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March 30th, 2012
This morning, the White House Council on Environmental Quality announced that it’s reached an agreement that will speed up the permitting process for offshore wind energy in the Great Lakes. The agreement comes in the form of a memorandum of understanding with five of the eight states that border the Great Lakes.
On a conference call this morning, officials said the total potential for wind energy in the Great Lakes is about equal to building 700 nuclear power plants. They said wind on the Great Lakes could power millions of homes.
The MOU includes nine federal agencies, and the states of Minnesota, Illinois, Michigan, New York and Pennsylvania. Not included are Indiana, Ohio and Wisconsin, though they can sign on later.
But what’s actually in the memorandum of understanding? Very little, but what’s there could still make a difference.
The entire agreement is 12 pages long. It spells out each agency that has a say in regulating offshore wind projects. All the MOU really requires is that these agencies make a reasonable attempt to work together with the states.
The MOU is just as clear about what it doesn’t do, for example, from the agreement:
Nothing in this MOU may be construed to obligate the Participants to any current or
future expenditure of resources.
The MOU also doesn’t create any new agencies or laws:
This MOU is intended only to enhance and strengthen the working relationships of the Participants in connection to offshore wind energy proposals in the Great Lakes region and is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States or any State, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Nonetheless, the MOU does include certain requirements of the participants, “including attendance at periodic meetings,” though this is only “to the extent resources allow.” So, basically, you don’t really have to show up at the meetings if you’re short on staff, or your travel budget is tight.
The one concrete, and possibly very useful provision of the agreement, is that the agencies and states agree to create a regulatory roadmap.
… a document that describes the regulatory review process and identifies current and anticipated data needed to inform efficient review of proposed offshore wind energy facilities in the Great Lakes.
The roadmap must be completed and published 15 months from now. It might not sound like a lot. But the truth is, offshore wind is incredibly confusing from a regulatory standpoint. Nine federal agencies have jurisdiction, plus each state has its own agencies, and in many areas there are tribal jurisdictions.
Regulatory uncertainty is one of the things that’s held offshore wind back in the Great Lakes. The other, of course, is that many flat out oppose wind farms on the Lakes. Public opposition has already halted at least two proposals for offshore wind energy in the Great Lakes – one in New York and another in Michigan.
On this morning’s conference call, Deputy Energy Secretary Daniel Poneman said the new agreement won’t settle any of the public disagreements over offshore windfarms.
“This is not a comment on any particular project or on the substance of what any groups may think, for or against,” Poneman said. “It is indifferent as to what the specific groups are proposing or opposing.”
Poneman said the intent instead is to speed up the regulatory process, and get governments out of the way. How much the MOU will speed things up, he couldn’t say, since the federal government has yet to officially approve any wind turbines for any of the Lakes.
But the hope is, that when and if offshore wind power does come to the Great Lakes, governments won’t be the ones holding it back.
March 29th, 2012
in the case of unemployment rates in the Great Lakes states, headlines do not tell the full story.
This week, we heard that Michigan’s unemployment rate dropped to 8.8 percent, within shouting distance of the national unemployment rate, and way down from the 14 percent territory it reached during the worst of the recession.
Meanwhile, Wisconsin’s rate held steady at 6.9 percent for the second straight month, and it’s down from 9.2 percent in June 2009.
But behind the Michigan numbers lies a paradox: the state has 409,000 people out of work, but there are 76,000 job openings that can’t be filled. Gov. Rick Snyder talked about this on Wednesday at a town hall in Detroit, urging job seekers to register with the state’s talent bank.
And in Wisconsin, the unemployment rate actually rose in 27 cities whose population was more than 25,000, and in 66 counties.
The highest unemployment rate in Wisconsin is in Beloit, where 12.5 percent of working adults did not have jobs. Unemployment also is high in Door County, a vacation region, where 13.8 percent are out of work.
So, unemployment continues to be an issue in our region. Changing Gears has been looking at retraining and how to measure its success.
Have you gone through a retraining program, or gone back to school so that you can start a new career? Was it what you needed? Take our survey and help us cover the story.
Dustin Dwyer · Watch Live: Chicago Mayor Rahm Emanuel Announces $7 Billion Plan To Improve City’s Infrastructure
March 29th, 2012
Big news out of Chicago this morning: mayor Rahm Emanuel is announcing a three-year, $7 billion plan to rebuild the city’s infrastructure. The Mayor’s office says the plan will create 30,000 jobs, and it won’t require a tax hike.
The mayor will deliver a speech to announce the plan coming up at 11 a.m. Central time. You can watch the speech live right here.
Over the past few years, Toyota’s world was Total Recall — not the movie, but the struggles it faced over defects. But this year, Toyota is back to its old self, adding jobs and making investments.
It’s already spending $400 million to hire 400 more people in Princeton, Ind., and it’s brought its Blue Springs, Miss., plant up to full staff. Now, Toyota is expanding again, at its newest Canadian plant in Woodstock, Ontario.
Toyota said today it’s investing $80 million (Canadian) and hiring 400 more people as it increases production of the small RAV4 sport utility. The company will go from building 150,000 RAVs a year to 200,000 annually.
Toyota has operations all over the Midwest, including its big design and research center in Ann Arbor, Mich., its headquarters outside Cincinnati and many suppliers scattered everywhere. So, any step Toyota takes is important to our region.
Here’s a look at some of the strategic thinking behind what Toyota is doing.
March 28th, 2012
Sarah Alvarez contributed to this story.
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.
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.
According to Whitmore, they didn’t have many other options. “At that point, what are you going to do? Do you want to continue to have a job and do something a little different or do we need to work toward shutting it down?”
That transition wasn’t easy. It took about two years for EMR Approved to get on track, and those years were filled with a lot of uncertainty.
Penny Smith had been working for Whitmore since 2002, and she decided to stay when Whitmore turned her old IT company into the new IT company it is today.
“Was I taking a risk? Yeah, but I knew it was somewhat calculated as well,” says Smith.
Now Smith works in business development at EMR Approved, but she had to go through six months of training and certification to get there. Training like that is a lot of work, and it’s not cheap. Whitmore spent more than $100,000 to retrain her 12 employees.
But she accomplished something that a lot of people are trying to do: Break in to growing industries, like health care, by learning new things, like how to work with electronic medical records.
In 2009, the US government spent $18 billion on retraining programs. That money is distributed by state agencies.
They are trying to do the same thing that Whitmore did, which is basically like trying to predict the future.
Retraining takes time, and those agencies want to make sure that there are jobs waiting at the other end of those programs, six months or even a year from now.
Whitmore explains that there is an element of guesswork involved, “But we do know that the baby boomer generation is aging, and we do know that health care is getting a lot of attention,” she says. “We’ve got to stick our pin in the map somewhere.”
Jeff Smith is an economist at the University of Michigan. He says it’s a lot harder for government agencies to make strategic decisions like that on a big scale. That’s because it’s not easy to make predictions.
It comes down to this: How can you use information about labor market demand to plan a retraining strategy?
Smith says, “It’s a hard task, I think harder than you might think at first blush to try to figure out what there is actually demand for, in some sort of quantitative way, and then apply that information to your training program or community college course offerings.”
So to help figure out where that demand is, Michigan is trying something new, a business driven model. That model is being used by Michigan Works, the state agency that hands out federal funding for retraining programs.
Tyne Lucas is the Career Transition Coordinator at the Michigan Works drop-in center in Washtenaw County.
“Our new customer is the business,” says Lucas, “and that doesn’t change what we do for job seekers, because if we’re making sure that we’re providing the businesses and the employers what they’re looking for, we’re doing a good job for the job seekers as well.”
Michigan Works is trying to build the workforce that employers need by asking them exactly what they want.
“We try to make a perfect match. We’re a match making agency for employers and job seekers,” says Lucas.
And when you can match job seeker skills to employer needs, everybody wins.
This story was informed by the Public Insight Network. If you want to learn how to be a part of our network, click here.
March 27th, 2012
Changing Gears is taking a look at job retraining, one of the hottest topics in our region.
Tomorrow, Meg Cramer reports on a new business-focused approach that calls for companies to to oversee training, so that workers get the skills they need. Later on, we’ll also be looking at how to measure whether retraining is effective.
You can help us figure this out. Employees, have you gotten training to acquire new skills, or to start a new career? Companies, is your business training workers to meet its needs, rather than counting on them to have them?
Take our survey and let us know what works and what doesn’t. We’re also hoping you’ll chat with us about retraining. Tell us how we can get in touch with you.
March 23rd, 2012
Not too long ago, jobs in the new green economy were seen as the number one solution to transform the Midwest economy. You almost couldn’t go to any sort of economic luncheon or policy briefing without hearing about it.
So, how is the Midwest actually doing when it comes to creating these “green jobs”?
Meh. We’re doing all right. Not great. Not horrible.
Yesterday, the Labor Department’s Bureau of Labor Statistics for the first time released data on how many jobs there are in “green goods and services.” The figures include construction jobs for people who weatherize homes, manufacturing jobs for people who make fuel efficient cars and scientific jobs for people who try to come up with environmental solutions, among many other kinds of jobs.
The headline is that the U.S. had about 3.1 million of these green jobs in 2010, accounting for about 2.4 percent of all jobs in the country.
If you just look at the sheer number of jobs, the Midwest did pretty well: Both Illinois and Ohio rank in the top ten. But those are also big states, with lots of jobs. So, if you look at the numbers just based on the percentage of the states’ overall jobs that can be classified as “green,” then the numbers are less impressive.
Basically, most Midwest states are just slightly above average when it comes to green jobs.
Iowa and Minnesota had the highest green job rates in the Midwest. In both states, green jobs make up 2.7 percent of the total number of jobs.
Michigan is the worst state in the Midwest for green jobs, by percentage. It’s tied for 36th in the country, with 2.1 percent of its jobs in the green economy.
Our own Kate Davidson reported last year on Michigan’s struggles to create these kinds of jobs. And former Michigan governor Jennifer Granholm pretty much staked her legacy on clean energy jobs.
So what gives? Politicians across the Midwest have claimed that our states will become leaders in the green economy. Our region may not be failing, but it’s certainly not leading – at least in terms of job creation.
What more needs to happen?
Dustin Dwyer · The Controversial Economic Report That Challenges Everything We Think We Know About U.S. Manufacturing
March 22nd, 2012
Economic reports are not usually the kind of thing that gets the heart racing. But earlier this week, a non-profit think-tank called The Information Technology & Innovation Foundation put out a report that amounts to a bombshell.
We first read about the report in the Washington Post. The basic claim is that manufacturing in this country is not doing nearly as well as advertised. At Changing Gears, we’ve made a lot out of the productivity gains in manufacturing over the past couple of years. According to everything we’ve heard, manufacturing productivity has led the way out of the recession, and Midwest manufacturing has been a major driver of growth.
But the ITIF report provides a blunt challenge to that story line. Some of the claims in the report are controversial, and not widely accepted. But even the federal government now says there could be problems with how it measures manufacturing productivity.
And that could have big implications for the policies our leaders consider in the future.
In one sense, the report tells us what we already know – that manufacturing jobs in the U.S. dropped significantly during the last decade. But it says those job losses were more severe than most economists acknowledge – worse even than during the Great Depression. And the recovery hasn’t been nearly as strong as advertised:
“In short, the United States lost two million manufacturing jobs during the Great Recession, and after the recession just 166,000, or 8.2 percent, returned. That leaves 91.8 percent of jobs to be recovered. At the rate of growth in manufacturing jobs in 2011, it would take until at least 2020 for employment to return to where the economy was in terms of manufacturing jobs at the end of 2007.”
Most economists look at this job loss, and see a silver lining. Even though the U.S. has lost manufacturing jobs, output has been pretty steady, according to federal statistics. That means the manufacturing sector is more efficient, and more productive.
But the researchers at ITIF say that’s not true. They say the federal government makes mistakes in how it measures manufacturing output, and grossly overestimates productivity. From the report:
“Correcting for biases in the official data, ITIF finds that from 2000 to 2010, U.S. manufacturing labor productivity growth was overstated by a remarkable 122 percent. Moreover, manufacturing output, instead of increasing at the reported 16 percent rate, in fact fell by 11 percent over the period.”
This is where disagreements over the report begin. The debate gets a bit technical, but it the core disagreement is about the best way to measure output.
Most of the statistics on our economy come, in one way or another, from the federal government. Our stats on output come from an agency called the Bureau of Economic Analysis.
To understand the debate over how the BEA measures output, it helps to think of your computer. The BEA looks at that computer and says it’s twice as powerful as a computer you would have bought five years ago. So it counts as twice as valuable to the economy – in effect, it counts as two computers being produced.
But the ITIF researchers look at the data and say it’s still just one computer.
The example of the computer is an important one, because it turns out the computer industry has been by far the leading source of manufacturing growth in the U.S.
To understand these numbers better, I called Brent Moulton at the Bureau of Economic Analysis.
He takes issue with the way the ITIF report looks at productivity in the computer industry.
“There’s just a lot more computing technology, so I think counting the number of boxes doesn’t measure the output of computers in a sort of meaningful way,” Moulton told me.
He says these computers do add more value to the economy. And most economists would agree that this value has to be measured in the statistics somehow.
But Moulton agrees that the BEA numbers do have some problems.
For example, the BEA helped fund a recent report that found another problem with its measurements. In this case, the error is in how the BEA accounts for imports. Basically, this report claims the agency is underestimating how much of a role foreign trade plays in the economy.
The report says the government could be overestimating manufacturing growth in non-computer industries by as much as 49 percent.
This report was co-authored by Susan Houseman at the Upjohn Institute, based in Kalamazoo, Mich.
“Our statisital agencies were never set up to measure the kinds of economic activities that are happening now, in a rapidly globalizing economy,” Houseman told me over the phone.
She says the bias in federal output statistics are a real issue. But she also says you don’t even need to take the biases into account to realize that manufacturing is struggling pretty badly. You just need to look at the individual sectors within manufacturing.
“If you back computers out, the remaining 90 percent doesn’t look very good,” Houseman says. “And that’s in the BEA statistics. That’s just facts.”
So why does it matter that the productivity of manufacturing in this country has been oversold?
These numbers help determine policy. And when presidential advisors in the past have looked at rising productivity, and falling jobs numbers, they’ve claimed that our economy is becoming more efficient. They’ve claimed that manufacturing is going through the same transformation that agriculture went through: fewer workers, more value to the economy.
But Houseman doesn’t buy that argument. And neither do the researchers at ITIF.
What they see is an economic sector that is struggling to compete with increasing international trade. And they say it’s time for new policies to address the problem.
March 21st, 2012
This month, we’re looking into some of the hidden assets of the Midwest – the parts of our economy that don’t often get noticed when we talk about our strengths (the first part of the series is here). Agriculture is one of the biggest drivers of local economies in the Midwest – it accounts for billions of dollars worth of exports and thousands of jobs. There’s been a lot of concern about whether enough young people are going into farming these days. But the ag industry goes well beyond being just farming – and plenty of young people are interested in that.
At Navy Pier, a special meeting of the Chicago High School for Agricultural Sciences’s FFA chapter is being called to order. Ringed around the room, one by one, chapter officers check in during the traditional opening ceremony. It ends when President and Senior Jennifer Nelson asks her fellow FFA members: “Why are we here?”
The students stand and chant in unison: “To practice brotherhood, honor agriculture opportunities and responsibilities, and develop those qualities of leadership that an FFA member should possess.”
These students are part of the 17,000 FFA members in Illinois alone. Membership in the organization overall has increased 20 percent since 2000, to more than half a million members across the country. But there’s a reason why FFA no longer calls itself Future Farmers of America.
Actual farmers make up just about two to four percent of the American work force. But people who work in related industries that depend on what farmers do account for at least a quarter of the entire work force. That includes everyone from people in food services jobs to Kraft executives to commodities traders.
These students were at the Chicago Flower and Garden Show to exhibit a garden they designed and built, and to sell food produced in the school’s kitchens.
Applications to the public school – located on the far south side of the city – have almost doubled in the past year.
But student Justice Plummer wasn’t so sure about agriculture when she first found out she got in. Her mom convinced her to go, and she’s never looked back – even though she’s the first in her family to go into the industry.
At the moment, Plummer is nine for 13 on being accepted into colleges she applied for – all to study agricultural business. She wants to major in agriculture business in college, and eventually get her Master’s degree and work in the Peace Corps, all in relation to agriculture business or finance.
“Everybody looks at me, like, ‘Agriculture?’” she says, laughing. “They just think of farming. But it’s all about food, clothing and shelter, and people are always going to need those kind of jobs.”
Instructor Corey Flournoy agrees.
“Just here in Chicago – some of the largest food companies are based here, from Quaker Oats to Kraft Foods,” says Flournoy, who is in charge of the new Center for Urban Agricultural Education, a partnership with the University of Illinois. “The opportunities to work in agriculture – because those are agricultural companies – are plentiful. We need more people to go into those fields.”
Educators like to use the acronym STEM to describe this need for people who know science, technology, engineering and math.
“I say that agriculture puts the STEAM into STEM,” said Laurie Kramer, an associate dean at the U of I’s College of Agricultural, Consumer and Environmental Sciences. When I asked her how much farming was a part of the college’s curriculum, she laughed and said you would think it was “big.” That’s what it was like 50 years ago.
“Nowadays, things are very, very different,” says Kramer. Seventy percent of the college’s students come from urban environments. The few students who focus on farming are likely to come from farming families, she said, adding that today, the number of farms – especially those operated by families – is very small.
“It’s very expensive to run those operations, it’s very tricky,” she says.
Part-time farmer Howard Haselhuhn would agree. He’s an electrical engineer for Texas Instruments. But his West Michigan farm has been in his wife Amy’s family for several generations. She’s a CPA. When they were first married, Amy says they thought about farming full-time, but:
“We just didn’t see how we could possibly make a living off of a farm that was this size and growing commodity crops and also make payments off the land,” she says.
Together, the couple saved for 25 years to buy the 420-acre land from the rest of her family. Most of it is rented out to full time farmers. But on the weekends, they make the three and a hour trek west from their house near Ann Arbor to check on their hops crop.
Michigan’s farmers exported $1.75 billion worth of food – mostly to Canada – in 2010. Forecasts are that number will top $2 billion this year. The state’s goal is to double Michigan’s exports in the next five years.
More than half the farms in the Michigan area are what the USDA considers residential or lifestyle farms – meaning that the owners have other full-time incomes. Another 20 percent are retirement farms – what the Hasselhuhns hope this will be.
The farm was started in the 1930s by Amy’s great-grandfather. She says growing up on the farm gave her strong attachment to the land that Howard now shares. And even though they didn’t grow up there, her children have it, too – that weekend, her eldest son and his wife were also up at the farm, helping out. Her hope that is future generations of Haselhuhns will be at this farm, maintaining that attachment to the land.
This story was informed by the Public Insight Network. If you want to learn how to be a part of our network, click here.
The University of Chicago has posted a job opening. The requirements include being able to stand for 45 minutes at a time, and climb 235 winding stairs to get to work. And oh, yes, have some musical ability.
The posting is for a carillon player at the Laura Spellman Rockefeller Memorial Carillon. GapersBlock.com has the details.
What’s a carillon, you might ask? According to the University of Michigan School of Music, Theater and Dance:
“A carillon is a musical instrument consisting of least two octaves of carillon bells arranged in chromatic series and played from a keyboard that permits control of expression through variation of touch. A carillon bell is a cast bronze cup-shaped bell whose partial tones are in such harmonious relationship to each other as to permit many such bells to be sounded together in varied chords with harmonious and concordant effect.”
Carillon players might seem to have limited career opportunities, but there are more carillons around the Midwest than you might think.
By the way, the Chicago job pays $50 per performance.
Take a look at the students at the University of Rochester in New York who are learning the carillon ropes. Do you have a carillon where you live?