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July 20th, 2011
House lock has prevented some homeowners from moving for better jobs, but the problem isn’t affecting the nation’s overall unemployment rate in a substantial way.
That’s the conclusion of a study authored by the Federal Reserve Bank of Chicago, which found scant evidence of a link between geographic immobility and a national unemployment rate that reached 9.2 percent in June. The study was released Wednesday.
Using census data, the economists compared state-to-state migration rates among both homeowners and renters and found neither group had veered from historical recession rates. “We find that homeowner and renter migration rates fell roughly in tandem,” Fed vice president and advisor Daniel Aaronson wrote. “The difference is economically small.”
Some observers had believed that house lock, the economic malady in which homeowners are reluctant or unable to sell their homes because of diminished values, had kept some workers from relocating for new jobs and contributed to the unemployment rate.
But Aaronson wrote that differences in movement were nearly identical across markets in a variety of economic conditions. In the data unearthed in the Survey of Income and Program Participation, markets battered by the recession showed the same migration patterns as those that faced less tumult.
“There is little empirical evidence that house lock has been an important driver of the recent high unemployment rate,” he said.
Job growth is sluggish. The unemployment rate remains high. Far too many people still can’t sell their homes. What is there to be done?
It’s one of the biggest stories in the news, it’s incredibly important to the Midwest, and there’s no agreement on an answer.
So we’re turning to you for some ideas. What do you think would get the economy moving again? Take our poll.
Want to add some more thoughts about getting the economy moving? Click here and share them with Changing Gears. We may feature you in an upcoming story.
The clean economy is touted as a future economic driver of the region. But a new report shows that while Ohio and Illinois have added jobs to the clean economy, Michigan is the only state to have lost them. Changing Gears visited one scientist in Plymouth, Mich., who’s trying to nudge that number back up.
Geoff Horst has a scientist’s air of geeky restraint. But when a little box arrived at his lab the other day he got excited. Inside were vials filled with stinky sludge: wastewater from a landfill in Ohio.
“It literally looks black — like black as Guinness beer,” Horst said. “And so we like to tell people that we take it from Guinness to Miller Lite color.”
Horst is chief science officer of a start-up developing a new way to treat high-strength wastewater. That’s the really concentrated stuff that drains from breweries, ethanol plants, dairies and even meat-rendering plants. Traditionally, treatment plants have used bacteria to gobble up the organic material in that wastewater.
“When we say bacteria, there could be literally thousands of different species of bacteria that do this job,” Horst said.
Some break down sugars, others fats or proteins. But bacteria don’t do as well with nutrients like nitrogen and phosphorous. These are the kinds of nutrients that feed huge algal blooms in Lake Erie and the Gulf of Mexico.
“The way we were thinking of it is, well, if algae can grow really well out in nature on these nutrients,” Horst said, “maybe we can control them, and do it in a controlled environment and actually put them to work.”
So Algal Scientific was born. The idea is to treat wastewater with algae that can efficiently do both jobs: break down organic material and tackle extra nutrients. Horst thinks food processors and other facilities that use the system to treat wastewater onsite could pay millions less in fees to large treatment plants.
In general, if you want to hitch your horse to the so-called “clean economy,” waste management is a good place to start. It’s the number one job creator in the sector, according to a new report from The Brookings Institution. Jonathan Rothwell is one of the authors who studied the growth of clean economy jobs from 2003 to 2010. The sector covers a wide swath, from alternative energy to public transportation.
The report found most clean jobs and growth concentrated in large metro areas. Chicago had the third highest number of clean jobs in the nation. Toledo ranked high in the share of its jobs that belong to the clean economy.
But Midwest boosters want the region to capitalize on another finding: More than a quarter of clean economy jobs involve manufacturing, which is much higher than the national average. Jonathan Rothwell says the green economy is largely blue collar.
“The industrial Midwest happens to have a lot of these workers and a lot of them are unemployed currently,” Rothwell said, “but they do have a set of skills developed from on the job training.”
Excess manufacturing capacity is just one of the reasons Horst wants Algal Scientific to grow in Michigan.
“We’re in the epicenter of where … some of the world’s largest resources of fresh water are located,” he said. “And if we can help preserve that natural environment, you know, I’d like my kids to be able to grow up in a pristine environment, and so that’s what I’m trying to do here.”
The start-up hopes to add 20 jobs to Michigan’s clean economy in the next three years. But first they’ll have to raise hundreds of thousands, perhaps millions of dollars, to survive the so-called “valley of death.” That’s the failure-laden terrain between an innovative demo and full-scale commercialization.
Instead of seeking a last-minute buyer, Borders Group has abandoned its search for a suitor and will ask a judge to approve a sale to liquidators.
The process could begin as early as Friday and conclude in September. On Sunday, a significant deadline passed in the bookseller’s efforts to find a buyer without success.
In a written release, Borders Group president Mike Edwards expressed sadness of the pending sale to Hilco and Gordon Brothers.
“We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now,” he said.
Borders employs approximately 400 workers at its Ann Arbor, Mich. headquarters and more than 11,000 overall.
Three stories making news across the Midwest today:
1. Ohio exec develops “anti-poaching” policy. Concerned about the number of communities luring businesses away from other Cleveland-area locations, Cuyahoga County Executive Ed FitzGerald has created a non-compete policy he believes will stimulate overall regional harmony, and possibly growth. Under his “Fourth Frontier” program, local governments under his jurisdiction would be eligible for part of $100 million in development funds, so long as they agree not to provide incentives to lure companies away from other participating cities.
2. Summer outlook: Job openings flat. The number of job openings posted across the nation in May stayed stagnant, an indication hiring is unlikely to trend upward this summer, the Associated Press reported today. The Labor Department said that employers advertised approximately 3 million openings, the same total as April. The department said 4.7 unemployed people competed for each available job in May. The AP writes, “In a healthy economy, the ratio is about 2 to 1.”
3. Details emerge on Detroit help. As many as 12 federal officials will relocate to Detroit as part of the Obama administration’s Strong Cities, Strong Communities pilot program announced Monday. The Detroit Free Press reports the employees will come from HUD, Transportation, Labor and Commerce Departments, among others. They’ll help the city spend millions of federal dollars by seeking efficiencies and cutting through red tape. The pilot program includes five other U.S. cities, including Cleveland.
The most recent study of local Internet use in Chicago found that more than a quarter of people in Chicago didn’t use the Internet. Another 15 percent had limited access, according to the 2008 study. Now, the University of Illinois at Chicago is working with Rutgers University to see how especially Chicago’s South side is faring.
I reported on the digital divide and how it relates to job hunting last January. The story focused on the Smart Communities initiative, a federally funded program in Chicago’s South side neighborhood of Auburn-Gresham which has digital literacy classes.
In the story, UIC professor professor Karen Mossberger told me that it was just a fact that these days, that even the most basic work requires a level of web savvy that wasn’t the case even a few years ago.
“It’s becoming more integrated not just into high tech jobs but into all kinds of old economy jobs,” she said back then. “Even fast food restaurants, offices, manufacturing, trucking and delivery – there are going to be some aspects of technology involved and that’s going to become even more true in the future.”
Mossberger is one of the professors conducting the survey, which will be conducted with more than 3,000 households beginning this week.
We’ll report back on the results when we have it. In the meantime, here’s my story from January:
Three stories making news across the Midwest today:
1. Unemployment rate edges up in June. A monthly report from the U.S. Labor Department showed the nation’s economy added just 18,000 jobs in June and the unemployment rate rose a tenth of a point to 9.2 percent. Economists were disappointed with the report, and suggested higher energy prices, weak consumer confidence and other problems were to blame. “Unless hiring picks up, there is a reason to be concerned about whether we can grow at 2.5 percent for the rest of this year,” economist John Canally told The New York Times.
2. Detroit home prices sharply decline. Weighed down by a large stock of inventory, home prices in Detroit fell 19.8 percent during the first half of 2011 compared to the same period one year earlier, according to our partner station Michigan Radio. Alex Villacorta of Clear Capital says home prices are expected to dip another 4 percent by the end of 2011.
3. A steel mill’s second act. Bored this weekend and looking for something unusual to do? The Dave Matthews Band Caravan kicks off a three-day concert tonight in Chicago on the 600-acre former site of a giant steel mill once operated as U.S. Steel’s South Works facility on the mouth of the Calumet River. Once a brownfield site, our partner station WBEZ reports that more than 200,000 concertgoers are expected this weekend. Next year, the site is slated for redevelopment.
July 6th, 2011
Green energy is often said to be the future of the Midwest economy. But old fashioned fossil fuels could be having a bigger effect on the region’s jobs and corporate bottom lines.
This is not conventional oil, though. It’s a thick, tar-like crude from the oil sands in Alberta, Canada. It’s sent here by pipelines, many which cross our rivers and the Great Lakes, and that has some worrying about a bigger risk to the region.
You don’t have to tell Detroiters like Jeff Collins that jobs are hard to come by in that city. “I have been unemployed really since October ’07,” he says.
He’s a construction worker, one of the worst-hit industries in perhaps the worst-hit city.
On a recent Friday morning, Collins and about 50 other Detroit electrical workers are milling about the basement of their union hall. They wait for their names to be called and hope to land something.
There are eight openings this day at Detroit’s expanding Marathon oil refinery. The list of guys hoping for work there is 1700 long.
“Well I’m too far back on the book, I probably won’t get that,” Collins says. He says he’s so far back, he’s just there for male bonding.
A few miles away, that Marathon refinery is a hulking complex of pipes and towers and concrete. And, it’s one of the biggest construction projects in Michigan.
Marathon Oil is spending $2.2 billion to expand and upgrade this refinery so it can process more of the sulfur-rich, tar-like crude that comes in by pipeline from the Canadian oil sands. About 1,300 construction workers will be on the job there by fall.
The oil industry says this is just one example of the Canadian oil sands creating jobs here, something it’s been promoting heavily in advertisements. One ad says the Canadian oil sands and the supporting infrastructure in the U.S. “could create more than 342,000 American jobs in the next four years.”
Peter Howard of the Canadian Energy Research Institute helped the industry come up with those numbers. He projects the oil sands to create 23,000 jobs a year in Illinois, 8000 in Michigan, and 11,000 in Ohio.
Howard’s numbers include everything from companies like Caterpillar that make the gargantuan trucks used in the oil sands, to food companies that feed the workers. And, there are all the refineries being converted to process the stuff. BP’s Toledo plant is supposed to start an upgrade soon. And, BP’s expanding Whiting, Indiana refinery near Chicago is already employing hundreds of construction workers.
After the expansions are done, it’s not exactly the bonanza promised in those ads. The oil companies say each refinery will create fewer than 100 new full time jobs.
The oil comes to the refineries by pipeline. Many are owned by a Canadian company called Enbridge.
Penny Miller had never heard of that company or its pipelines until last year. One day, she came home from a lunch and saw a sheen on the creek by her home. “The next thing I knew is the Enbridge people came up and said they’re trying to hunt this down,” Miller says. “Then, by the time I came home from work that night, it was really thick and really bad.”
A year ago this month, more than 800,000 gallons of heavy Canadian crude spilled from an Enbridge pipeline by her house near the Kalamazoo River.
The day after the spill, Penny Miller’s dog died from the fumes. Nearby, workers are still cleaning up that spill.
In one creek, they use rototillers to stir up the oil and bring it to the surface.
That’s because this crude from the oil sands is not like other crude.
For one thing, it sinks. That’s a reason this cleanup has already cost more than half a billion dollars, and it’s still going.
“A year ago, there was heavy oil here from bank to bank,” says Ralph Dollhopf of the Environmental Protection Agency, as we go on an airboat ride to survey the Kalamazoo River today.
It’s a lot cleaner, but there’s more work to do before kayakers and others who use the river can return.
We get to two airboats parked near the edge of the river. Dollhopf asks the workers how it’s going as they stick long poles called “stingers” into the water.
A look at the oil spill and the cleanup nearly a year after the Kalamazoo River spill:
“The idea is to bring the submerged oil up to the top where they can recover it,” Dollhopf explains.
Not only did the oil sink, but the EPA says this oil sands crude posed health risks unlike more conventional oil.
Benzene and other volatile organics were released into the air. Even today, air quality monitors are out at each cleanup site.
Josh Mogerman of the Natural Resources Defense Council says the oil sands are partly to blame for this spill. He says this heavy crude is full of acids and sulfur. And, it travels at a higher temperature and pressure than the conventional crude that used to be the mainstay of these aging pipes. That makes cracks and spills more likely.
“You’re basically sandblasting the pipelines from inside the pipe,” Mogerman says.
The industry contends there is no significant difference between regular and oil sands crude.
Peter Howard of the Canadian Energy Research Institute says pipeline companies go out of their way to minimize the risk of spills.
“When you think about the number of barrels of crude that’s shipped around the United States on a daily basis versus the number of spills in the last ten years, it’s just a finite number,” Howard says.
Enbridge, though, has had at least five other spills in the US in the last decade, according to Reuters. During that time, the amount of crude from the oil sands being piped from Canada has increased dramatically.
Mogerman of the NRDC says that’s putting this region’s rivers and lakes at risk. He points to areas around Lake Superior, the southern end of Lake Michigan, Lake Huron, and Lake Erie as vulnerabilities.
“Additionally, you have issues where the pipelines actually run underneath Lake St Clair or the St Clair River in Southeast Michigan, and awfully close to the Indiana Dunes National Lakeshore,” he says.
But that’s not front of mind at the union hall back in Detroit.
Ken Wesley walks out of the office with a job slip in his hand. He had been traveling the country for work. Now, he can work in Detroit, his home.
“Going to have a good summer,” he says, smiling. “Family and kids: haven’t seen them in about eight months.”
And, with the Midwest eager to put guys like Ken Wesley back to work, it’s easy see why cities embrace pipelines and refinery expansions, even if the oil sands crude could be putting our waterways and lakes in peril.
Produced with WBEZ’s Front and Center project.
For blue collar workers, the recession has been more like a depression. (I reported on these sobering numbers last year.) That’s why so many construction workers welcome all the jobs oil refinery expansions are creating in the Midwest. The boon in the Canadian oil sands is creating jobs here. And, while my story this week spends a lot of time talking about the potential environmental and health risks of this industry, there is no doubt how much having work means to these construction workers. After the jump, some of the voices and images from a job call at an electrical union hall in Detroit.
July 1st, 2011
Three stories making news across the Midwest today:
1. Ohio leads nation in unemployment drop. Has the Buckeye State bounced back? Ohio saw a decline of 2,800 people making first-time unemployment claims last week, the steepest drop in the country, our partner station Ideastream reported. Officials attributed the decline to a rise in auto manufacturers going back to work.
2. Small cars lead to bigger gains. GM reports sales rose 10 percent in June, buoyed by a rise in customers looking for fuel-efficient cars. The new Chevrolet Cruze compact led overall sales of 215,000 vehicles, reports our partner Michigan Radio. An earthquake-related shortage of Japanese cars helped GM.
3. New dean takes over at Michigan’s business school. Alison Davis-Blake began her tenure as the dean of the Ross School of Business at the University of Michigan on Friday. Previously, she had served as dean at the University of Minnesota’s Carlson School of Management. In an introductory post on her new blog, she writes, “leadership, creativity and innovation are at a premium as business plays an increasingly significant role in addressing the globe’s most pressing social and economic issues.”