing, transportation, and in entertainment and recreation. Regional education levels are determined from survey data and are thus subject to error.  Depending on the sample size for the region, the reported levels may be lower or higher than the published estimates. Smaller regions, by virtue of smaller sample sizes, will have wider possible margins of error than larger communities. Appanoose County is at a 13-19 percent rating or orange level.

• Aging Workforce Percentage of Workers Ages 55 to 64 (2009-2010); For community economic stability there needs to be a relatively stable pool of young adult workers. Counties with high outmigration rates for young adults will depend more heavily on a pool of older workers to satisfy regional labor needs, which in turn handicaps their prospects for future growth. In Iowa, areas with smaller population size have experienced comparatively higher rates of young adult population loss. That means more rural workforces will necessarily depend on older workers. Appanoose County is at a 19 percent rating or orange level.

• Workforce Turnover; Average Percentage of New Employees (2008-2010): A high turnover rate may have both positive and negative interpretations. On the plus side, a high turnover rate could indicate a dynamic area labor market in which workers are easily matched with jobs. On the down side, a high turnover rate may indicate high rates of worker dissatisfaction due to low pay, poor advancement opportunities, or poor working conditions. High turnover rates can be costly to area businesses, which must spend time and money in hiring and training new workers. Regional economies that specialize in recreational, retail, or other highly seasonal industries will tend to have high workforce turnover rates due to their

reliance on seasonal and temporary workers. Appanoose County is at 8.3 percent or yellow level.

• High School Graduation Rate 2010 Graduates as percentage of 2005-2006 Freshmen (Net of Transfers): High school graduation rates are based on the success of ninth grade entering cohorts achieving their high school diploma. The rate also includes transfers into and out of that cohort in calculating the rate. An area’s high school graduation rate is a very strong indicator of community well-being, cohesion, and stability. It is also an element of economic development competitiveness and an indication of both the quality of local and of local education system stress. The rate is significantly lower in densely urban areas, some of the state’s poorer counties, and among counties with high minority or Hispanic populations. Appanoose County is at 92.8 percent or dark green level.

• Student-Teacher Ratios Enrolled Students Per Full-Time Teacher (2010-11): It is colloquially referred to as average classroom size. It has long been held that average class educational performance deteriorates when the student teacher ratio is too high.  When ratios are very low, however, it could be a sign of district inefficiencies.  Student to teacher ratios are often much higher in very urban districts, and significantly lower in rural districts. Appanoose County is at 11.6 percent or dark green level.

• School District Property Tax Effort  Per-Pupil Levy as a Percentage of Average, Adjusted for Capacity (2010): This measure looks at all property taxes generated by a district in light of their property tax capacity. It is calculated as tax collections per pupil divided by the peer group average times the district’s school finance capacity score. Districts may choose to use more of their capacity to tax or less. Districts taxing at, comparatively, high effort levels may be in financial stress. Districts with low efforts may be under-investing in education. Appanoose County is at 107.1 percent or orange level.

• Uninsured Population Estimated Percentage of the Population Without Health Insurance (2009): The percentage of uninsured individuals is an indicator of community health risk.  Individuals without health insurance may have lower access to care and may be reluctant to seek preventative care. In addition, medical expenses may reduce the amount of household income available for food and housing expenses. Areas with employment stability and large private or public employers will have lower uninsured percentages. More rural areas and areas that depend on small employers will have higher uninsured percentages. Appanoose County is at 10.5-12.7 percent or orange level.

• Teen Mothers Births To Mothers Under Age 20 Per 1,000 Live Births (2008-2010): Higher teen birth rates are a potential indicator of community stress and a significant measure of potential future welfare (transfer payment) dependency. This statistic includes both births to wed and unwed teens. Nonetheless, this is an important measure of the potential health of children in an area and the need for community prenatal services and counseling. Appanoose County is at 135.3 percent or orange level.