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November 17, 2011 | 12:00 PM | By Pete Bigelow

Midwest Memo: Michigan’s Unemployment Rate Drops, Indianapolis Plant Stops Using Coal, Hearing Held On Milwaukee Streetcar

Three stories making news across the Midwest today:

1. Michigan’s unemployment rate drops. Michigan’s unemployment rate fell a half-point to 10.6 percent in October from 11.1 percent in September, according to numbers released Wednesday from the Michigan Department of Technology, Management and Budget. It was the second straight month the state’s rate declined. The decline came “due primarily to a reduction in the number of unemployed individuals actively seeking employment,” Rick Waclawek, director of the Bureau of Labor Market Information & Strategic Initiatives, said in a statement. Nationally, unemployment claims fell to a seven-month low Wednesday, according to our partner station WBEZ. The four-week average fell to 396,750, the first time the average has been below 400,000 in seven months.

2. Indy Plant Eschews Coal For Natural Gas. A plant that generates steam for heating some of Indianapolis’ biggest downtown institutions will convert its coal-burning boilers to natural gas. Citizens Energy Group CEO Carey Lykins tells the Indianapolis Star the project will “mean cleaner air for downtown Indianapolis and provide significant savings for our customers compared to continued use of coal.” The conversion could be completed as early as 2014 and save the company $5 million in annual operating costs. The Perry K plant heats many downtown businesses and institutions, including Lucas Oil Stadium and the Indiana University-Purdue University Indianapolis campus.

3. Milwaukee Streetcar Support Swells. Supporters of a Milwaukee Streetcar project outnumbered its detractors by a 2-to-1 margin at a public hearing held Wednesday night on the planned streetcar line’s environmental impact. Supporters said the streetcar project will improve city transportation and stimulate economic development along the line. Opponents believe the cost is one the city cannot afford. City alderman have already voted to approve the project and move ahead with engineering, according to the Milwaukee Journal Sentinel, but have withheld final approval “until more details are fleshed out.”

FILED UNDER: Industry, Innovation, Jobs, clean energy, coal, energy, Indianapolis, Michigan, Milwaukee, transportation, unemployment
November 10, 2011 | 2:20 PM | By Pete Bigelow

Forbes: ‘We Should Be Glad’ Manufacturing Jobs Are Gone

A quarter-century ago, Bruce Springsteen wrote “My Hometown,” a melancholy song that captured the economic tensions caused by closures of a factory and textile mill in Freehold, New Jersey.

Ford's Rouge plant, by Charles Sheeler

It was written in 1985 at the outset of America’s industrial decline. In 1979, nearly 20 million people were employed in the manufacturing industry. Today, the manufacturing workforce employs 11.7 million, according to Forbes, a decline of 39 percent from its peak.

Springsteen wrote:

They’re closing down the textile mill across the railroad tracks
Foreman says these jobs are going boys and they ain’t coming back

And that’s OK, argues Forbes.

“The reality of the situation is this: We should be glad those jobs are gone,” writes David M. Ewalt on the magazine’s website. “We don’t need them.”

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FILED UNDER: Industry, Jobs, manufacturing, unemployment
November 4, 2011 | 12:08 PM | By Pete Bigelow

Midwest Memo: Oil Company Buys Detroit Zip Code, Unemployment Rate Declines, Small Growth Ahead For Indiana Economy

Three stories making news across the Midwest today:

1. Marathon Petroleum buys Detroit neighborhood. An oil refinery in Detroit wants to buy all the houses in the entire 48217 zip code as part of an expansion plan. Marathon is offering $50,000 per home to approximately 400 homeowners. The Atlantic writes the move is an unusual one, because the expansion actually won’t be located on the land. It’s more or less a goodwill transaction, in which “the company is essentially saying what few industries or companies will admit: I’m going to be a bad neighbor. I will make you sick.” Zip code 48217 represents one of the most heavily industrialized areas of Detroit.

2. Unemployment rate ever-so-slightly declines. The nation’s unemployment rate ticked down to 9 percent in October, the first time it has fallen since July, the U.S. Labor Department announced today. The nation’s economy added 80,000 jobs and the rate fell one-tenth of a percent from 9.1 percent. Our partner station WBEZ reports economists view the improvement as an encouraging sign, although a survey conducted by financial data provider FactSet showed they had expected a larger gain. The Labor Department also revised data from August and September, and said the economy added 102,000 more jobs in those two months than initially reported.

3. Small growth predicted for Indiana economy. Indiana’s economy is pointed in the right direction, but will not grow at a pace that fixes devastation wrought by the recession. That’s the consensus of a panel of Indiana University economists. They predicted Thursday that in 2012 the state will see a modest unemployment drop, a “slight” uptick in business output and a small gain in payroll, according to the Indianapolis Star. The five-person panel agreed that, like other states, Indiana will largely be at the mercy of national and global conditions. “Our economy is in trouble really, because of a generation of fiscal mismanagement,” associate professor Robert Neal,  a former economist at the Federal Reserve Bank, told the newspaper.

FILED UNDER: Communities, Industry, Jobs, Detroit, energy, Indiana, unemployment
November 2, 2011 | 1:49 PM | By Pete Bigelow

Michigan’s Economy Shows Mixed Signs Of Improvement And Struggles

Some contradictory news emerged on the Michigan economy today.

The state’s economy is recovering from the Great Recession at the second-fastest pace of any state in the country, according to a Bloomberg index that measures the pace of state growth. Only North Dakota outpaced Michigan, which was led by the resurgence of Detroit’s automakers and local manufacturing.

Seventy percent of Michigan employers said they expected the state’s economic outlook would improve over the next 18 months, according to Bloomberg Businessweek, which first reported the results. But the financial magazine also said the improvement reflects the severity of Michigan’s decline – it ranked last in the index through 2010.

Michigan still has formidable challenges ahead. Elsewhere, a report released today by outplacement firm Challenger, Gray & Christmas showed that it ranks as the fourth-highest state or district in number of layoffs to date in 2011. The report said that 29,312 Michigan employees have been laid off so far this year.

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FILED UNDER: Industry, Jobs, auto industry, employment, Michigan, unemployment
November 2, 2011 | 12:12 PM | By Pete Bigelow

Midwest Memo: Budget Cuts Concern Chicago Aldermen, Japanese Currency Adjustment Angers Michigan Contingent

Three stories making news across the Midwest today:

1. Chicago aldermen send Emanuel letter. Saying proposed Chicago budget cuts would hurt public safety and quality of life, a majority of the city’s 50 aldermen have called for Mayor Rahm Emanuel to alter his 2012 city budget. Our partner station WBEZ reports that 28 aldermen signed a letter that said the cuts would cause too many layoffs at city libraries, close too many mental health clinics and endanger public safety. Also, the letter stated they have “reservations” about the doubling of fees for city parking stickers for SUVs.

2. Projected layoffs drop across U.S. After planned layoffs across the U.S. hit a 28-month high in September, they dropped 63 percent to 42,759 in October, according to a new report. Government and financial sectors keyed the rebound, said outplacement consulting firm Challenger, Gray & Christmas. But “the two sectors are not out of the woods, by any means,” John Challenger, CEO, tells the Chicago Tribune. Employers have announced a total of 521,823 planned layoffs so far this year, a jump of 16 percent from 2010. The report comes in advance of Friday’s October jobs report from the federal government.

3. Michigan Senator Slams Currency Adjustment. U.S. Senator Debbie Stabenow of Michigan and a trade group that represents Detroit automakers criticized a decision by the Japanese government to lower the value of the yen. “Currency manipulation gives other countries an anti-competitive advantage and directly translates to lost American jobs, especially in Michigan,” Stabenow told the Detroit News. The automotive trade group that the move, the third this year, essentially subsidizes Japanese exports to the United States while weakening U.S. exports to Japan.

FILED UNDER: Government, Industry, Jobs, Chicago, Debbie Stabenow, employment, Japan, Michigan, Rahm Emanuel, unemployment
October 28, 2011 | 12:47 PM | By Pete Bigelow

Midwest Memo: Chrysler CEO Predicts End Of Two-Tier Wage Structure, Indianapolis Jobs Announcement May Be Hoax

Three stories making news across the Midwest today:

1. Will two tiers vanish from auto contracts? One contentions round of contract negotiations just ended, Chrysler CEO Sergio Marchionne is already making bold predictions about what’s ahead when the current four-year contract ends. He said today that the automakers’ two-tier pay structure is not a viable one, and Chrysler and the UAW must find a way to merge two classes of workers next time. The structure is, “not something that can go on for a long period of time,” he said on a conference call to discuss the company’s second-quarter earnings. Marchionne continued, saying, two-tiers is “not a viable structure on which to build our industrial footprint.” Last month, Changing Gears reporter Kate Davidson examined the two-tiered wage structure and reported on its impact upon automakers and their workers.

2. Is Indianapolis jobs pledge a hoax? Only two short days ago, Indiana Gov. Mitch Daniels and Indianapolis Mayor Greg Ballard welcomed a California entrepreneur whose company would bring 1,100 jobs to the city. Two days later, there’s growing worry the company, Litebox Inc., and its owner Bob Yanagihara aren’t for real. The Indianapolis Star reviewed public documents that show Yanagihara owes “hundreds of thousands of dollars in state and federal tax liens” from the past decade, as well as money to investors who have sued him – and won. “I would strongly advise anyone thinking of investing in his projects to think twice,” Colin McGrath, who is owed $145,000, tells the newspaper.

3. Whirlpool will lay off 5,000 workers. Appliance manufacturer Whirlpool said Friday that it would eliminate 5,000 jobs across North America and Europe. The Benton Harbor, Mich.-based company cut its earnings forecast. Whirlpool CEO Jeff Fettig said the cuts came amid weak demand and higher costs. The cuts include 1,200 salaried positions, and company officials said overall, the layoffs will save approximately $400 million. There was no immediate breakdown of how the cuts would affect Whirlpool’s Michigan workforce.

 

FILED UNDER: Industry, Jobs, auto industry, Chrysler, Indianapolis, Mitch Daniels, tax incentives, two tiers, unemployment, United Auto Workers, Whirlpool
October 24, 2011 | 10:56 AM | By Pete Bigelow

Midwest Memo: Ohio Unemployment Rate Steady, Chicago Food Deserts Dwindle, Wisconsin Owes $1 Billion To Government

Three stories making news across the Midwest today:

1. Chicago food deserts dwindle. Fewer Chicago residents are living in food deserts, according to a recently released report. In the past five years, the number of residents living in so-called food deserts – a low-income census tract where a substantial number of residents lack access to a grocery store – has dropped 40 percent. The study’s author, Mari Gallagher, tells partner station WBEZ that some “big name” stores have arrived in poorer communities, but that the remaining problem lies in African-American neighborhoods on the city’s south and west sides.

2. Ohio unemployment rate holds steady. Ohio’s unemployment rate remained unchanged at 9.1 percent in September, according to data released Friday by the Bureau of Labor Statistics. It marked the third consecutive month the Buckeye State’s unemployment rate was at or above the 9 percent mark. State officials found some promise in the numbers. “We’re in a recovery, we just think it’s going to take some time,” Angela Terez, spokesperson for the Ohio Department of Job and Family Services, tells our partner station Ideastream. “We’re seeing some good things like initial unemployment claims going down, and the number of layoffs going down.”

3. Wisconsin repaying $1.18 billion. The state of Wisconsin owes the federal government $1.18 billion borrowed to pay unemployment benefits, according to the Milwaukee Journal Sentinel. The state has made $42.4 million in interest payments to date in 2011, and is taking several steps to pay the money back, including enforcing a one-week waiting period for people seeing unemployment benefits. Among 27 states that owe the federal government money, Wisconsin ranks 11th. California takes dubious top honors, owing $8.63 billion, according to the newspaper.

FILED UNDER: Communities, Government, Jobs, Chicago, Food, Midwest economy, Ohio, unemployment
October 20, 2011 | 11:44 AM | By Pete Bigelow

Midwest Memo: Ohio Overlooks $1.1 Billion in Potential Tax Revenue, Chicago-Area Real Estate Data Tells Mixed Story

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.

FILED UNDER: Government, Jobs, Chicago, housing, Illinois, Michigan, Ohio, taxes, unemployment
October 7, 2011 | 12:39 PM | By Pete Bigelow

Midwest Memo: Unemployment Rate Unchanged, Michigan Business Owner Desires Better-Educated Workforce

Three stories making news across the Midwest today:

1. Unemployment rate unchanged. American’s unemployment rate remained unchanged at 9.1 percent in September even as the economy added 103,000 jobs, the U.S. Labor Department announced Friday. Among those struggling to find work, more than 1 in 4 respondents to a Rutgers University survey said they are opposed to a renewal of extended unemployment benefits. An extension proposal is part of President Obama’s jobs bill, according to The New York Times, which explored the sentiments of the unemployed. Theresa Gorski, a pharmaceutical rep from Detroit, tells the newspaper she once shared skepticism about prolonged benefits, but after 17 months of unemployment, her views have changed.

2. Software chief: Michigan needs more education. For Michigan companies, a strong education base is more important than lower taxes. That’s the opinion of Bill Wagner, co-founder of Ann Arbor, Mich.-based software firm SRT Solutions, who writes the dismantling of education throughout the state has painted a grim picture to prospective global employers in an AnnArbor.com op-ed published today. He believes budget cuts have harmed the state’s education infrastructure, and that savings from reduced business taxes, among other things, amount to less money than his company spent last year on a summer intern.

3. Sara Lee may move headquarters. The headquarters of Sara Lee has only been based in Downers Grove, Ill. for six years. Its’ already looking to move. Our partner station WBEZ reports the company is exploring a move within Illinois, possibly to downtown Chicago or another suburb. “We do believe that a downtown location would provide our new North American Meat Co. with an environment that will be energetic, that will foster breakthrough thinking,” a company spokesperson told WBEZ. Sara Lee currently employs 1,000 workers in Downers Grove.

 

 

FILED UNDER: Government, Industry, Jobs, Chicago, Education, Illinois, Michigan, Obama, tax incentives, taxes, unemployment
October 3, 2011 | 5:00 PM | By Pete Bigelow

Here’s Why The Midwest Has Tilted Against President Barack Obama

President Obama speaks at an assembly plant in Toledo in June, one of seven trips to Ohio during his presidency.

The Midwest carried President Barack Obama to the White House in 2008. But when it comes to his re-election prospects in 2012, there are signs the president may have a more arduous task across the region.

Thirteen months away from the next presidential election, the president’s approval ratings have sunk. In Michigan, 65 percent of likely voters disapprove of the job he’s done. In Wisconsin, 51 percent disapprove. In Ohio, his 42 percent approval rating is the lowest of his tenure thus far.

In Pennsylvania, 54 percent of voters disapprove of his job. And in Indiana, which went for a Democrat in 2008 for the first time since 1964, Obama’s disapproval rating has ratcheted up to 60 percent. In 2010, Republican governors were elected in Wisconsin, Michigan and Ohio.

Far from the hope of sweeping the region again, even safe Democratic strongholds now appear in play. His approval rating in Minnesota hovers just above 50 percent. Perhaps most ominously, voters in Obama’s home state of Illinois gave his former Senate seat to Republican Mark Kirk last year.

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FILED UNDER: Government, Politics, Midwest economy, Obama, unemployment