Mervin Jebaraj, 31, was named the interim director of the Center for Business & Economic Research at the University of Arkansas at Fayetteville in April to replace Kathy Deck. He has been with the center since 2007 after earning a bachelor’s in economics, international relations and European studies from the UA in 2007.
Jebaraj was born in Dubai, United Arab Emirates, and has spent nearly half his life in Fayetteville. He earned a master’s in public administration and public policy from Arkansas in 2011. He was chosen as an Arkansas Business 20 in Their 20s honoree in 2015.
What are the positives of the Arkansas economy? What are its biggest obstacles?
The record low unemployment rate in the state is definitely a positive for the Arkansas economy. Employment growth, especially in the professional and business services sector and the health care sector, is encouraging, as those jobs tend to pay higher wages.
However, in spite of the record low unemployment rate, the labor force participation rate, which dropped below 60 percent in the aftermath of the Great Recession, is only now showing signs of modest growth again. In May 2017, the labor force participation rate was 58.3 percent in Arkansas, placing us near the bottom when compared with other states across the nation.
What areas of Arkansas are struggling and why?
Regions of Arkansas that are doing better than others do so in part because of the mix of employment and industries in their economies. Regions of the state that are dependent on employment in goods-producing industries have been affected the most as those industries have shed some 44,000 jobs in Arkansas over the past 10 years.
On the other hand, regions with a greater concentration of jobs in the professional and business services sector (which added 35,000 jobs over 10 years) and the private education and health care sector (which added 32,000 jobs over 10 years) have fared a lot better. One needs to keep an eye on the fast-growing health services sector in light of the health care policy uncertainties at the national level.
How can struggling areas be helped?
Several policy prescriptions can lead to broad-based economic growth in Arkansas, but two key policies have to do with facilitating urbanization and investing in higher education institutions. All urbanization isn’t equal, however, and well-planned urbanization means that cities and regions foster the ideas economy by providing the right mix of design and amenities, openness and inclusiveness, and affordable housing and adequate infrastructure to support steady urban population growth.
Improving educational attainment is also vital to long-term, sustainable economic growth, and Arkansas’ low level of higher education attainment continues to hamper economic growth across the state. Arkansas should emulate other states and work toward a system where cost is no longer a barrier preventing Arkansans from improving their economic fortunes through higher education. Investing in higher education institutions should be a priority in state budgets, not an afterthought.
The housing market in northwest Arkansas is strong. What makes it different from the last strong housing market that led to a crash and recession?
There is one very important difference between the strong housing market in northwest Arkansas today and the hot market before the crash: absorption. Before the crash in 2008, we saw a steady buildup in completed-but-unoccupied homes, which meant that the supply had outgrown demand. Currently, newly built homes are being sold and there seems to be a shortage of lots in desirable locations to build more homes.
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