Abilene has simultaneously experienced a drop in average wages and a slight increase in employment over the past year.
And according to an Abilene Reporter-News article, wages dropped by $4,000 for full-time, year-round Abilene workers between 2008-2009. But Abilene’s unemployment rate dropped to 6.8 percent in July, a tenth of a percent lower than August’s rate of 6.7 percent, according to a report from KTXS News.
Chief Financial Officer Kelly Young said Abilene’s economy has declined over the last year or two, but he preferred to view Abilene’s flat economy as a sign of stability.
“If it were a growing economy, I’d say it was stagnant, but since the economy’s declining, I’d say it’s stable,” Young said. “We’ve just been flat – other cities have shrunk.”
The structure of Abilene’s economy protected it from suffering the fate of many other cities, said Dr. Monty Lynn, professor of management sciences. He said the four largest sectors of Abilene’s market come from retail, Dyess Air Force Base, health institutions and higher education institutes.
While retail fell in 2009, the other three sectors have been stable, Lynn said. This has kept Abilene’s economy steady during a time whenÂ economies dependent on manufacturing or inflated real-estate have contracted, Lynn said.
Though ACU has felt the blow to the economy, it is putting more into Abilene than it’s taking out, Young said.
“We and the other universities clearly have a big economic impact on Abilene,” Young said. “We help the Abilene economy through the purchases that our employees make, that our students make and with our building projects.”
Students & Jobs
Higher education institutes employed 2,409 non-student workers in 2008, making up 3 percent of Abilene’s workforce, Lynn said. ACU employs between 750-800 full-time staff and faculty, not including students or construction workers, Young said.
Many nationwide faculty are brought in, but most staff positions are filled by Abilene natives. The average salary for an ACU employee is $52,000, well above Abilene’s 2009 average earnings of $39,422.
Students help create jobs by taking low wage and volunteer jobs, Lynn said. Abilene’s student population also makes Taylor County one of the youngest districts in its area, increasing its attractiveness to businesses.
An Economic Impact
Aside from job creation, Abilene businesses profit from the colleges and universities around town, Lynn said. He has performed studies of the effect of higher educational institutes on Abilene’s economy. These studies are commissioned by the Abilene Chamber of Commerce every two years.
Abilene’s eight colleges and universities – including ACU – contributed $61.6 million directly into the city’s economy in 2008, Lynn said. Students were directly responsible for 27 percent of that contribution.Â Students were also behind most of the $6.3 million visitors spent in Abilene, as most visitors were coming to see their children, Lynn said.
ACU alone put $756,949 into local businesses with staff and faculty purchases during the 2009-2010 fiscal year, according to purchase-card records from the Accounts Payable Office. This number includes payments for office supplies, fuel, rental cars and restaurant meals.
Most of the $4.5 million ACU annually spends on health benefits is spent in Abilene as well, Young said. While contractors use much of that money to buy materials and equipment, part of the money goes to hiring workers, who put that money back into Abilene’s economy.
Effect on ACU
Though Abilene is surviving the recession, the weak economy has hurt students’ ability to pay tuition and donors’ ability to supplement tuition, Young said. ACU employees have also experienced a salary freeze since 2009, Young said. August brought most of ACU staff and faculty the first pay raise in a year.
“We have to be very careful that we hold things at a good value in a down economy because of what people are able to give and pay,” Young said. “Last year we cut almost 6 percent out of our operating budget in response.”
But cutting cost isn’t ACU’s long-term response to a recession, Young said.
“The other way we’ve responded is trying to improve quality, so we have more demand for what we have to offer,” Young said.
ACU has worked, not only to keep the programs it offers available, but to keep expanding the ways it shows donors and students the university is an institution worth investing in, Young said. Yet ACU also uses caution in decisions it is making during tight times.
“I think the question on everyone’s mind right now is what the future of the economy is,” Young said. “This may not be a time to add a lot of projects and dollars, or it might be an ideal time. The bottom can be the time to do things.”