xt7gxd0qv99v https://exploreuk.uky.edu/dipstest/xt7gxd0qv99v/data/mets.xml Kentucky University of Kentucky. Center for Developmental Change 1968 Other contributors include Stephens, Lowndes F. Photocopies. Unit 1, copy 2 is a photocopy issued by the clearinghouse for Federal Scientific and Technical Information. Report of a study by an interdisciplinary team of the University of Kentucky, performed under Contract 693 between the University of Kentucky Research Foundation and the Office of Economic Opportunity, 1965-68. Includes bibliographical references. Part of the Bert T. Combs Appalachian Collection. books  English  Contact the Special Collections Research Center for information regarding rights and use of this collection.  Community Action Program (U.S.) Economic assistance, Domestic--Kentucky--Knox county. Poor--Kentucky--Knox County Community Action in Appalachia: An Appraisal of the "War on Poverty" in a Rural Setting of Southeastern Kentucky, August 1968; Unit 2: Economic Progress in an Appalachian County: The Relationship Between Economic and Social Change text Community Action in Appalachia: An Appraisal of the "War on Poverty" in a Rural Setting of Southeastern Kentucky, August 1968; Unit 2: Economic Progress in an Appalachian County: The Relationship Between Economic and Social Change 1968 1968 2016 true xt7gxd0qv99v section xt7gxd0qv99v I II C O M M U N I T Y A C T I O N I N A P P A L A C H I A
I`? .
hx,
An Appraisal of the "War on P0verty" in aft
Rural Setting of Southeastern Kentucky ‘
(Report of a study by an interdisciplinary team of the University
; of Kentucky, performed under Contract #693 between the University
of Kentucky Research Foundation and the Office of Economic
Opportunity, l965—l968)
I {ig C ,
"<;%?$*f
I UNIT 2
ECONOMIC PROGRESS IN AN APPALACHIAN COUNTY: THE
RELATIONSHIP BETWEEN ECONOMIC AND SOCIAL CHANGE
by
é Lowndes F. Stephens

 ‘ Contents of Entire Report:
COMMUNITY ACTION IN APPALACHIA
This is one unit of a report which includes the following units,
each separately bound as is this one:
Unit l--Paul Street, Thtroduction and Synthesis
Quality of Life in Rural Poverty Areas
Unit 2--Lowndes F. Stephens, Economic Progress in an Appalachian
County: The Relationship Between Economic
and SopTal Change
Unit 3-—Stephen R. Cain, A Selective Desppiption of a Knox County
MouhpgTp Neighborhood
Unit Q-—James W. Gladden, Family Life Styles, Social Participation
and Socip;ChTpural Changg
Change and Impacts of Community Action
Unit 5——Herbert Hirsch, Poverty, Participation, and Political
Socializatiohi A Study of the Relationship
Qgpween Participatioh_in the Community Action
Progrhm and the Political Socialization of
The Appalachian Child,
Unit 6——Morris K. Caudill, The Youth Development Program
Unit 7--Lewis Donohew and Br Krishna Singh, Modernization of
Life Styles
Unit 8--Willis A. Sutton, Jr., Leadership and Community Relations
Unit 9--Ottis Murphy and Paul Street, The "Tmage" of the Knox County
Commhnity Action Program
Specific Community Action Programs
Unit 10--Ottis Murphy, The Khpm_County Economic Opportunity Anti-
Toverty_Artg_and_Crafts Store Project
Unit ll--Paul Street and Linda Tomes, Thg Early Childhood Program
Unit l2-—Paul Street, The Health Education Ppogram
Unit l3-—Thomas P. Field, Wilford Bladen, and Burtis Webb, Recent
Home_Qpnstrhctiph_in Two_Appalachian Counties

 ABSTRACT
ECONOMIC PROGRESS IN AN APPALACHIAN COUNTY: THE
RELATIONSHIP BETWEEN ECONOMIC AND SOCIAL CHANGE
The statistical tests conducted with Time-One and Time-Two survey data
indicate that there has been positive economic and social change among the
rural people of Messer, Kay Jay, and Middle Fork communities of Knox County,
Kentucky. Since random sampling procedures were followed and the samples were
large enough, inferences about the rural population of these three communities
can be made.
The data indicate that there has been economic and social change among
these rural families, a change in those characteristics which are related to
economic development, which would appear to be antecedent to greater economic
growth, though one might be expected to lag behind or precede the other for
a time. They are more sensitive to the local, state, national, and international
events that shape their lives,and the statistics indicate that these people are
Spending more hours attending to the mass media in l968 than they did in 1966.
They have more money to spend on the necessities and "luxuries" of life than
they did in l966, although the number of those who are unemployed has increased,
and the employment level of those who are employed has dropped. The implication
of this statistic is that the increased amount of average family income is not
due to an increased exploitation of productive sources of income but to an
§. increased dependency on transfer payments. The aggregate statistics on the
 
ig county point to this ominous fact.
if Furthermore, the center activities are presumably occupying the time
*3
Q; of the most impoverished. The negative beta coefficient in the forty-six
Q
W

 variable problem indicates that as family income increases,the extent, or amount,
· of participation in center programs decreases; the most impoverished are likely
to be the ones to take advantage of the programs. In the spring of l968 more
persons were participating in center programs regularly and more persons were
undergoing economic and social change as indicated by the eleven—variable
' problem run for time-two data. If indeed the community centers in these areas
have been the "hang—outs" where fruitful discussions about common goals and
problems took place, where persons came to converse with young people from
VISTA and other organizations, where persons sought advice on everything from
birth control measures to filling out tax reforms, then the centers have
rendered a great service. The survey data indicate that the community center
concept is not an anathema but consistent with the process of social change.
That is, those persons who showed advancement with respect to certain key
receptiveness-to—change variables in Time Two also were participating more
in center activities. The regression problem results for the eleven variables
in Time Two indicate that social and economic change is underway in these
Knox County communities, and this is the kind of trend that must be encouraged.
It should be noted that the population for the statistical problems
in this project was defined as the rural families living in Messer, Kay Jay,
and Middle Fork. No inferences beyond this population to Knox County as a
whole should be made. Finally, it should be stressed that the lack of adequate
survey data on the economic standards of these families made the development
of a sound and reliable economic scale impossible. More extensive data on
buying habits, investment and savings habits, sources of income, etc., would
have rendered a better picture of the economic conditions of these communities
and the county.
O

 O
ACKNOWLEDGMENTS
Since this investigator joined the OEO-CAP Evaluation Project in June
of 1968, he had very little time to waste in getting his report completed.
Everyone with whom I had to deal on the project was very helpful in directing
me to the data I needed. Special thanks must go to B. K. Singh and Dr. Lewis
Donohew, project investigators, who provided valuable insight into the
approach to the economic phase of the project. These colleagues also made
the necessary data available to me during the hectic months of data
evaluation and interpretation. Thanks must be extended to Dr. Ottis Murphy,
project investigator, who also gave me valuable insight and information
concerning the economic conditions of the rural families in Knox county.
He has included a valuable case study in the final project report entitled
The Knox County Economic Opportunity Anti-Poverty Arts and Crafts Store
Project (Unit l0) which is very germane to my section of the project.
Dr. Murphy also provided me the participation variable information and
explicated the design of this factor. Thanks must also be given the project
director, Dr. Paul Street, whose patience and help made the culmination of
this paper possible.
From the technical end of things, special thanks must go to Dr. Alan
R. Winger and Dr. Richard E. Gift of the Department of Economics, University
of Kentucky, who answered all my questions and reassured me when doubt
began to ensue. And Dr. D. Milton Shuffett of the Agricultural Economics
Department at the University of Kentucky helped me formulate the statistical
approach to this project. Finally, Eldred W. Melton of the Information
· Center, Kentucky Area Development Office in Frankfort, Kentucky, provided
ii

 n{lD ‘
me with valuable statistical information on the South Cumberland Valley
Development Area.
Thanks also to Dr. Lewis Donohew, former immediate supervisor and
professor under whom I studied, for it was his confidence in me that
made this report a reality.
O
iii

 O
FOREWORD
The first part of this report is replete with secondary data presented
as evidence of economic progress or decline in Knox County and three other
contiguous counties that make up the South Cumberland Valley Development Area.
This author was somewhat encumbered with the problem of too little up-to-
date data which could be purveyed as testimony to the economic development of
the area over the last few years. But this is not a unique problem in economic
research, especially for those investigators who have focused on trends in a
particular region (e.g., a county within a state), in a particular industry,
or in a particular developing country where modern and efficient methods of
data collection were not operative.
One of the most formidable problems facing the development economist
is time. It is the lapse of time between forecasting and policy formulation,
between policy formulation and implementation of needed programs, that most
inhibits the development process. Of course, I have assumed here that the
economists' forecast of future needs and future trends is accurate. This is
not always the case, however, because economic trends are largely a function
of human behavior, the charting of which is itself a difficult task.
Economists consult history when trying to predict the economic
behavior of man. Economic forecasting has an historical base, and to the extent
that history provides the cues of what lies ahead, accurate prediction of
economic needs and trends is a function of the number of computerized data
• tapes containing pertinent and contemporary economic and social statistics.
iv

 O
But even if data banks are maintained, the economist is confronted with another
problem when he relates statistics for one month, quarter, or year to comparable
figures for similar time periods. Cyclical fluctuations-—the sporadic and yet
patterned changes in economic trends——can act as bottlenecks in the predictive
process if economists are not careful in controlling for seasonal and yearly
fluctuations. The reader of an economic report filled with data on economic
indicators and comparisons of the data must be aware of the impact of cyclical
fluctuations. Appraisals of current trends in particular industries, for
example, must be interpreted in the light of the economy as a whole and trends
in other industries, the linkage effects of which affect factor prices and
product prices of dependent industries. The reader must also be aware of
the peak and trough months of particular business cycles when he interprets
specific data.
The following pages contain statistics on Knox County and contiguous
. counties as well as data for Kentucky and the nation as a whole. Before the
reader evaluates the county and state statistics as compared to the national
data, he must be cognizant of the cyclical sensitivity of the national and
state economy. The National Bureau of Economic Research establishes the monthly
dates of peaks and troughs in business cycles. There have been three complete
cycles since l9Q8, and the terminal peak of a fourth cycle has not come as
yet since the national economy is in its nintieth month of continued expansion.
The initial peak of the first cycle came in November of l9Q8, the trough in
October of l9&9, and the terminal peak month came in July of 1953. Since cycles
are continuous,the terminal peak of one cycle is the initial peak of the
following cycle. The trough of the second cycle came in August of 1954 and
O
in July of l957 the terminal peak of the cycle was registered. In April of
v

 · 1958 the third cycle reached its nadir and climbed to a high point in May,
l960. The national business cycle trough of the fourth cycle came in
February of l96l.l
In May of 1966, L. Randolph McGee had reported, under the auspices
of the Bureau of Business Research at the University of Kentucky, a report on
the post-World War II sensitivity of the Kentucky and national economics
during cyclical expansions and contractions. Dr. McGee, associate professor
of economies at the University of Kentucky, employed four specific series for
the purpose of comparing the economy of Kentucky with the national economy
during the post-war years: personal income, cash receipts from farm
marketings, non-agricultural employment, and agricultural employment.2
With respect to seasonally-adjusted, monthly, personal income,
Kentucky's average annual rate of increase from l946—l965 was 5.l per cent
compared to a national average increase of 5.6 per cent.3 After employing the
same methods of measuring business—cycle peaks and troughs as the researchers
at the National Bureau of Economic Research, McGee concluded that the peaks
and troughs in the personal-income cycles of the national and Kentucky
economies have roughly coincided with the turning points of the aggregate
business cycle which reflect overall economic activity. Since World War II,
personal income in Kentucky has moved along at the same rate as United States
personal income during periods of expansion; but during periods of
contractions, Kentucky personal income has tended to drop lower than the
- national personal income.A
A IL. Randolph McGee, "Cyclical Sensitivity of Kentucky's Economy," A
research brief published by the Bureau of Business Research, University of
Kentucky (May, l966), p. 7.
· Zygg., p. 2.
Zglbid., p. 9.
qlbid., p. ll. l
vi

 · In the period from January, 1947, through September, 1965, the average
annual, seasonally—adjusted rate of growth of cash receipts from farm market-
ing was only 1.26 per cent for the United States and .92 per cent for Kentucky.
During more recent years, contends McGee, the growth rate has been in favor
of Kentucky. McGee concludes that firm cash receipts in Kentucky have
been, on the average, more sensitive to cyclical contractions and expansions
than the United States series. Generally, the Kentucky series has increased
at a faster rate during cyclical expansions than the United States series,
and it has declined at a faster rate during cyclical declines than the
national series.5
Another series to which McGee alludes in his comparisons is non-
agricultural employment. The average annual adjusted rate of increase in
Kentucky's non-agricultural employment from 1946-1964 was 1.9 per cent
compared to the United States' figure of 1.7 per cent. This particular
series has fluctuated in the same manner as the general business cycle
so that the trends of the series on a national and state level have generally
coincided with the general business cycle. During this period, however,
the Kentucky series has manifested itself as being more sensitive during
peak and trough periods than the national series. So, during periods
of cyclical fluctuations of an expansionary nature, the Kentucky series
has led the national series but lagged its national counterpart during
cyclical declines.6
{Eg., p. 11.
fvygig., p. 13 and 14.
Q., vii 4

 · Finally, McGee compares the state and national agricultural employment
series for the period January, 1950, to December, 1965. The trend lines for
this series indicate that agricultural employment declined in Kentucky
and in the United States. The average annual decline was 2.6 per cent in
Kentucky and 3.4 per cent in the United States. On the average, Kentucky's
agricultural employment is not as sensitive to business—cyc1e contractions
as is the United States series. Expansions are stronger, however, for
, 7
the Kentucky series.
McGee concludes his preliminary report with the following
observations:
Kentucky's economy is more sensitive than the national economy
to both cyclical contractions and expansions. Personal income
during expansions and agricultural employment during contractions
represent exceptions to this general pattern of greater sensi-
tivity. The reasons for greater cyclical sensitivity of the
Kentucky economy are found primarily in (a) the smaller size
of firms, and (b) the industrial composition of §he Kentucky
economy relative to the national economy ....
McGee says that smaller firms encounter more difficulty in adjusting
to economic decline than larger firms and have more survival problems.
He also suggests that during the post—war period Kentucky has been the
birth place of more smaller, marginal firms, relatively, than the
United States as a whole. The author also concludes that Kentu;ky's economy
is very sen;itive to cyclical fluctuations because many of the cyclically
· sensitive industries in Kentucky--1ike agriculture, coal, machinery, and
electrical machinery-—make up a greater part of the industrial structure of
the state than these industries make up for the national economy. The
 
Vibid., p. 15.
· 8Ibid., p 15 and 17.
viii

 · small plant size of many Kentucky firms, coupled with an economy that is
largely dependent on cyclically sensitive industries, have helped make the
state economy more sensitive than the national economy to business cycle
declines and expansions.9
It is always important to evaluate time-series data in the context
of the whole economic picture for the state or the nation, and it is
equally important that the researcher avail himself of all pertinent
information that might have affected the tata he has presented. I ask the
readers of the ensuing pages to keep in mind the fact that the last 90 months
have been unusual months in the history of economic growth in the state and
that there are comparisons of 1960 data with data from the decade of the
l940's and l950's which should be interpreted with this fact in mind. If
we are honest in our research, we can facilitate the development process by
presenting pertinent and valuable data on the economic development potentials
of regions ang countries, data which can provide the basis for research on
future needs and potentials of developing areas.
This author has presented a lot of secondary data collected over
many different and scattered years. It is hoped that this survey of
development-oriented data will provide some cues as to what needs to be
done. But, as the authors of many of the publications used by this
investigator have pointed out, the contents herein should not be construed
as suggestions for policy decisions or the data used on behalf of a
particular approach to the economic development of Knox County.
9;2g., p. 17.
I
ix

 · TABLE OF CONTENTS
Pages
ACKNOWLEDGEMENTS ......................... i
FOREWORD ............................. iii
I. INTRODUCTION ........................... 1
II. RESEARCH AND ANALYTICAL TOOLS .................. 8
III. ECONOMIC GROWTH TRENDS FOR KNOX AND SURROUNDING COUNTIES
DURING THE 1950*s AND EARLY l960'S ................ 14
Population Trends in Knox County and other Counties
in the South Cumberland Valley Development Area, 1940-1960 .... 15
Employment Trends in the South Cumberland Valley Area ...... 19
Trends in Manufacturing: Wages of Production Workers,
New Capital Expenditures, and Value Added Per Worker, 1958-
1963 ............................... 22
Trends in Agriculture for South Cumberland Valley Counties,
19 54- 1964 ............................ 25
Trends in the Timber and Mining Industries in the South
Cumberland Valley Area, 1958, 1960, 1963, 196é, and
1965 ............................... 28
Trends in Personal Income and Some Per Capita Personal
Income Determinants, 1950-1963 ........ . ........ 30
Trends in Wholesale and Retail Sales, 1958-1963 ........ 37
IV. A BRIEF LOOK AT ECONOMIC CHANGES IN KNOX AND CONTIGUOUS
COUNTIES IN THE LATE l960'S ·--··-···-·····.·. 40
V. SURVEY WORK IN THREE KNOX COUNTY COM UNITIES ....... . . . . 46
The Problem ............ . .............. 46
Methodology--Data Collection ................... 50
Results ............................. 55
Interpretation and Conclusions .................. 62
· TABLES ............................. 63
FOOTNQTES ............................ 83
x

 LIST OF TABLES
Tables Page
I. Distribution of Employees in the South
Cumberland Valley Area by Occupational
Level, 1960 ..................... 23
II. Messer, Kay Jay, and Middle Fork Time I
and Time II Responses to Nine Economic
Variables and a T—Test of Significant
Mean Differences .................. 65
III. Messer, Kay Jay, and Middle Fork Time I
and Time II Responses to Some Participation-
Oriented Questions and a T-Test of Sig-
nificant Mean Differences .............. 69
IV. Statistics of Four-Variable Multiple
Regression Problem .................. 75
V. Statistics of Forty-Six—Variab1e Multiple
Regression Problem .................. 76
VI. Statistics on Eleven-Variable Multiple
Regression Problem .................. 81
QI, xi

 O
CHAPTER I
INTRODUCTION
The problem of economic development is not peculiar to the so—called
developing countries of the world suffering from a shortage of raw materials
and entreprenuerial talent but is a problem that plagues the modern
world as well. For example, despite a gross national product that exceeds
$700 billion, an average per capita income of $2,940, and an unemployment
rate of less than 4.0 per cent, the United States has failed to feed
adequately l0 million of its people and many more have failed to increase
their family incomes above the poverty line of $3,000 a year.l For
these impoverished Americans, the United States is the land of the affluent
that has failed to provide for those who have not the talent nor resources
to capitalize on her wealth.
It is difficult to couch the development problem into a totally
economic context because the poverty malady is to be understood only after
the attitudinal, social, and cultural syndromes are interpreted and
analyzed. Economic plans replete with suggestions for increased per capita
output and employment within the depressed or primitive agrarian sectors
of developing economies have been operationalized and greeted with no
discernible increases because of the failure to recognize the cultural
and psychological syndromes of the development problem. There are
anthropologists who contend that something inherent in a people, per se,
. and not in the land or the physical resources necessary for economic growth
l

 · 2
makes the iden of innovation, social and economic change, anathema to their
heritage or culture. Other researchers,like communicologists, sociologists,
political scientists, and anthropologists contend that political and social
change must precede or progress with economic growth before the euphoric
feeling of modernity takes hold of the impoverished people.
But of concern to us in this phase of the OEO-CAP Evaluation Project
are the economic indices of growth that have characterized the Appalachian
region in Kentucky with specific interest centered in Knox County, where
community action centers have been in operation since l965. The task
involves the isolation of certain short—run indices that afford some
testimony of the economic strides or declines being made in Knox County
since the community development approach was operationalized in 1965. Once
the meaningful indices are located and analyzed over time, the problem
of making associations between these gains or declines and the presenge
of the CAP evolves.
Within the literature on economic development may be found many
contradictory d€fi¤iKions of a "developing region or country," because
the development economists are not consistent in their appreciation of
particular short—run indices of economic growth which reflect develop-
ment. Some economists contend that industrial output vis—a—vis total
output or industrial population as a percentage of the total population
is the key index of economic change and growth. Others put great stock
in the ratio of population to land area; others contend that measures of
accumulation of capital, its rate and volume, are the paramount indices
· of economic growth.2 Certainly growth depends on the size and quality
of the labor force, the availability of natural resources, the quality
and extent of technology, and the amount of investment in social over-

 3
O
head capital (i.e., investment in education, public utilities, highways,
etc.), but not all the indices begin to show discernible increases at
the same time or within a time period as short as three to five years.
A reasonable definition of a developing economic country, at
least for our purposes and our given time period, is afforded by Jacob
Viner: "It is a country that has good potential prospects for using more
capital or more labor or more available natural resources, or all of
these to support its present population on a higher level of living, or,
if its income level is already fairly high, to support a larger population
on a not lower level of living."3 This definition can be adapted to
developing regions, it seems.
The emphasis, according to Viner, lies where it plausibly belongs,
and that is on per capita levels of living. On the basis of this
definition, a region may be underdeveloped whether it is densely or
sparsely populated, whether it is capital-rich or capital—poor, whether
it is a high—income-per-capita or a low—income-per—capita region, or
whether it is an industrialized or predominantly agricultural region. So
the issue, the key criterion, becomes whether the region has good
prospects of raising per capita incomes, or of maintaining an existing
high level of per capita income for an increased population.4
Per capita income, then, is an index that is ascertainable and meaning-
ful as a gauge of change. It is a per capita measure of income that attests
to the problems that a particular region or country encounters as it
attempts to move into the take-off stage toward some semblance of sus-
i · taining growth. If the employed labor force within a developing region
begins to make strides toward better efficiency via greater gains in

 4
O
per capita output, the per capita income of the working man should reflect
a marginal increase in his output. Unfortunately, in countries and
regions characterized by low capital-to-labor ratios, the marginal product-
ivity theory of wages seldom holds true. In industrial urbanized areas
where this ratio is high, workers are paid more nearly the value of
their marginal products. The increased efficiency and quality of the
labor force is also a function of the amount and efficacy of investment
in human resources; investment in sanitation and health facilities,
in education and transportation, should augment the quality of the labor
force and result in increased production. So the low productivity
bottleneck to development is manifested through per capita incomes as
an index of growth.
A second bottleneck to economic development and one alluded to by
Viner, scarcity of capital, can also be guaged by a look at per capita
incomes.5 Certainly, capital accumulation by the private sector is
largely a function of the amount of personal savings, the quality of the
labor force, the quality and extent of credit and savings institutions,
and the amount and focus of corporate investment within the various
sectors of the developing economy. When per capita incomes begin to
ris€,the marginal propensities to consume and save on the part of pro-
ductive individuals should increase proportionately. When there is a
discernible increase in disposable per capita incomes, and when the extent
and quality of savings institutions is adequate, then savings and invest-
ment should ensue and multiplier effects should be set into motion with
· the result hopefully being increased production, employment, wages, and
general growth. Of course, sound monetary and fiscal policy help curtail
or abate the ominous by-products of spiraling growth (i.e., inflation, _

 5
I
increased prices and wages, etc.) but not even together are they able to
secure increased employment, growth, and price stability simultaneously.
Per capita income should be a sound and meaningful indicator of the
extent of capital accumulated in a developing region.
Another bottleneck to economic development discussed by Viner in
the context of developing countries is the population rate of growth.
When there is a glut of persons in the age categories of below 16 and
over 60, a developing region usually suffers from a lack of manpower
and from a plethora of persons living on government transfer payments. Again,
per capita measures of income afford a good index of population growth
and some measure of the increase in manpower potentials. In an area
like Appalachia, the problem is not so much a glut of unproductive
individuals as it is the lack of enough manpower, skilled and motivated
to learn, to entice industry to locate within or near the region. The
need for a productive increase in manpower on a statewide level was
forecast for Kentucky by Dr John L. Fulmer, who was director of the
Bureau of Business Research at the University of Kentucky when the
prognostications were made in January of 1965. Fulmer contends that in
order to maintain the 1960-63 population growth rate of 27,100 annually,
at least 142,000 jobs net must be added to the Kentucky economy by 1975.
Another 59,000 jobs should be created in order to raise the ratio of
jobs to population of the state to a level comparable with the rest of
_ the South. This 59,000 increment in jobs would increase Kentucky's
. employment ratio to 34.4 per cent in the period from 1963 to 1975 and put it
· in line with the ratio of other Southern states; this increase in the
employment ratio (ratio of employed to total population) from 31.4 per cent

 6
I
in 1960-63 to 34.4 per cent in the period from 1963-75 would represent an
increase of 42 per cent over the job-creation rate that occurred from 1960-63.6
Fulmer explains what this increment in population and productive
manpower can do for business and personal incomes benefitting from the
new employment. If the lower goal of 3,464,000 population growth for
Kentucky materializes, then projected personal income for the period
1963-75 should increase by 70 per cent and retail sales by 70 per cent. If the
higher goal of 3,712,000 population is reached within this period, total
personal income and retail sales should increase by 82 per cent to $l0,082,000,000
and $5,948,000, respectively. Fu1mer's projection of retail sales
stems from the estimated personal income accruing as a result of increased
employment, and, in most of the period from 1930 to 1965, retail sales had
represented around 59 per cent of total personal income. So, Fulmer has
utilized four indices to measure economic development potentials for
Kentucky during the period from 1963 to 1975 and has demonstrated how these
variables--population growth, employment, income, and retail sales--are
interdependent.7
Professor Fulmer has identified other short—run indices of economic
change which are related to per capita personal income. Statistics on
the rate of population growth, the employment ratio, and the volume of
retail sales will be reviewed in the ensuing analysis as short—run measures
of economic change.
In July of 1966, staff members of the Bureau of Business Research at
the University of Kentucky completed, under the direction of Professor
· Fulmer, a massive data book entitled Development Potentials for Kentucky
Counties with Related Statistics. Much of the data reported in the

 · 7
ensuing analysis has come from this compendium of development potentials
for the state of Kentucky and its counties. Statistics on population
-rate of growth, the employment ratio, the urban ratio, annual earnings
of production workers in manufacturing, value added per manufacturing
worker, per cent employed in agriculture and manufacturing, median years
of schooling, distribution of total personal income among various sources,
and many other statistics reflect economic changes in the counties and
{the state. All of th