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December 16th, 2011
As you’re relaxing on Boxing Day, tune in to our partner station WBEZ Chicago for the Changing Gears special, “Getting By.” We’re talking to eight Illinoisans from all walks of life — a banker, a farmer, a hospice nurse, a returning veteran and others — about the way they dealt with the economy in 2011, and their hopes for 2012.
There are many statistics about the economy, like the unemployment and foreclosure rates, but we don’t often get to hear the human side.
Our conversation, recorded at my dining room table, covers everything from the mortgage crisis, to job hunting successes and failures, to the personal decisions our participants have had to made because times are tight.
WBEZ’s Steve Edwards and I are the co-hosts You can listen live at WBEZ’s Web site. “Getting Live” airs at noon Central Time on Monday, Dec. 26.
Conventional wisdom is that the U.S.-born children of immigrants should fare better than their parents, with better education and higher paying jobs. But a new study from the Latino Policy Forum shows that’s not the case in Chicago – especially among Mexican-Americans, who are still stuck in the same low-wage jobs as their foreign-born parents.
With the sheer size of the Latino workforce – three out of five new entrants into the workforce over the past decade – that has implications for Chicago’s entire economy, said Latino Policy Forum Director Sylvia Puente, who added Chicago needs to act now to ensure that the metropolitan area’s future workforce remains economically vibrant.
“The question we’re asking is, is there a Latino blue collar ceiling in Chicago because we’re seeing limited economic mobility, between native-born workers and immigrant workers of Mexican origin – the majority are in sales, manufacturing and construction,” Puente said.
The research is based mostly on American Community Survey data which is collected by the federal government yearly. The report was done by the University of California, Berkeley professor Bruce Fuller at Berkeley’s Institute for Human Development.
A very small number of U.S.-born Latinos are in what’s commonly referred to as STEM – science, technology, engineering or math – careers, or business, Puente added.
Check out these charts below to see the types of industries we’re talking about:
All of this also translates to much lower average wages. One headline from that chart, just below: The typical white male in Chicago earns $10 an hour – compared to $7 an hour for a Mexican-American male – also born in Chicago.
How does this gap get closed? Puente says she thinks education is the key. But while those numbers have improved, they’re also rather grim: Chicago’s Latino high school graduation rate, at 59 percent, is the highest it has ever been – but compare that to a 64 percent rate for white Chicagoans and 80 percent for Asians. National numbers show that while 1 in 3 Latinos begins college, completion rates are not as high.
“It’s a paradox,” Puente said. “We’re seeing gains, but they’re not fast enough, and they’re not quick enough and the gap isn’t closing to the degree that we would like.”
It’s an obvious question to wonder why this generation of immigrants is not following the traditional path that we tend to think happens with American immigrants: the foreign-born parents working in more low-skilled, low-wage jobs, but then their U.S. born and educated children doing better. This isn’t necessarily a question of undocumented immigrants – 70 percent of Latinos in the United States are here legally, Puente said.
Puente thinks its because Mexican-Americans are coming into a labor market structure that is significantly different than it was previously.
“My parents’ generation gave me a middle class life working factory jobs – they were good-paying jobs, with benefits, vacation and retirement,” Puente said. “The manufacturing industry has really revamped itself. There aren’t as many of those jobs, and there certainly are fewer of those jobs paying a middle-class wage and having the benefits they used to have.”
December 15th, 2011
Yesterday, we told you that Michigan’s unemployment rate dropped below 10 percent in November for the first time in three years. Now comes word that Illinois’ jobless rate also dropped last month, and the state added jobs in November, although not as many as it has been adding.
Illinois’ unemployment rate was 10 percent, down from 10.1 percent in October. The state, which has been adding an average of 6,000 jobs a month this year, added only 600 jobs in November.
Although Illinois officials said the state has added jobs in eight of the past 11 months, the state’s unemployment rate is actually up from 9.4 percent in November a year ago.
The national unemployment rate is 8.6 percent.
On Wednesday, Michigan officials said their state’s jobless rate was 9.8 percent last month, according to the state Department of Technology, Management and Budget. A year ago, the Michigan jobless rate was 11.4 percent.
December 14th, 2011
Michigan has at times had the highest unemployment rate in the nation, peaking above 14 percent in 2009. But today, state officials said the November rate dropped below 10 percent for the first time in three years, although the decline is primarily due to fewer people seeking jobs.
The jobless rate was 9.8 percent last month, according to the state Department of Technology, Management and Budget. A year ago, the jobless rate was 11.4 percent.
Michigan’s unemployment rate compares with a national rate of 8.6 percent, but state officials say the unemployment rate in Michigan has dropped by a full percentage point since this past August.
It was the lowest rate for Michigan since October, 2008, when the rate stood at 9.4 percent. The following month, the state unemployment rate rose above 10 percent, and has been in double digits ever since.
But as with the national situation, fewer people in Michigan are seeking full-time employment. State officials said the labor force dropped by 88,000 workers in November, the eighth straight month in which the number of people employed had dropped.
Ten years ago, Michigan’s workforce (including those employed and unemployed) stood at nearly 5.2 million people, and the unemployment rate was 4.6 percent. Last month, the state’s total workforce stood at 4.6 million, with 9.8 percent out of work.
However, Michigan officials said recent job growth has taken place in business services, manufacturing and health care.
Detroit’s unemployment rate fell to to 11.2 percent, the lowest for the area since March. State officials said the workforce declined by 11,000 workers between October and November. In the past year, 37,000 people have left the workforce.
December 14th, 2011
Detroit Rail Plan Dies: An ambitious plan to build a light rail corridor in Detroit has died, the Detroit Free Press reports. Instead, the federal government is recommending that the city get high speed buses, which will run on dedicated routes from the suburbs to the city. The Transportation Department had awarded the city $25 million last year to get light rail rolling. But financial issues with the project, and the city’s own financial woes caused the government to change course, the paper said. The death of the plan ends a four-year lobbying effort to win a light rail system.
Chicago Companies Plan to Hire: About 15 percent of companies in the Chicago area expect to hire more employees in early 2012, and about two-thirds of companies expect to keep staffing levels the same, according to a survey by Manpower. A small number, about 12 percent, said they planned to eliminate positions in the first quarter. Job prospects appear best in manufacturing of non-durable goods, the wholesale and retail sector, financial activities, education and health care. Employers in construction, transportation and utilities expect to cut jobs.
Texting Ban Boost: The author of a legislative proposal to ban texting-while-driving in Ohio tells our partner station ideastream that her bill is getting a big boost from a recommendation by the National Transportation Safety Board. The five member board has unanimously called for all states to ban not only texting-while-driving, but also talking on cellphones while driving, even when motorists use a hands-free device. State Rep. Nancy Garland’s proposed texting ban has passed the Ohio House of Representatives, but has hit a roadblock in a Senate committee
December 14th, 2011
The incentives war between the Midwestern states has heated up over the past few months, especially between Illinois, Indiana and Ohio, which, are fighting over Sears and the CME Group. Here is a look at how states use incentives to keep or steal companies, and how that effects overall economic development.
Remember the ending? (No? Keep reading.) The movie’s star, Matthew Broderick, wants to show Joshua, the computer, that there’s no way to win a zero-sum game. He gets the computer to play itself, first Tic Tac Toe, then a simulation of a nuclear war between the then-Soviet Union and the United States. In the end, Joshua realizes no one can win.
Keep game theory in mind, because we’ll come back to it later. But that’s kind of what’s happening between Illinois, Ohio and Indiana. These states have spent the past few months waging an economic incentives war worth millions of dollars and thousands of jobs.
The most recent round ended yesterday, when the Illinois Senate approved more than $200 million in tax breaks – specifically designed to keep Sears and the Chicago Mercantile Exchange from leaving Illinois.
The CME Group owns the Chicago Board of Trade, the Chicago Mercantile Exchange, as well as the Chicago Board Options Exchange.
Last week, at a news conference with Gov. Pat Quinn and Senate President John Cullerton, Chicago Mayor Rahm Emanuel echoed their sentiments that much is at stake.
“Chicago Mercantile Exchange allows Chicago and the state of Illinois to be a leader in the futures and risk management industry,” said Emanuel.
Indiana offered CME a reported $100 million to leave Illinois. Ohio offered four times as much to try to lure Sears.
But it doesn’t just happen with big companies. Indiana’s Economic Development Corporation earlier this year spent $50,000 on ads asking lllinois businesses if they were “Illinoyed” by the state’s taxes.
States find themselves over a barrel when officials feel the need to offer millions to lure and retain companies.
That’s a mistake, said Jennifer Bradley, a fellow with The Brookings Institution’s Metropolitan Policy Program.
Bradley said that in the case of incentives, governors and public officials face a classic “prisoner’s dilemma”.
“Governors would probably all be better off, or state economic development authorities would probably all be better off, if nobody got into these kinds of bidding wars,” she said.
In Illinois, the current tax package for Sears was set to expire. The legislation has extended those credits for 10 years for one set of credits, as well as 15 years for a special taxing district in regards to property taxes.
But Bradley says the effort to win jobs from other states may be misguided. She says most research indicates that 95 percent of a state’s typical job growth comes from existing or new businesses.
And here we’re back to the prisoner’s dilemma: with the current game of incentives, though, no one wants to budge.
“If you can’t count on everybody to do the right thing, then nobody’s going to do the right thing,” she said. “So companies have incentives to ask and individual states have incentives, temporarily, to make the offer.”
But some states are playing differently. Michigan is trying something that might break the Midwest out of this prisoner’s dilemma. In his first State of the State speech in January, Gov. Rick Syner rejected the “up the ante” mindset.
“We need to put more emphasis on economic gardening as opposed to hunting,” he said to much applause. “For those unfamiliar with economic gardening, it means we’ll focus first and foremost on building businesses that are already in the state.”
Since that address, Michigan has eliminated almost all of its tax credit incentives – including its much publicized film incentives.
“We’re really trying to provide key access to tools that will help a business’s customer base grow as opposed to just providing them money and hoping that they will be able to grow their business,” said Michael Finney, president of the Michigan Economic Development Corp.
For Finney, that means the focus is more on providing help with accessing export markets, debt financing, and the like. He hopes this approach will also make it easier for the Midwest to work together.
“I happen to think if we worked together as a Midwestern region we’d be much more successful,” he said.
It’s not unprecedented for states within a region to cooperate. Take the South.
“Our former director used the term ‘coop-er-tition’,” said Kathy Geltson, Deputy Director of the Mississippi Development Authority. “We cooperate in instances where it makes sense, but there are instances when it’s a true competition.”
She’s talking about several specific alliances Mississippi and several southern states have formed for industries like the automotive or aerospace center. There, the states work together to bring companies to the region, and don’t try to compete, at least in this case, with incentives.
For Michigan, cutting those hundreds of millions of dollars out was a necessity given its fiscal state. But it works – if Michigan can show that this new strategy will still lead to comparable job growth –maybe other Midwestern states will start to follow suit.
What do you think about incentives? Should it be every state for itself? Or would the region be better served following other models?
And because I can’t resist, in case you’re nostaglic: that final scene from War Games:
December 12th, 2011
Casino Jobs in Cleveland: Want to work at the new Horseshoe Casino? They’re hiring again, according to the Cleveland Plain Dealer. The casino, located on four floors of the old Higbee Department store, will be filling 40 different kinds of jobs, with 750 new positions open. The work ranges from security officers and slot machine supervisors to chefs. It’s the second wave of hiring for the Horseshoe, which hired its first 650 people in September. The casino hopes to open in late March.
High Speed Rail: Consultants have until today to submit their proposals to study how to solve a crucial problem for high speed rail between Detroit and Chicago, reports our partner station Michigan Radio. At issue is a railroad bottleneck between northwest Indiana and Chicago. A high volume of passenger and freight traffic already overwhelms the existing rail lines and threatens to put the brakes on high speed trains. Once a winning consultant is chosen, it will probably take about two years to lay out a solution.
Debtors to Jail: With a slow economy, the number of debtors going to jail in Illinois is on the rise, reports our partner station WBEZ. It’s illegal in Illinois to throw a debtor in jail for not being able to pay, but some creditors are getting around that. A collection agency can file a lawsuit which might require a court appearance. If the debtor doesn’t appear at the hearing, a warrant can be issued for their arrest. Legal aid attorneys have said this is more of an issue in rural parts of the state.
Micki Maynard · Last Chance for Midwest Money Advice: Send Your Questions for Ali Velshi & Christine Romans
December 12th, 2011
Retirement, debt, going back to school, and mortgages are all issues that are magnified by the recession. Where can you get Midwest Money advice?
Here. But you’d better hurry up. Through the end of today, CNN anchors and authors Ali Velshi and Christine Romans are taking Midwest Money questions from the Changing Gears audience.
We’ll be posting their answers next week. If Ali and Christine select your question, you’ll win a copy of their new book, “How To Speak Money.”
Send your questions by the end of today for Ali and Christine, then come back for the answers all next week.
Micki Maynard · Mortgages, Job Search, Debt, Retirement — Advice (And A Chance to Win a Book) from Ali Velshi and Christine Romans
December 9th, 2011
Nobody has had an easy time getting through the recession. It’s made personal finance planning a nightmare — whether it’s paying for school, looking for a new job, figuring out retirement, or getting rid of credit cards. But Changing Gears is offering you the chance to get some advice.
Network anchors and authors Ali Velshi and Christine Romans are taking Midwest Money questions from the Changing Gears audience.
We’ll be posting their answers during the week of Dec. 19. And if they pick your question, you’ll win a copy of their new book, “How To Speak Money.”
Submit your Midwest Money questions by Monday Dec. 12.
Micki Maynard · Should I Borrow Money To Go Back To School? Ask Personal Finance Experts Velshi and Romans
December 6th, 2011
People all over our region are deciding whether they should go back to school to learn new skills, and possibly begin a new career. But for some, there’s a big obstacle: how to pay for it. Should you use your savings — or borrow money? What’s the best place for returning students to find scholarships?
Authors Ali Velshi and Christine Romans want to help. All this week, they’re taking Midwest Money questions from our Changing Gears audience.
We’ll be posting their answers during the week of Dec. 19. If Ali and Christine pick your question, you’ll win a copy of their new book, How to Speak Money.
Click here and ask your Midwest Money questions about financing your education, or any other topic.