Fairfax posts profit growth: How do the City’s commercial businesses compare with other jurisdictions?
For a while, the ??????????????????financial crisis seemed like the worst possible situation for Fairfax.
But then the financial crash happened, and the economy collapsed even more than the housing market did.
So, as the City is on the brink of insolvency, is Fairfax really on the brink of a financial calamity?
We look at the impact of our financial situation on the economic performance of other small, medium and large city areas, and consider whether Fairfax’s situation is unique.
What is Financial Stress?
The Financial Stress Scale, developed by Harvard Business School???????????????‘s Professor Gary Becker, is a measure of a city’s stress level.
If a city’s financial stress rises from a relatively mild measure, you’re likely doing fine and on track to get back on track. But the city’s financial strain is a little worse than a mild one.
If Fairfax’s financial strain continues to rise, your town’s economic decline will be severe. The financial strain has become more severe because of the financial crisis.
There are two kinds of financial stress:
Low Stress ??? the area that has an average or less-than-average financial stress on the scale
High Stress ??? the area that has an average, or worse, financial stress.
It’s easy to forget when the financial crisis happened that the City’s financial position was similar to that of other large cities. But the city’s financial position was a full four times lower than other large cities.
The City’s financial condition was not as dire as it may appear from the outside.
High financial stress is something other parts of the country are suffering from, too.
Why is financial stress so signifi???????????????cant? Because financial stress is one factor that’s so important for your town’s economic health. It’s very hard to do well and become financially stable without having one of the following three things:
Income in a stable way.
Strong and solid employment.
Good economic incentives for your employees.
That is what Fairfax has. In 2005, Fairfax had more than 50,000 public employees. Today, it’s less than 60,000.
It has the highest net income of any small city in America (that is, when taking into account the people who earn the city’s median net income and dividing that by its population), and the lowest net income of any medium-size small town in Americ