Brewed Fresh Daily

Three stories making news across the Midwest today:

1. Ohio’s unemployment rate rises. Employers in Ohio added more jobs in July, but the state’s unemployment rate nonetheless inched upward 0.2 percent to 9 percent overall, the Columbus Dispatch reported Friday. It’s the second consecutive month the figure has climbed. A separate survey showed Buckeye state manufacturers added 7,900 jobs in July. Ohio wasn’t the only state to see an unemployment climb. Earlier this week, Michigan’s unemployment rate jumped 0.4 points to 10.9 percent in July.

2. Chicago casino’s path clearer. “I cannot continue to have Hammond, Indiana, get $20 million a month while our infrastructure is crumbling.” That’s how Chicago mayor Rahm Emanuel explains his transition from a position of reluctance to now embracing the idea of a Chicago casino. CBS Chicago says the mayor believes he and Illinois governor Pat Quinn can iron out differences in casino plans. The Illinois state senate still has a hold on a bill that paves the way for the casino and other state gambling.

3. Michigan governor seeks court ruling. Gov. Rick Snyder has asked the Michigan Supreme Court to quickly address the constitutionality of legislation he signed earlier this year that allows emergency managers to take over financially troubled communities and school districts. Opponents of the law who filed a class-action lawsuit in Ingham County earlier this year called Snyder’s move an attempt to “bypass the judicial system,” according to the Detroit Free Press.

On a three-day bus tour through the Midwest this week, President Obama expressed confidence the region’s fragile economy would show gradual improvement over the next year.

Depending on the vantage point, that has different meanings.

In Iowa, the unemployment rate hovered at 6.0 percent in June,” a rate that “is much higher than Iowans are comfortable with,” said David Swenson, who teaches economics at Iowa State University, during a roundtable discussion Wednesday on PBS News Hour.

In Michigan, such a figure would be cause for relief. The state holds the Midwest’s highest current unemployment rate at 10.5 percent. It also endured the region’s highest peak unemployment rate, reaching 14.1 percent in September 2009.

The loss of manufacturing jobs has been a significant theme in Michigan and Ohio, where the unemployment rate hovered at 8.8 percent in June. Agriculture has protected the economies of the western Midwest state to some extent. But now, manufacturing losses have spread to places like Minnesota and Iowa, two of the three states Obama visited.

“Manufacturing is a big component of the Iowa economy,” Swenson said. “We know that manufacturing has taken an extra-special hit.”

Though unemployment rates differ by as much as 4.5 percentage points throughout Midwestern states, one common thread is that all are leery of a recent uptick in their rates following declines over the past year-and-a-half. Minnesota’s rate crept upward to 6.7 percent in June after reaching a low of 6.5 percent two months earlier. Illinois’ rate stood at 9.2 in June after falling to 8.8 percent in March.

“People say that manufacturing is coming back, and it is coming back to a certain extent, but there are still jobs being lost,” Micki Maynard, senior editor of Changing Gears, said on the NewsHour segment.

“You need a bulk of jobs to come back and replace the jobs that were lost,” she said. “There was something like 500,000 jobs lost in Michigan alone during this recession, and there really aren’t the magic bullets that are going to create those thousands of jobs that can come back, so those people can go back to work.”

Can the middle class be saved? That’s the provocative title of a recent piece in The Atlantic Monthly, which takes an in-depth look at the challenges posed by the nation’s economic woes.

Writes its author, Don Peck:

“It’s hard to miss just how unevenly the Great Recession has affected different classes of people in different places.” 

From 2009 to 2010,he said, wages were essentially flat nationwide—but they grew by 11.9 percent in Manhattan and 8.7 percent in Silicon Valley. In the Washington, D.C., and San Jose (Silicon Valley) metro areas, job postings in February of this year were almost as numerous as job candidates.

In Miami and Detroit, by contrast, for every job posting, six people were unemployed. In March, the national unemployment rate was 12 percent for people with only a high-school diploma, 4.5 percent for college grads, and 2 percent for those with a professional degree.

The story looks at what MIT economist David Autor calls a trend toward “employment polarization.” Autor found job losses have been “far more severe in middle-skilled white- and blue-collar jobs than in either high-skill, white-collar jobs or in low-skill service occupations.”

From 2007 through 2009, Autor says, total employment in professional, managerial, and highly skilled technical positions was essentially unchanged. Jobs in low-skill service occupations such as food preparation, personal care, and house cleaning were also fairly stable.

Overwhelmingly,he said, “the recession has destroyed the jobs in between. Almost one of every 12 white-collar jobs in sales, administrative support, and non managerial office work vanished in the first two years of the recession; one of every six blue-collar jobs in production, craft, repair, and machine operation did the same.”

Take a read, and let us know what you think.

WBEZ 848 Host Alison Cuddy

Our partners at WBEZ‘s daily news magazine show 848 today featured a retrospective on Changing Gears, including our recent Road Trip stories and a few others.

I sat down with 848 Host Alison Cuddy to provide some insight about the series, including the reason we decided to do it, and a few other tidbits that never made it on the air.

I also provided a preview of some stories we’re planning for the fall. Take a listen.

Three stories making news across the Midwest today:

1. Mixed unemployment numbers. The number of people applying for unemployment benefits rose above 400,000 last week, but the nation’s four-week average fell to the lowest levels seen since mid-April, according to The Associated Press. A report from the U.S. Labor Department said Thursday that applications rose to 408,000. They have remained above 400,000 in 18 of the past 19 weeks. But the four-week average fell for the seventh consecutive week to 402,500.

2. Wisconsin property values decline. For the third consecutive year, property values fell across Wisconsin in 2010. The value of homes, businesses and other property declined by 1.8 percent to $487 billion, according to a report by the state’s Department of Revenue. In 2009, values declined by 3.1 percent. Before the three-year slide, Wisconsin had only one other year on record, 1959, when property values declined, according to the Milwaukee Journal Sentinel.

3. Lyric Opera averts strike. Officials the Lyric Opera of Chicago and America Guild of Musical Artists announced a tentative, one-year contract agreement Wednesday that likely averts a strike, according to the Chicago Sun-Times. The agreement must still be ratified by union members and the Opera’s board of directors. The opera’s seasonal performances are scheduled to begin on Sept. 10 at Millennium Park.

Incompetence has its consequences.

Lexington, KY is the winner when it comes to the expansion of GE’s high efficiency lighting products.

GE Lighting to Expand Manufacturing In Lexington

The jobs in Lexington: $25 per hour plus benefits.

I could never quite figure out why the corporates in Cleveland could never see the opportunity with GE Lighting.

Instead, they backed the bonehead strategy of Cleveland to recruit a no-name Chinese LED manufacturer in a bogus sole source project. GE saw through the scam. More here.

Years ago, when I directed the Center for Regional Economic Issues at Case Western Reserve University, I went out to Nela Park — our country’s first industrial park — to explore stronger relationships with GE Lighting. (For more on the rich history of Nela Park, go here.)

I found GE executives there willing to partner, but curious why leaders in Cleveland did not pay any attention to the opportunity. No one had visited them in years.

When housing REI at Weatherhead became an issue, I even proposed to then President Hundert that we move the Center to Nela Park. The business school’s response: Shut down the Center.

(Odd, to say the least, given all the emphasis these days on regional innovation strategies.)

GE Lighting provided Cleveland with a strong anchor to attract GE business partners in the fast growing markets for high efficiency lighting. (Companies like Cree.)

Despite the opportunity to partner with GE Lighting and work on a high potential new cluster, the corporates have blown it.

Don’t be surprised to see the Nela Park facility moving soon. Kentucky smells an opportunity. Kentucky’s political and business leaders — from the governor on down — lined up behind GE to get this investment. Read more.

You cannot be serious if you think Kentucky will ignore the opportunity to come after the headquarters of GE Lighting. They’ll see it as an anchor to their emerging cluster. (Disclosure: Both the Kentucky Cabinet for Economic Development and Commerce Lexington are former clients of mine.)

Meanwhile, NorTech, Team NEO and the Greater Cleveland Partnership have been….where?

My guess: GE will be gone from Cleveland within 3 years.

Go figure.

Could a compromise be coming on SB5?

Ohio governor John Kasich asked union leaders Wednesday to put aside past differences and seek a deal on the controversial collective bargaining legislation, one that would remove a referendum on the bill from November ballots. He asked to meet with union leaders Friday.

On the possibility of a compromise, Kasich wrote a letter to leaders of We Are Ohio, an organization formed to oppose SB5, saying, “We ask you to consider this option and join us in working with determination toward a compromise for the benefit of the taxpayers we all serve.”

We Are Ohio leaders responded shortly after the release of the letter Wednesday and Kasich’s ensuing press conference, saying that lawmakers can repeal the entire bill or let the referendum settle the bill’s fate in Nov. 8 elections.

“The time to negotiate was during the legislative process, not 197 days after Senate Bill 5 was first introduced in the Ohio Senate,” Senate Democratic leader Capri Cafaro told The Columbus Dispatch, which first reported the possibility of a deal Saturday. “Unfortunately, it has taken too long for the governor and GOP leaders to acknowledge they overreached.”

Senate Bill 5 seeks to limit the collective bargaining rights of public employees, outlaw seniority as a factor in layoffs and mandate that employees pay for higher portions of health-care benefits, among other provisions.

Aug. 30 is the final day that lawmakers could remove the issue from the November ballot.

It’s been five months since the Japanese earthquake and tsunami. The human toll from the disaster has been well documented, along with the ongoing nuclear safety issues. And, Japan is seeing a food safety issue, as well.

As I reported back in March, the economic ties between Japan and the Midwest are strong. Governors from Illinois, Iowa, Michigan and Minnesota are attending the 43rd annual joint meeting of the Midwest U.S. – Japan Association in Tokyo next month, the Japan External Trade Organization reported in its most recent newsletter.

Just a few miles inland from Japan's coastline, months after the disaster (Kasper Nybo via Flickr Creative Commons)

Most recent manufacturing output data shows that the U.S. auto industry has been able to bounce back from disruptions because of the earthquake, Reuters reports.

But it’s not just the auto industry. Also in the JETRO newsletter: the story of healthcare giant Abbott Laboratories, which has its global headquarters just north of Chicago, and how it dealt with the earthquake.

Abbott has 2,400 workers in Japan, and said it learned lessons about how to deal with its people and its operations. For example, the company found that it had good relationships with its first and second tier suppliers. Further down the chain, with its suppliers’ suppliers, was just as vital, but harder to track.

“We saw first-hand the importance of drilling down to identify the basic components of the product supply chain and developing contingency plans for every element, especially for single-sourced items,” said Corlis Murray, an Abbott vice president of global engineering services. You can read  the whole story here.

Three stories making news around the Midwest today:

1. Obama revising economic plan. Seeking a boost for a flagging economy, President Obama will “give a major speech in early September to unveil new ideas for speeding up job growth,” according to a report Wednesday from the Associated Press. The plan will likely contain tax cuts, infrastructure ideas and steps to help the unemployed, according to the report, and will go beyond the “infrastructure bank” idea the President has pitched in recent weeks that would finance construction jobs.

2. Ohio loses public employees. The number of Ohio state employees dropped by more than 1,000 in the first half of Gov. John Kasich’s first year in office, according to our partner station Ideastream. The current count is just more than 57,000, although more trimming is expected because of spending cutbacks that took effect in July under the current fiscal budget.

3. EPA awards Great Lakes funds. Federal officials announced Wednesday a list of upcoming projects that will be funded under the ongoing Great Lakes Restoration Initiative. More than $700 million has been spent or committed under the initiative under President Obama, according to the Milwaukee Journal Sentinel. “For the regional economy to thrive, we need to accelerate our efforts to comprehensively attack problems such as habitat loss, invasive species and pollution,” said Cameron Davis, the EPA’s spokesperson for the program.