First of a series
By Larry Blaskey
Douglas Dispatch

Douglas is mired in one of its biggest economic slumps in recent memory.

Or is it?

The unemployment rated has skyrocketed and jobs are hard to come by?

Or are they?

Restaurant and bar sales, and retail sales are at the lowest rate they have been in at least a decade.

Is that true?

Douglas consumers and merchants have been inundated on a daily basis with reports that the economic “Sky is Falling” from television, radio and newspapers.

But, because there are difficult economic times in the country, state and even county, does that mean everyone is suffering at the same rate.

The simple answer is no, according to Robert Carreira of the Cochise College Center for Economic Research.

Every community, every county is not in the same recession. Just like communities grow at different rates, they are impacted differently from outside economic sources.

“Douglas is actually doing better than many other communities in Cochise County,” he said.

“In retail sales Douglas is now at or near zero growth, while the county is looking at a drop of 3.5 percent. In July, retail sales were down .8 of 1 percent in Douglas, compared to a drop of 8.3 percent for the county.”

One can judge sales growth based on the amount of sales tax (or privilege tax) the city receives from sales of all types of items including restaurant and bar sales, and retail trade

“It is difficult to determine an amount of sales generating the tax because Douglas is operating on a two-tiered tax structure, where large ticket items are being taxed at a slightly lower rate,” he said.

He continued by saying that the trend would indicate that fewer large ticket items is being purchased at this time. “People tend to put off large purchase during times of economic stress.”

But that would also indicate that there are more ongoing transactions since retail sales have stabilized over the last several months. That $20,000 that was being spent in one purchase for a vehicle may now be spent in hundreds of different purchases.

In looking at overall sales through sales tax collections, overall sales stabilized in June 2008 showing an increase over the previous month of 2007. Tax collections were up and down during most of the first half of the year.

Retail trade has been on the increase since May 2008, and was up more than 4 percent in September 2008 compared to the same time last year.

Restaurant and bar sales have just begun to stabilize since August 2008, but is showing little growth, if any during those two months. Like Retail Trade sales, food and beverage sales were on a roller coaster ride through most of the first half of the year.

Is there anything that can be done to protect a community from a recession?

“In some cases, there is little that can be done in totally eliminating the downturn in any community. There are too many outside forces affecting business. Increased delivery cost due to earlier gas prices, reduced inventory due to layoffs from suppliers or increased cost of supplies,” Carreira said.

“But, the job makeup of Douglas has helped insulate it from some of the job losses that have affected other parts of the country. We are actually seeing job creation in Douglas.

Since a big part of the job market is made up of government agencies – Border Patrol, Customs, U.S. Forest Service, state, county and local law enforcement, other state and county positions, city government, and schools and colleges – it provides some insulation against recession. In fact, during a recession, government creates even more jobs.”

Five of the city’s top 10 employers are government agencies:

1. Arizona Department of Corrections – 679 full-time employees

2. Douglas Unified School District – 561

4. Cochise College- 221

5. City of Douglas – 216

8. Cochise County - 66

Thursday, the Douglas Dispatch will look at ways to survive a recession, and consumers role in their community’s economic return.