Changing Gears is a public media project about the future of the industrial Midwest. Each week, reporters Dan Bobkoff in Cleveland, Niala Boodhoo in Chicago and Kate Davidson in Ann Arbor cover issues of interest to the Great Lakes region. Changing Gears also sponsors public events and conversations.
Next Wednesday, Changing Gears will co-host a town hall-style discussion that explores the global economic crisis and its impact throughout the Great Lakes region.
Robin Young, host of public radio’s Here & Now program, will moderate the event, which begins at 7 p.m. in the Blau Auditorium at the University of Michigan’s Ross School of Business. Admission is free and the event is open to the public.
Panelists include Linda Lim, Professor of Strategy at the Ross School, Doug Rothwell, President and CEO of Business Leaders for Michigan and Changing Gears senior editor Micki Maynard.
Michigan Radio and the Ross School of Business are co-sponsoring the event with Changing Gears.
Three stories making news across the Midwest today:
1. Ohio misses tax revenue. Ohio businesses are losing out of “hundreds of millions” because internet companies do not collect tax dollars at the point of sale, according to a report from the University of Cincinnati’s Economics Center. Over a six-year period, the study’s author said the state will miss $1.1 billion between 2007 and 2012. At the same time, the competitive disadvantage for store-based retailers would result in a $600 million loss, Jeff Rexhausen, the study’s spokesperson, tells our partner station, Ideastream. He says approximately 11,000 jobs could be created if the loophole is closed.
2. Mixed Chicago real-estate numbers. In September, sales of all Chicago properties rose 6.8 percent year over year, and were accompanied by a median price increase of 5.6 percent. Outside the city, the story was a little different. In the nine-county Chicago area, sales rose 13.3 percent year over year, but the median price declined 8.6 percent to $160,000. The biggest drop came in Kane County, which endured a 20 percent median-price decline. “The slow economy and job recovery are sever drags on the market,” Loretta Alonzo, president of the Illinois Association of Realtors, tells the Chicago Tribune. “Plus, many able buyers are hitting roadblocks on financing a home purchase due to the overcorrection in mortgage underwriting requirements.”
3. Michigan unemployment rate down. Michigan’s unemployment rate fell by one-tenth of one percent in September, settling at 11.1 percent. Total employment rose by approximately 4,000 and the number of unemployed fell by 6,000, according to the Detroit Free Press. The rate is two percentage points higher than the national rate of 9.1 percent. Although the decline was the first since April, it was too miniscule to indicate the direction of the state economy, according to the newspaper. The flat rate hides an upswing in hiring, Jim Thompson, vice president of business development at JMJ Phillip.
All week, our Magic Bullets series has focused on big ideas that political leaders say can boost the economy. One you hear mentioned often is small business. But can small businesses really grow enough to help the overall economy? That’s what I set out to find out.
It’s not just Obama. Warm feelings about small business come at all levels of governance, and on both sides of the aisle. Michigan’s Republican Gov. Rick Synder is the darling of the state small business community. Earlier this summer, at the Small Business Association of Michigan’s annual meeting, he urged members to “Talk about the jobs you’re creating, even if it’s one”, because, he that would be the “backbone of the reinvention of Michigan”.
Three stories making news across the Midwest today:
1. Ford deal official. In a final tally, the United Auto Workers announced today that 63 percent of production workers and 65 percent of skilled-trade workers voted in favor of ratifying a four-year contract with Ford. “I believe UAW Ford workers understood the importance of each and every vote,” UAW Vice President Jimmy Settles said in a written statement. Earlier this month, UAW workers approved a new contract with General Motors by similar margins. Chrysler is the only Big Three automaker without a new contract, although voting began Tuesday on a tentative agreement.
2. Great Lakes crucial to economy. Cargo shipping throughout the Great Lakes supports 227,000 jobs and channels billions into the U.S. and Canadian economies, according to a report released Tuesday. “This report bears out what we’ve long known – that the Great Lakes-St. Lawrence Seaway is crucial to the U.S. economy,” U.S. Transportation Secretary Ray LaHood told WBEZ, our partner station. In July, Changing Gears reporter Kate Davidson examined the economic impact of Great Lakes shipping – and found a dredging backlog threatened to cripple the regional shipping industry.
3. Milwaukee lakefront plan unveiled. An “ambitious” plan to redevelop Milwaukee’s lakefront was unveiled Tuesday at a public hearing,calling for better pedestrian access to waterfront attractions and room for several blocks of development. The plan, submitted by Milwaukee County’s Long-Range Lakefront Planning Committee, endorsed tearing down freeway ramps, terracing O’Donnell Park and bulldozing the Downtown Transit Center, according to the Milwaukee Journal Sentinel. “Let’s take downtown and take it to the lake and vice versa,” Parks Director Sue Black said of the pedestrian portion of the plan.
Back in April, we did a story on the untapped potential in the Midwest’s music industry. Today, we have a better sense of the state of Cleveland’s music industry. For the first time, researchers have conducted a comprehensive study on employment and spending in the sector.
First, the economic impact number: $840 million. That’s how much the study says the music industry contributes to the Cleveland area economy.
But that impact comes from relatively few workers. In Northeast Ohio, about 6000 people work in the music industry. That includes everything from orchestras to record shops. In Cuyahoga County just 2700 work in music. That’s less than half a percent of the workforce.
“It’s really quite remarkable how small but mighty the industry really is,” she said.
Puch says there’s a lot more potential here. Cleveland has a music reputation: for its Rock and Roll legacy and the Cleveland Orchestra. And, she thinks the music scene could benefit more from the region’s traditional industries: manufacturing and healthcare. Making musical instruments and music therapy are two areas for growth, she says.
The study is considered the first comprehensive look at the industry. It used a combination of surveys and labor data. And, while the total employment numbers are tiny, the report found that the music industry’s employment was actually more stable than the workforce on the whole.
Detroit is the latest metro area vying to become a medical destination. The hope is that its hospital systems can draw patients from outside its region, helping the local economy. In short, Detroit wants to be more like Cleveland. But Cleveland could be tough to copy.
CHICAGO – Think the recession has been rough on your wallet? Consider this: Latino families, an ever growing part of the Midwest, saw a 66 percent decrease in wealth between 2005 and 2009, losing $2 for every $3 saved during that time.
That’s the first of many sobering statistics about Latino families that were presented by my public broadcasting colleague Ray Suarez of PBS NewsHour this morning at a Latino Policy Forum breakfast. Suarez said that Latino familes’ average wealth went from $18,359 in 2005 to just $6,325 in 2009.
Why? Suarez spoke about the “tumbling dominoes” of the heavy concentration of Latinos who work in construction, as well as families’ disproportionately high exposure to sub prime loans and diminishing home equity.
(The Economic Policy Institute wrote a few years ago about the tie between Mexican workers in construction and how housing start data can be correlated with the actual amount of money being sent back to Mexico.)
Consider the United Auto Workers tentative agreement with Ford as good as ratified.
While voting does not end until later today, all signs point to approval for the four-year contract that offers $6,000 signing bonuses but no annual cost-of-living adjustments. In a Tuesday morning update, the UAW Ford Department said 63.2 percent of voters had approved the deal, with 78 percent of Locals reporting results.
Voting ends Tuesday night. But it would take a huge reversal in voting trends for the ratification to fail. The Detroit Free Press reports there is still “major opposition” to the deal at two assembly plants in Louisville, Ky., where approximately 5,000 votes have yet to be counted.
GRAND RAPIDS — Three years ago, the advanced battery industry in the United States existed only in the imagination. Plenty of people believed electric cars would be the next big thing. and they would be powered by lithium ion batteries – the same kind of batteries that are in cell phones and laptops. But in 2008, almost all of the lithium ion batteries in the world were made in Asia.
Randy Thelan, who heads the economic development office in Holland, Mich., a small town on the shores of Lake Michigan, thought that could change. Thelan had heard one his local companies, Johnson Controls might be getting into the battery business.
“It wasn’t like we were making a direct pitch that we knew they were building a factory,” he said. “It was just sort of planting the seed, and suggesting to their leadership, keep Holland in mind as you guys are looking to invest and add to their capacity.”
While Thelan was working his angle for Holland, the state of Michigan was about to make a big commitment to the new future in batteries.
In December 2008, former Mich. Gov. Jennifer Granholm signed a new law to offer up to $335 million in tax incentives for battery companies in Michigan. Within a year, Holland landed that Johnson Controls battery plant.
The next year it landed another one for LG Chem. And now, just down the road in Muskegon, Michigan, another lithium ion battery plant is going up. Thelan estimates these companies and their suppliers will have created about 750 jobs by the end of the year.
“But ultimately, by 2020, we believe this is a 10,000 job, $2 billion opportunity for West Michigan and we’re well on our way,” he said.
Three stories making news across the Midwest today:
1. Illinois Gov. rejects big gambling. After months of more subtle indications he would not sign a sweeping bill that opens Illinois to 14 new casinos, Gov. Pat Quinn made his position official with a blunt statement Monday. “I’m the final word,” he told the Chicago Sun-Times. “Casino gambling at 14 different locations in Illinois is way too much. We have no interest in becoming the Las Vegas of the Midwest.” Quinn suggested he would sign a scaled-down bill that allows for a Chicago casino and a handful of others – if some revenues boost education coffers in the state.
2. Ohio Dems push new referendum. An Ohio Supreme Court ruling Friday has paved the way for a Democrat-backed referendum on new congressional district lines. They consider the Republican-drawn lines unfair – a position backed by the court – and are seeking 231,234 signatures needed for a November 2012 referendum on the issue. The Columbus Dispatch reported Tuesday the entanglement could throw Ohio’s 2012 primary election “into chaos,” and the GOP-controlled state legislature, has been called into session this week to address the issue.
3. More jobs ahead at General Motors? After a decade of subpar offerings in the compact car market, General Motors CEO Dan Akerson tells the Detroit Free Press that, based on recent compact successes, he foresees adding more jobs on top of the 6,400 called for in the recent UAW contract, possible in Orion Township, Mich. and Spring Hill, Tenn. He foresees gradual introduction of more two-tier employees. “We’re not trying to hurt anybody,” he tells the newspaper. “We’re trying to stay strong. So over time, as part of the labor contract, we would buy out some of our more senior employees. … We’ll get there, but we don’t need to be punishing.”