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Challenges and Opportunities for Local Communities in a Global Economy

Challenges and Opportunities for Local Communities in a Global Economy.

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Challenges and Opportunities for Local Communities in a Global Economy

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  1. Challenges and Opportunities for Local Communities in a Global Economy James R. BarthLowder Eminent Scholar in Finance, Auburn UniversitySenior Finance Fellow, Milken Institute Fellow, Wharton Financial Institutions CenterStaying Ahead of the Game: Innovations for Increasing County Revenue 43rd Annual Alabama County Government Institute Auburn, Alabama June 6-7, 2013

  2. The World’s Top 10 Economies Percent of World GDP Today 2050 1820 U.S. (21.6%) China (10.1%) Japan (8.4%) Germany (5.1%) France (4.0%) Brazil (3.5%) U.K. (3.5%) Italy (3.1%) Russia (2.7%) India (2.6%) China (28.7%) India (16.0%) France (5.4%) England (5.2%) Prussia (4.9%) Japan (3.1%) Austria (1.9%) Spain (1.9%) U.S. (1.8%) Russia (1.7%) China (18.5%) U.S. (16.5%) India (12.0%) Brazil (4.8%) Indonesia (3.5%) Japan (3.1%) Mexico (3.0%) Russia (2.7%) Germany (2.4%) U.K. (2.2%)

  3. Per Capita GDP: Europe and United States 1820 1870 1913 1950 2011 Europe $1,232 $1,974 $3,473 $4,594 $34,848 United States $1,257 $2,445 $5,301 $9,561 $48,442

  4. Per Capita GDP by State, 2012 Per capita GDP Rank Connecticut $58,908 1 Massachusetts $54,687 2 New Jersey $53,628 3 New York $52,095 4 Maryland $51,971 5 Alabama $35,625 46 Note: 2011 per capita GDP is $5,445 for China and $1,509 for India.

  5. Total Employment of U.S. MNCs and Affiliates of Foreign MNCs

  6. Percent of Population Employed by U.S. MNCs and Affiliates of Foreign MNCs

  7. Public Debt in Advanced Economies Approached Another Record HighGross Public Debt As Percent of GDP

  8. U.S. Debt and DeficitsHistorical Perspective

  9. Government Policies Need to Adapt When Social Security was created in 1935, it was the definition of a solvent system – life expectancy at the time was 62 years old and the retirement age was 65. Most Americans died before they could retire!

  10. Impacts of Sequestration on AlabamaEducation and Jobs , ,

  11. Impacts of Sequestration on AlabamaMilitary and Law Enforcement $

  12. Impacts of Sequestration on AlabamaPublic Health $ ,

  13. Impacts of Sequestration on Alabama Public Health $ $

  14. Alabama Personal Income Per Capita By County Note: As of March, 2013

  15. Alabama Unemployment Rate By County Note: As of March, 2013

  16. Alabama PopulationTop 5 Counties vs. Rest of State Total Population: 4,802,740 Note: As of March, 2013

  17. Alabama Total EmploymentTop 5 Counties vs. Rest of State Total Employment: 2,010,669 Note: As of March, 2013.

  18. Alabama Total UnemploymentTop 5 Counties vs. Rest of State Total Unemployment: 148,300 Note: As of March, 2013

  19. Alabama Unemployment Rate and Number Unemployed

  20. Alabama Average Hourly Wage

  21. Alabama Local Government Total Revenue 2002 vs. 2012 2002 US$ 13.9 Billion 2012P US$ 21 Billion

  22. Alabama Local Government Spending2002 vs. 2012 2012P US$ 21.2 Billion 2002 US$ 14.6 Billion

  23. Challenging Local Fiscal ConditionsAlabama *: Projected

  24. Extreme LongevityAreas of The World Where People Live Longer Loma Linda, California, U.S.A. Sardinia, Italy Large number of people over 100 years! • Physical activity • Strong social networks • Diet rich in antioxidant fruits and vegetables, healthy grains and proteins Okinawa, Japan

  25. U.S. Aging Population is Growing Fast 63 63 61 60 48 42 37 33 33 31 28 23 4 3 9 2 6 7 * * * Projected.

  26. State and Local Pension Funded RatiosSlightly Lower

  27. 34 States Had Pensions Funded Under 80 Percent, 2010

  28. A Widening Gap in Cities Pension Funding: Top and Bottom Cities * Notes: Study is based on 61 key U.S. cities and fiscal year 2009 data. *Birmingham, AL is 20th out of 61 at 81% funded ratio.

  29. Alabama Has Lagged National Recovery So Far

  30. Alabama Is Supported by Reviving Motor Vehicle Industry

  31. Alabama’s Recovery Lags National Rate Due To Housing Drags

  32. Alabama Is Expected To Speed Up and Grow At a Moderate Pace

  33. Job Losses Exceeded National Trends, And Hiring Recovery Is Slower

  34. Recession Took a Bigger Toll on Alabama’s Economy

  35. Employment Expanded More Than National Average, But Is Stagnant

  36. Human Capital in United States 2012 Source:DerivedfromKevinMurphyandFederalReserve,FlowofFundsQ12012.

  37. Going to College Still a Smart MoveAmericans’ Lifetime Earnings by Highest Educational Attainment, 2011 Bachelor’s degree holders can earn 77% more than those with a high school diploma

  38. More than 25% college graduates Less than 25% college graduates Educational Achievement

  39. Three Ways to Build Human Capital • Increase education and practical skills • Import people with skills • Improve health and quality of life so that people are more productive

  40. Return on Human Capital Investment “The rate of return to a dollar investment made while a person is young is higher than the rate of return to the same dollar made at a later age.” Preschool Programs Return Nobel Prize Economist James Heckman School Opportunity Cost of Funds Job Training Age

  41. “Big gaps in educational attainment are present by age 5. Some children are bathed in an atmosphere that promotes human capital development, and, increasingly, more are not.” “By 5, it is possible to predict with depressing accuracy, who will complete high school and who won’t.” James HeckmanNobel Prize in Economics

  42. Building a Better TomorrowRequires Structuring Our Fragmented Information Today We need to strengthen the sector’s information infrastructure to enable a system in which information can be shared and used dynamically. Specifically, we need to build on current initiatives regarding data classifications (to create consistent definitions), technical standards (to facilitate data exchange), reporting protocols (to specify what data is reported when), knowledge platforms (to allow data to be productively captured), and governance (to ensure intellectual property rights and privacy concerns are managed, to build consensus, and to drive compliance). STATE, COUNTIES & CITIES STATE, COUNTIES & CITIES

  43. This Will Help Information Flow Freely Structuring and organizing data will make information more accessible and useable, increasing the supply and use of information, just as it has in other markets.

  44. Alabama Real Per Capita Personal Income Rank 1929-2012 Rank

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