Welcome to the March 18 Monday Business Briefing, your weekly business intelligence digest from Insider Louisville.
Economist: Pockets of high unemployment impeding local growth
The Louisville area’s inability to bring more of its unemployed people into the labor force has been one of the biggest impediments to economic growth, an economist with the St. Louis Fed said.
“There’s still huge disparities in the unemployment rate in this region, well, well above what you see in peer cities,” said Charles Gascon, regional economist with the Federal Reserve Bank of St. Louis.
Since peaking above 10 percent shortly after the recession, the unemployment rate in Jefferson County has hovered near 4 percent for almost three years. Some local employers have told Insider that they’ve had to raise wages and change job entry requirements to even get applicants for vacant positions.
Getting some of the people who have not benefited from the recent economic expansion into the workforce remains challenging, in part because of the city’s transportation infrastructure.
Gascon made the comments at America Place in Jeffersonville, Ind., and said the location was a prime example of that challenge: “Trying to get public transit to an area like this is very difficult.”
In general, the levels of disparity that can be measured in Louisville “are really mixed” compared to peer cities, the economist said.
The racial disparity in higher education, for example, “is really low here,” he said — though he cautioned that can be explained partially by the overall levels of college attainment being low. That could be a problem for Louisville down the line, as the share of people with a college degree is the primary predictor of economic growth from productivity gains.
The share of Jefferson County residents with a bachelor’s degree or higher is about 29 percent, about 10 percentage points lower than in Nashville, Tenn., according to the U.S. Census Bureau.
Between 2011 and 2016, the Music City saw inflation-adjusted GPD growth of nearly 6 percent per year, or about double the growth that Louisville experienced — though local growth was still slightly above the national average.
Nashville is growing much faster than Louisville, primarily because of domestic migration. Between 2010 and 2018, Nashville gained about 66,000 residents, adding people at a rate of about 1.3 percent per year, while Louisville gained just 24,000 residents during that span, for a growth rate of 0.5 percent.
Productivity growth, which is tied to educational attainment, is especially important for areas such as Jefferson County, which are getting only a small slice of their GDP growth from population growth, unlike, for example, Tampa, Fla.
Both Louisville and Tampa are seeing inflation-adjusted economic growth of about 2.8 percent per year on average, but 57 percent of the growth in Tampa comes from population gains, compared to just 14 percent in Louisville.
Domestic migration is a key indicator of economic growth in most metro areas, Gascon said. The economies in places including Austin, Orlando, Houston, Raleigh and San Antonio are growing faster than average primarily because they’re welcoming lots of people from elsewhere in the U.S., he said. On the other end of the spectrum, cities such as Pittsburgh, Detroit and Cleveland are seeing domestic outmigration.
By comparison, much of the growth in the nation’s largest cities, including Miami, Los Angeles and New York City, is being driven by international migration. Gascon said that while cost of living in those areas is high compared to other areas in the U.S., they may still be relatively inexpensive compared to places such as Shanghai. —Boris Ladwig
Derby Cafe Express now open for breakfast and lunch inside Kentucky Derby Museum
After closing all winter to undergo renovations, the newly rebranded Derby Cafe Express is open for breakfast and lunch inside the Kentucky Derby Museum. The space features indoor and outdoor seating that overlooks a stable, home to a rotating resident thoroughbred as well as companion pony Tatanka.
Staffed by Rosemary’s Catering, the small restaurant will serve hot and cold breakfast items and deli-style sandwiches for lunch. There’s also a full bar at the cafe, which has a selection of more than 50 bourbons, of course, and serves up cocktails such as mint juleps, Old Fashioneds and Manhattans. Derby Cafe Express is even a stop on the Urban Bourbon Trail.
Rosemary’s Catering team is led by Chef John Heidelmeier of Austin, Texas, and General Manager T.J. Mueller, who also hails from Texas. Derby Cafe Express is open Monday through Saturday from 8 a.m. to 3 p.m. —Sara Havens
Naïve to become full-service restaurant
Naïve, the fast-casual restaurant in Butchertown that focuses on healthful options, announced it will convert to a full-service restaurant beginning Tuesday.
“Our customers have been requesting it,” said Naïve owner Catherine Mac Dowell in a news release. “People will be able to relax and have a more zen experience.”
The restaurant will add 20 seats and hire a dozen employees. In addition, the menu will expand, with lunch focusing on sandwiches, salads and quick plates, and dinner being a slower-paced experience, according to the release. The menu will, however, maintain a focus on foods that are gluten-free, paleo and vegan.
Naïve, at 1001 E. Washington St., will celebrate the change with half-price wine specials through April 7. —Kevin Gibson
Louisville fares well in three recent studies
Three recent studies looking at livability and economic activity were kind to Louisville.
For starters, among 10 metropolitan areas cited for strong economic development, Louisville ranked fourth in the South Central Region, according to Site Selection magazine. Additionally, Louisville ranked sixth in the East North Central region, topping both nearby Indianapolis and Nashville.
It’s the fourth year in a row in which Louisville has been named a Top Metro by the magazine.
Site Selection cited 60 business expansions or relocations in the Greater Louisville region, according to a news release. Louisville-Jefferson County also announced 52 new projects in 2018, amounting to roughly 3,000 new jobs and more than $380 million in investments.
Another study, by BusinessStudent.com, rates Louisville as one of the Top 25 Most Affordable Cities to Live and Work. The study took the highest-quoted salaries from more than 100 business-related job listings on Indeed.com and compared them to the average rent for a two-bedroom apartment.
People who live in Louisville, which ranked 12th, have 81 percent of their income left, on average, after paying rent. Lexington ranked second on the list with an average of 86 percent left.
Finally, a study by Point2 Homes shows that in the period between 2013 and 2018, home prices in Louisville jumped a moderate 33 percent. In Detroit, home prices doubled in that time, while San Francisco saw prices increase close to 69 percent. Seattle ended with the third most significant price gain at 66 percent.
The increase tied Louisville with Austin, Texas, for the 14th-lowest increase among 39 cities.
The median increase per home in Louisville was just over $45,000, but market matters and the percentages don’t tell the full story. The average cost of a home in Detroit rose about $31,000 to $61,328, while in San Francisco the average cost went from $800,000 to $1.35 million. —Kevin Gibson
Herb Fink honored in Old Louisville
Herb Fink, who for nearly 50 years has advocated for the preservation of Old Louisville, has been honored with an honorary street sign bearing the name “Herb Fink Way.” Signs were erected between Second and Third streets after the Metro Council approved the honor in February.
Fink is a longtime resident of Old Louisville and member of the Old Louisville Neighborhood Council.
“It is hard to imagine how Old Louisville would look today had Herb Fink not been here to work with the Old Louisville Neighborhood Council and others,” says Metro Council President David James in a news release. “He has made it his goal to keep this part of history of our city alive for all of us to see and enjoy.” —Kevin Gibson
Kaviar Forge & Gallery announced Friday that it will transition from a fine art gallery to a by-appointment-only showroom for the metalwork of owner Craig Kaviar. One last art exhibition will open May 31 and feature the work of renowned local artist Bob Lockhart. Papa John’s International has appointed to its board of directors Michael Dubin, CEO and founder of Dollar Shave Club; and Joselyn Mangan, CEO and Founder of Him For Her. University of Louisville Hospital‘s 5 South Unit was recognized for exceptional patient care by the American Association of Critical-Care Nurses with the Beacon Award for Excellence. The U.S. Chamber of Commerce has given Greater Louisville Inc. a 5-Star Accreditation for, among other things, its “dedicated advocacy efforts … and overall positive impact” on the community.