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Rockdale’s Economy: Where We Started to the Present

Rockdale grew from a sleepy farming and railroad stop to a manufacturing town in the 1950’s when ALCOA started.  In the early 2000’s, both ALCOA and the Luminant power plants shut down and the town has not been the same since.  Some may call this a negative economic adjustment – you will soon see this was an economic trauma.

Please grab your December 22, 2022, edition of the Rockdale Reporter to read a republished article from Mike Brown who described the final Luminant plant closing trauma in graphic detail.

Economic growth theory states that an economy expands when there is more activity in “traded” industries such as manufacturing, agriculture, or mining, and “primary jobs” are created.  These primary jobs create goods which are then sold outside the local market – in return, dollars are imported into the community.  Imported dollars then get spun around in “local” industries such as restaurants, hair salons, and retail stores.  As a result, the total economy grows and can be prosperous. 

The opposite happens when primary jobs are eliminated.  There are less goods sold and fewer dollars imported.  With less money circulating, the local industries suffer and some eventually close. 

Economists measure an economy’s size by Gross Domestic Product (GDP), the total amount of goods and services produced over a given period.  The federal government publishes data on Milam County’s GDP going back to 2001. Therefore, we can measure the size of the local economy and see if it is expanding or contracting and which sectors are changing.

You can see in the chart how GDP rose shortly after ALCOA’s closure. (GDP does not always equate to job growth or loss.)  From the bottom in 2020, Milam County’s economy is half what it was from its peak around 2011. 

Oddly, after ALCOA closed, it was the Utilities industry that experienced offsetting growth which allowed total GDP to rise to the 2011 peak.

The Milam County economy would need to grow by $514 million to return to its’ 2011 peak.  Particularly, manufacturing would need to grow by $195 million and the utility industry would need to expand by $319 million to return to how things were.

Now that we understand the extent of the economic trauma, we can start to discuss what can be done.  Simply, the remedy is economic growth – particularly in the manufacturing sector.  Or, differently put – Rockdale needs a new, modern manufacturing sector.  The utility industry is unlikely to return as the Sandow Lakes power plants were coal fired.  This places greater emphasis on diversifying the local economy not only with different employers, but with manufacturing businesses operating within different industries.

There are many reasons to expect that this can be achieved, but that will be for a different article.

Even though Rockdale was knocked down, this will be a great comeback story.  We are going to do great things in Rockdale, Texas!