Federal Reserve rep learns about Danville economy
Published 4:46 pm Monday, May 22, 2023
Danville hosted a visit from Federal Reserve SVP and Regional Executive Seema Sheth last week, who came to learn about the local economy.
Put on by the Danville Boyle County Chamber of Commerce, Sheth made a presentation May 16 about what the Federal Reserve does and how it affects locally during a luncheon at CentreWorks. She had discussions with local leaders about how Danville operates, then took tours of Denyo Manufacturing and BCTC. The Federal Reserve is the central bank of the U.S., and has 12 bank locations across the country. Sheth’s location is the Louisville branch of the St. Louis bank, which covers western Kentucky and southern Indiana. Their goal is to make sure that the economies unique to this region are well represented on the national scale. The Federal Reserve works to keep inflation low or stable, promote maximum employment, supervise and regulate financial institutions, promote consumer protection and community development.
The Federal Reserve votes on what to do with interest rates in response to economic factors. Sheth explained that they can’t fix problems with the economy, like creating new jobs, so they raise or lower interest rates in an attempt to fix problems or stabilize the economy. During her presentation, she explained that the economy surged after the pandemic, but there continue to be workforce shortages. According to the U.S. Bureau of Labor Statistics, labor demand exceeds labor supply by 4 million people. A strong demand plus strained supply has led to very high inflation. Supply chain disruptions spiked in 2022, but Sheth said they are showing signs of easing.
Sheth said after the pandemic, people are spending more on goods and less on services, partly because goods are more expensive. People saved more during the pandemic because they couldn’t do anything or go anywhere, then spent more after the pandemic, so the bank is seeing more credit usage. She said they are seeing a pullback in economic activity, but that it’s not a bad thing, since economies are cyclical and this will allow for some correction and adjustment.
Despite predictions of a recession, she said this dip isn’t necessarily a recession. She said people are afraid of a big recession like 2008, but it isn’t likely to happen since that recession came under different circumstances. Sheth gave an outlook on where they believe trends are going in the short term: Inflation is coming down from its peak, but is remaining persistent; unemployment is expected to rise slightly, but remain very low; economic growth will slow over the next few years to a more stable rate, which will correct the post-pandemic spike; and policymakers anticipate higher interest rates for a longer period. She said the biggest concern that no one has an easy answer for is workforce shortages, which will continue as more baby boomers retire.
Part of Sheth’s job is to gather anecdotal information about what’s happening in towns around Kentucky on what’s doing well and what can be improved, so she can bring that knowledge to other towns and to national discussions. Danville has also felt the effects of labor shortages. Chamber of Commerce Director Jeff Jewel said last year they conducted a poll, and found that on any given day there’s 1,500 job openings in Boyle County, and half of them were medical related.
Sheth had discussions with local leaders about what people are doing to tackle the issue. “There’s an honesty with which this community is talking about workforce development challenges that is unique,” Sheth said. “Not only are they having conversations about what those challenges are, but they are utilizing government, community, and private investment to create solutions specific to those challenges.”
One organization that’s directly addressing workforce needs is the Bluegrass Community and Technical College’s Danville campus. Sheth took a tour of their new nursing school spaces and advanced manufacturing wing. Associate VP for Workforce Solutions Erin Tipton said that in response to local EMT and nurse shortages, BCTC created an EMT program a few years ago.
They also expanded their nursing program – whereas previously they could accommodate 250 nursing students across BCTC, now they can teach 450. Tipton said they can hardly keep up with workforce demand. Sheth said she’s heard from other places that there’s not as much interest in nursing, but Tipton said she believes it’s an access issue. She believes there’s local people who are interested in nursing, but there’s criteria that excludes people from joining.
Tipton explained that people in rural areas can’t always get to a school easily, but when there’s a school nearby that offers classes at convenient, work-friendly times, people are more likely to attend. The Danville campus receives students from many surrounding rural counties. BCTC is also addressing a need for manufacturing jobs.
The school recently opened an advanced manufacturing wing that has four fully equipped classrooms, including a welding lab and factory rooms. It also made room for additional biology and nursing labs. BCTC’s next phase of addressing the workforce is reaching high school students with expanded dual credit opportunities.
Danville Campus Director James Neyhouse said dual credit is very affordable, and will give students an opportunity to get high paying jobs without having to attend four years at a university. Neyhouse said this will hopefully get more kids interested in fields that need workers.
They are hosting free healthcare camps this summer to help get kids more interested in the field. BCTC is also creating an endowment for scholarships for low income students in Boyle County.
“The thing that most impressed me about this community is the amount of collaboration that’s happening,” Sheth said. “There’s a lot of really incredible things happening in Danville and Boyle County, and it seems a lot of that is because of the collaboration between local government, business, county and city.”
When BCTC created its new manufacturing wing, they received funding donations from many local organizations, including the city and county governments, private investments, civic organizations, and others. Sheth said this type of collaboration seems unique to this area, and that these types of initiatives aren’t happening everywhere. She believes Danville is primed for growth.