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Report: GFU's impact $140 million
Economics Study led by professor Nate Peach estimates Newberg university's direct and indirect impact on Yamhill and Washington counties
George Fox University assistant economics professor Nate Peach released a study detailing the economic impact of the university, finding that the Newberg-based Christian school was responsible for approximately $140 million of the local economys income in 2014.
Peach, along with 13 students in his economic development course, embarked on the project last spring to determine how much money was earned and spent in the local economy – defined as Yamhill and Washington counties – by university employees and students in a given year.
In addition to the $140 million generated, the university also provided 1,588 full-time jobs a total that doesnt include the universitys 1,367 student employees.
The study also revealed that 2,461 students living in the area spent an average of $5,177 annually in local retail, food, recreation, real estate and other expenses.
The universitys sources of income and spending in the local economy considered in the report include revenues from undergraduate and graduate tuition, spending on new buildings, undergraduate student spending, capital and operating expenditures, and employees salaries and benefits.
Colleges and universities have a tremendous economic impact on their communities, Peach said in the report. They provide jobs that would not exist in the area otherwise, and they bring students to the area who spend significant amounts of money in the local economy during their years of study.
Peach added that an underappreciated benefit of utilizing undergraduate students to support an economy is their relatively low demand for public services while they simultaneously support the local economy through their spending.
Students show up to school, spend a lot of money in the economy, demand little in terms of public services, then return home, he said. In short, undergraduate students contribute extensively to the local economy while requiring little of its government.
The report also presented many of the universitys non-economic contributions to the community, ranging from service activities to providing a highly trained workforce.
The results were derived using the Bureau of Economic Analysis Regional Input-Output Modeling System (RIMS II), a standard model applied by economic development practitioners that uses equations to define local markets and determine the collective impact of direct and indirect factors.
By definition, direct entails the money directly spent, or revenue generated, by the university. Of the more than $140 million total, nearly 80 percent of it (more than $110 million) was spent directly. The other $29-plus million was spent indirectly – represented by the income and jobs created through the spending of George Foxs students and employees. Put simply, indirect effects are the response of local suppliers to spending.
A prime example of this is the universitys constructing of a new residence hall, Peach said. The university contracts with a local construction company, which has the direct effect of increasing the revenues of the construction company by the price of the building. The construction company in turn is able to employ workers.
The final component of the economic impact considered was the induced effect or money that is spent locally as a result of the spending of the universitys students and employees.
Money that a George Fox employee spends at a local retailer allows the retailer to employee someone in the local economy, Peach said. The retail employee will in turn spend money in the local economy. The spending of George Foxs students and employees is referred to as the indirect effect and the spending of people that are employed at other companies and organizations, the induced effect, Peach explained.
George Fox University is the second-largest provider of jobs in Yamhill County. In 2014, the university employed 509 individuals on a full-time basis, 1,367 student employees and 973 part-time workers. Another 1,079 full-time jobs were the result of the indirect impact of the university.
The scope of the report, however, is limited. It does not, for instance, include information on the spending of visitors that the university brings to the community. Activities such as sporting events, orientation weekend, graduation, homecoming and Family Weekend draw large numbers of people to the area – individuals who will spend money at local businesses on lodging, food and entertainment.
The report also doesnt account for the universitys mission of educating students.
Helping to meet the employment needs of the community has tremendous economic and social value, Peach said. Local businesses, churches, schools and nonprofits benefit from this service each time they employ an alumni.