News from the Tennessee Valley Opinion
SUNDAY, JUNE 18, 2006


A good week for Decatur offers lessons in economics

It's been a good week for economic development in Decatur.

First came Nucor Corp.'s announcement that it had finalized plans for a $150 million expansion that will, by 2008, employ 100 additional workers. These are not just any jobs; they will pay, on average, $70,000 a year in gross wages.

Then came the Cargill surprise. Six months after shutting their plant, the doors are opening again.

Buried in the two announcements is a primer on economics.

Lesson 1 is a reminder of how important the Tennessee River is to Decatur's financial stability. Neither company would be here but for access to barges. Decatur must be relentless in working with the TVA to keep the river navigable for barge traffic.

Rail access is less unique, but just as important. Rail and barge transport is more efficient than trucks, a fact that makes those shipping methods even more important with fuel prices on the rise.

Lesson 2 involves the quality of the Decatur workforce. Both Nucor and Cargill went out of their way to praise the work ethic of their employees; both companies said that their employees' work ethic was a factor in their decision to invest in Decatur.

Lesson 3 eludes simple interpretation, but there's a message buried in it. Neither Cargill nor Nucor is unionized. It's a pretty good bet that the union-free environment was a significant plus for Cargill and Nucor. Most likely, however, Nucor and Cargill work conditions and wages are better because of the ever-present possibility of unionization.

The final lesson is the dramatic impact world trade issues have on Decatur. Nucor and Cargill are among the most vocal critics of U.S. trade policy. Cargill closed its doors in large part due to trade barriers that prevented the sale of U.S. sweeteners to Mexico. Cargill reopened its doors in large part because Mexico lowered those barriers.

Nucor, on the other hand, is vulnerable to China's habit of dumping cheap steel on the U.S. market. The company has gone to great pains to persuade Washington to increase barriers.

Whatever the impact on the rest of the world, free trade is often a negative for Decatur.

Understanding these lessons could point Decatur leaders, particularly our federal legislators, in a direction that brings even more jobs.

We welcome Cargill back, and we offer our congratulations to Nucor for its continuing success. As we work through these lessons, we hope to find ways to keep you happy and keep you here.

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