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The Multiplier Effect
By George Porter
In case you are not familiar with the multiplier effect, it
is a term used in the financial world to describe what happens
when money is introduced into an economy. If for instance you
spend a dollar for donuts in your hometown the town will seem
at first to be $1.00 richer. You have only put one dollar in the
local economy but after the donut guy receives the money he then
spends $.50 on sugar and $.50 on flour to make more donuts. The
sugar store spends $.25 on office supplies to keep the books and
$.25 on the electric bill. The office supply spends some of the
$.25 for gas for their delivery van and so on until the dollar
has spread itself out so much in so many places that it leaves
no more tracks. When economists measure the worth of an additional
amount of money in an economic system they use a multiplier effect
because so many people can spend the same dollar. It is as though
$1 can become $7 or maybe even $15 depending on how the system
uses its money.
The same can apply to people and services. You will recall
last month that you were told about the new course on Manufactured
Housing and Repair being taught at Somerset Community College
and Kentucky Tech in Somerset, Kentucky. It has been put to an
additional use that promises to dramatically change the way that
manufactured homes in Kentucky are inspected.
The state has had installation regulation for many years and
the system works very well except for one major area. The Fire
Marshall's Office, which is the regulating authority in the state,
has only five or sometimes six inspectors. Last year the industry
in the state sold over 13,500 new homes and a lot more used ones.
In order for the inspectors to check every installation each inspector
would have to check at least 28 homes a day, every day, five days
a week for 52 weeks a year! This is impossible. Kentucky has wisely
chosen not to solve the problem by just authorizing local county
or town building inspectors to do the inspections in their region.
They want the homes inspected by someone who knows exactly what
they are looking at and is trained and experienced in our type
housing. In their mind having it done by an inspector who doesn't
know what he is looking at is worse than no inspection at all.
Kentucky has a fine program of training and regulation. The
vast majority of dealers and installers in the state have little
to no problem with these regulations as long as everyone has to
follow them. Here is the problem, very few of the homes setup
in Kentucky are ever inspected and if you chose not to follow
the rules it might be quite a while before you are discovered.
They need more inspectors but they need them well informed and
knowledgeable on Manufactured Housing.
Charles Wiley at the Fire Marshals Office came up with what
may be the solution. What if experienced people in the industry
took the training course at Somerset Community College and Kentucky
Tech? They would all be exposed to the same standard and became
qualified to apply for a new Third Party Inspectors License. Then
the five or six state employees could oversee and regulate the
workings of several inspection companies around the state. The
state would not need a larger budget or more staff and the industry
and the citizens would be served by people who were qualified.
Not many inspectors in the nation have ever setup even one home
and with this program in Kentucky you can't be an inspector unless
you have actually done the work before, probably for many years.
This promises to combine the law with practical experience and
judgment, it sounds like a good idea to me.
If we apply the multiplier effect, one state inspector can
become maybe 10 local third party inspectors. One of the new inspectors
can cover the work of perhaps 10 setup crews. With six original
state people the system now contains 600 people who are directly
concerned with following the laws of Kentucky. The numbers will
expand or shrink to fit the market and many third party inspectors
will only do inspecting as a sideline to their regular job, but
it is a system that holds much promise and it will be interesting
to see how it develops. Good Luck Kentucky!