"Gonna be a ghost town": Dayton's Stagnant Economy

There was a really depressing cover story in this weeks City Paper, about the closure of the Delphi plants, the big auto parts plants that provided a living wage to thousands of workers in this area.

From the article one can see that one of the benefits of unions is that they negotiated a good buyout with the company, sort of delaying the impact of unemployment for a bit for these guys. But the union was pretty much powerless when it came to Delphi relocating manufacturing to Mexico, China, and other low wage/no benefit countries.

At the end of the article there was this:

One man at Fricker’s that afternoon, Nick Hinders, expressed concern for the community and wondered about the effect it would have on local businesses. He didn’t work at Delphi, but his girlfriend did. She chose option one, the buyout.

“I’m self employed”, said Hinders, 39. “I lay carpet. People are losing their jobs, and I can see it. My job is already slowing down. It’s not just Delphi. It’s all the plants in Dayton. The place is gonna be a ghost town, I think”.

I had already posted about the decline in manufacturing here, or the stagnation of it, elsewhere on this blog. But lets see if this is “gonna be a ghost town” (reminds me of that old Specials song).

One way is to once again do some digging in County Business Patterns (CBP). This time looking at the Montgomery County private sector economy as a whole.

CBP groups firms by sector using the North American Industrial Classification System (NAICS). The following sectors are found in Montgomery County:

Rather than measure employment I will use payroll, as this would show the economic impact of a sector…how much is paid, in aggregate, to workers, and then how much payroll is in the county, as an indirect measure of the degree of economic activity.

The aggregate payroll for Montgomery County (built up from the various sector aggregates is thus:



As one can see there is no real net growth, or minimal growth (perhaps due to inflation over the time series). Aggregate payroll is more or less stagnant in the Dayton area, indicating a degree of economic doldrums, aside from the slow growth during the “good times” of the late 1990s.


Then a look at shifting percentages, showing the two big sectors, Health Care/Social Services and Manufacturing, and how Manufacturing is shrinking. Yet the economy is actually somewhat diversified here, as neither sector dominates.


Now some trends. The drop in manufacturing and rise in health care payroll is quite evident here.

But note also the rise in the scientific/profession/technical payroll. Perhaps this is reflection of the importance of Defense spending in the local economy? If so, these firms are “private sector” but not really, as they are almost like quangos as their revenue (and reason for being in Dayton) comes from government contracts.



Looking at the lesser sectors, one can see the drop in management, the plateauing and slight drop in retail, and the rise (and then plateauing?) of the Information and Scientific/Professional/Technical sectors


Comparing the sectors in another way, for 1998 and 2005. One can see that growing sectors in terms of payroll are:

1. Health Care/Social Services

2. Scientific/Technical/Professional

3. Information

The strength of Health Care is a bit of an issue as some form socialized medicine is back on the political agenda, and what would the impact of this be on this strong local sector?




All in all if there is continuing significant drop in manufacturing and if health care employment/payroll is reigned in or cut back this could move the regional economy from mere stagnation to actual decline. There could be a similar impact if defense contractor spending is cut back (if my assumption about character of the firms in the Scientific/Professional/Technical sector is true).

Another interesting measure is retail trade. This is a fairly stagnant to declining number for Montgomery County, perhaps indicating the move of retail more to Greene County due to the new shopping centers opening up there. A cause for concern for entities like RTA, which depend on sales tax revenue.