The Midwest Economy Is Getting Better. Will The Transformation Continue?

Grand Valley State University is building its new business school on the site of a former factory. Credit: Dustin Dwyer.

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The data is in, and the Midwest economy seems to be on the path of recovery. Our long, regional nightmare still isn’t over for many workers, but there are plenty of signs for optimism. Businesses are hiring, productivity has increased.*

All of this got us thinking: What will happen to the transformation of the Midwest economy when we do finally recover from this horrendous recession? Will we go back to our our old ways, or will we continue to change?

It is not hard to find examples of change in the Midwest. You stumble upon it everywhere you go.

So this week, I met with an economist named Paul Isely, at Grand Valley State University. And to see an example of change, we just walked across the street from his current office in downtown Grand Rapids, Michigan. We went to a huge construction site, where the economics department will move next year.

Isely’s new office will be where a factory used to be. The factory sat empty until GVSU tore it down last year to build the new business school.

In one sense, this kind of change happens all the time in cities: old buildings get torn down or rebuilt. New uses are found.

But it also represents some of the bigger, structural changes in our economy – where once this site was part of our manufacturing economy, now it will do something else. These changes were happening before the last recession. And Isely says they will continue after the recession.

But he says there are limits to the change. For example: the auto industry. Two years ago, politicians in Michigan bemoaned how dependent the state is on the auto industry. But Isely says, it’s an industry that creates a lot of value.

“So it’s very very hard to go away from that to something that creates less value,” he says. “There’s just not a lot of reason to do it. We’ll suffer the ups and downs.”

And since we seem to be headed on the way up again, Isely says there are new risks for all of our manufacturing companies to slip back in the old way of doing business.

“The problem is, as you come out of a recession, you often have all your resources start to be used making the stuff you made before,” he says. “And if you’re busy all the time, you don’t have time to think about, ‘How do I change all this?’”

The risk of falling into complacency, it’s not just for companies, but for everyone involved our economy.

“I remember even in the early 90s, people were saying, ‘Wow, look, our employment is growing, output is growing,'” says economist Ziona Austrian. She heads the Center for Economic Development at Cleveland State University’s College of Urban Affairs. “We forgot to compare ourselves to the rest of the country. They were doing so much better than us.”

Part of the problem, according to another economist, is that when Midwest leaders do make comparisons, it’s the comparison of one Midwest state against another. Our neighbors are seen as our competitors, when, in fact, we’re incredibly connected.

“It’s one of the largest, most integrated markets in the world,” says Geoffrey Hewings, who heads the Regional Economic Applications Laboratory at the University of Illinois.

“I mean, $500 billion worth of goods and services move between Wisconsin, Illinois, Indiana, Ohio and Michigan,” Hewings says. “And yet most of the governors look upon each state as a balkanized entity.”

And whenever he hears about a governor who’s trying to lure business across the border, or hears someone cheering for another state’s bad news, Hewings cringes a bit. He says anything bad that happens in one Midwest state is bad for all Midwest states.

A lot of things have changed in the Midwest economy over the past decade. But Hewings says the lack of cooperation is one thing that hasn’t.

“I get a little jaundiced about the ability of our politicians and policy-makers to see this bigger picture,” he says.

But it’s not just up to them to work together. We’ve already been through a lot of change as a region. Some changes happen to you. Some changes, you have to make happen.

Midwest Migration: What’s So Great About Austin? Plenty, According To Former Midwesterners

This week Changing Gears is taking a closer look at the Midwest Migration, and we’re talking with people who have left the region. Reporter Peter O’Dowd met with some of those former Midwesterners living in Austin, Texas, and brings us this report:

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The Brookings Institution reports that 20-somethings fled Detroit and Chicago at the end of the last decade for places like Seattle and Portland. Cities they thought were cool. “Cool” has become a selling point for young professionals. And perhaps no city has it figured out better than Austin, Texas. Over the next few days Changing Gears will profile people who have left the Midwest, and that’s where we go next – to the home of music festivals known around the world.

John Livingston at the Pour House in Austin, Texas / Credit: Peter O'Dowd

John Livingston and his friends say Austin has a soul, and on a gorgeous Friday night in March you can see why.

Livingston is a lot like any other 24-year old. He and his friends still like to party, and on this night, they’re doing it on the north side of town.

Not long ago, Livingston and four others moved to Austin from Bloomington, Indiana.

It was January 2010. College was coming to an end. The friends were drinking at their favorite hang-out, and wondering what to do next in life. It was pretty clear that Bloomington – a city of 80,000 and home to Indiana University – didn’t have what they wanted.

“We just started thinking of places to go – something different, something new. By the end of the night we were all just chanting Austin. We wanted to go to Austin. We were all about Austin,” says Livingston.

Continue reading “Midwest Migration: What’s So Great About Austin? Plenty, According To Former Midwesterners”

Midwest Migration: The Appeal Of Portland

Carla Danley / Credit: Chris Lehman

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If you wanted to start life over in a new place, would you choose somewhere with a chronically high unemployment rate and struggling schools, or one that’s known as a haven for slackers? The latter is one way to describe Portland, Oregon.

It seems like everyone is talking about Portland these days. Part of that has to do with the success of Portlandia, a sketch comedy show that pokes fun at Portland’s young hipster crowd. As one character explains, “Portland is a city where young people go to retire.”

But not everyone who moves to Portland is a twenty-something slacker. The city still draws out-of-state transplants, including highly educated professionals.

More than half of all Oregon residents were born somewhere else. As part of our Changing Gears project, reporter Chris Lehman introduces us to two families who moved to Portland from the Midwest. Continue reading “Midwest Migration: The Appeal Of Portland”

Measuring The Costs And Benefits Of Retraining

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Todd Debenedet is starting over. He's retraining in Jackson, Mich.

Measuring the success of retraining programs used to be straightforward. You just looked at how many people got better paying jobs. Now the emphasis is shifting from how job seekers benefit to how taxpayers benefit too. That’s because some federal funds for workforce development are shrinking, and local agencies have to do more to make their case.

In the Midwest, we hear a lot about retraining. A lot of the money for retraining and other job services comes from the federal government, through the states, to local programs like this one in Jackson, Michigan.

Sparks fly as Ron Waldon grinds the surface off a steel block. Soon he’ll learn to be a CNC operator– someone who can program computerized milling machines. It’s a hot skill for a guy who’s had a rough few years. Continue reading “Measuring The Costs And Benefits Of Retraining”

Your Story: Different Ways To Measure Retraining Success

JoAnne Jachyra learned about the Trade Adjustment Assistance (TAA) program when she was laid off from her IT management job in 2009. TAA is a federal program that funds retraining for workers who lose their jobs to international competition.

Jachyra qualified for the funds and used them to go back to school, something she’s always wanted to do. “Ever since I graduated from Michigan State with a degree in astrophysics I had entertained the idea of becoming a teacher,” says Jachyra. “I had to do a process and say ‘OK well here’s what I want to do, here’s how long it’ll take, here’s how much it’ll cost.’ And part of that is they have a list and they say ‘these are the growing professions that you can get trained in because we feel that you will be able to find a job when you are done with that.’” Teaching was on that list.


Jachyra spent a year in an accelerated degree program – the cost was about $3,000 – that was paid for by the TAA. “It didn’t cost me anything other than time and a lot of effort,” says Jachyra.She got her certification to teach high school and middle school math and physics, but finding a job proved more difficult than she had expected. “I seriously thought being certified as a physics and math teacher I should be able to walk into any school in metro Detroit and have a job,” she says. Continue reading “Your Story: Different Ways To Measure Retraining Success”

To Prepare Workers, Retraining Programs Try To Predict The Future

Sarah Alvarez contributed to this story.

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Unemployment numbers in the Midwest are bad. Not as bad as when the recession was at its worst, but there are still a lot of people looking for jobs. Even so, we keep hearing that some employers can’t find enough skilled workers. Michigan Governor Rick Snyder says in his state alone, there are more than 77,000 job openings that can’t be filled.

Wendy Whitmore. Credit: Preeti Upadhyaya

There is really only one way to bridge that gap. People need training. And the way people are getting that training is changing.

Wendy Whitmore is the CEO of EMR Approved, a company in Chicago that works with doctors and hospitals that are making the switch to electronic medical records.

Four years ago, EMR Approved didn’t exist. Back then, Wendy Whitmore was running SSG Consulting, an IT consulting firm that wasn’t doing so well.

So she decided to try something new, and she took 12 of her employees with her.

Whitmore still runs SSG Consulting, and some of her employees straddle both businesses, but what they’re doing now is totally new.

Continue reading “To Prepare Workers, Retraining Programs Try To Predict The Future”

Romney Aims For A Big Midwest Win In Illinois

Illinoisans are casting their votes today in the state’s Republican primary. If polls are correct, former Massachusetts Gov. Mitt Romney is heading for his first blow out victory in a Midwestern state. 

He had unexpectedly close contests with former Sen. Rick Santorum in Michigan and Ohio, which made the Illinois primary more important than most political watchers thought it would be.

Illinois has 54 delegates up for grabs, fewer than Ohio, but more than Michigan. Romney has a strong organization in the state, while Santorum failed to file full slates of delegate candidates in four Congressional districts. If he were to upset Romney, he could win no more than 44 delegates, the Chicago Tribune said.  Continue reading “Romney Aims For A Big Midwest Win In Illinois”

Buy Here-Pay Here: Get a Ride, Don’t Be Taken for One

Matt Ghazal runs a Buy Here-Pay Here business in West Michigan. He's trying to change the sector's reputation.

In the Midwest, it’s hard to get around without a car.  These days, people are holding onto them longer.  The average vehicle is almost 11 years old and used cars prices are on the rise.  All this adds to the pressure on the bottom rung of consumers: people with bad credit.  For many, the only way to finance a car is at a Buy Here-Pay Here lot.  Here, dealers loan to deep subprime customers at interest rates up to 25%.[display_podcast] Continue reading “Buy Here-Pay Here: Get a Ride, Don’t Be Taken for One”

Midwest Memo: SOS, Metro Rankings and an Economic Paradox

Slowing down in the second year? Michigan Governor Rick Snyder delivers his State of the State address tonight. Rick Pluta of the Michigan Public Radio Network reports the governor’s speech won’t have as many new initiatives as the last one. Snyder’s first year in office was busy. As the Detroit Free Press put it: “He came, He saw, He got what he wanted.”

Ranking cities The Chicago Tribune has a write-up of a new study that tracks economic growth in cities worldwide. The report, from the Brookings Institution, ranks Chicago 139th out of 200 global cities that were studied. What the Tribune doesn’t mention is that Chicago was ranked lower than a number of other Midwestern cities. The Detroit Free Press takes a look at Detroit’s jump in the rankings from 192nd a few years ago, to 72nd today. But the highest ranking in the Midwest goes to Milwaukee, at 56th. And Indianapolis had the lowest ranking of all Midwest cities, at 183rd. But, really, it’s not great news for anyone in the U.S. The study’s authors say 90 percent of the fastest growing metropolitan areas in the world were outside of North America and Western Europe.

Huzzawha? The Illinois Statehouse News reports on an economic paradox. Taxes have increased in the state, but so has the number of businesses and the number of jobs. But, the unemployment rate is also climbing. If that sounds confusing to you, you’re not the only one.

Tell Us: How Is The Economy Faring In The Great Lakes Region?

You’ve been hearing our reports on the economic transformation of the industrial Great Lakes. Now we’d like some input from you.

How do you think the economy is faring in the Great Lakes region? Please take our survey.

Your views will be kept confidential and we will never share your personal information. But you can help us understand the quality of life in the Great Lakes, and guide our partner stations Michigan Radio, WBEZ Chicago and ideastream Cleveland as we cover these stories.

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