economy

user hyperboreal / Flickr

"Get up. Get out. And go see something we'll remember for the rest of our lives."

So says the new radio ad from Pure Michigan urging people to get outside and take in the fall colors in Michigan.

The ad is part of a TV and radio campaign that runs through mid-October according to the Detroit Free Press:

The budget is $2.4 million.

Among the new radio ads promoting Michigan tourism feature Holland and St. Ignace. They'll run in-state plus in Fort Wayne, Toledo and South Bend.

Other targets for "Pure Michigan" ads this fall are the good citizens of Chicago, Indianapolis, several Ohio cities, Milwaukee and Green Bay.

Here's the television ad. Effective?

Pew Charitable Trusts

The report "Downward Mobility from the Middle Class: Waking Up from the American Dream" shows a third of children raised under middle class conditions fell out of the middle class as adults.

The report comes from the Pew Charitable Trusts. In the introduction, researchers cite a popular definition of the American Dream - your children are financially better off than you.

For varying reasons, the dream didn't work out for one third of the people they looked at.

The report used data from the 1979 National Longitudinal Survey of Youth. 12,686 young men and women who were 14-22 years old were part of that survey.

The reports authors define middle class as being "those falling between the 30th and 70th percentiles of the family-size-adjusted income distribution." Or a family with two adults and two kids making between $32,900 to $64,000 (in 2010 dollars).

Author Gregory Acs writes that while the chances of falling out of the middle class reflects what one might expect mathematically, "not all middle-class children are equally likely to fall."

user S 400 HYBRID / wikimedia commons

Saab Automobile AB filed for bankruptcy protection Wednesday.

Saab used to be owned by General Motors. GM sold the company to Spyker Cars in January of 2010.

From the Associated Press:

The owner of cash-strapped car maker Saab filed for bankruptcy protection on Wednesday in a last-ditch attempt to salvage a brand crippled by production stoppages, withheld salary payments and mounting debt.

Swedish Automobile, formerly known as Spyker Cars, said the move would buy it time to receive funding from Chinese investors, currently awaiting regulatory approval, and avoid bankruptcy.

The Wall Street Journal reports this is an attempt at reorganization, similar to Chapter 11 bankruptcy in the U.S.:

Saab Automobile has struggled with its finances for months. Production at its plant in the Swedish town of Trollhattan has been halted since April.

In a bid to solve its long-term funding needs, the car maker this summer signed agreements with two Chinese companies. But Saab will receive no money until regulators in China and Sweden approve the deal, so the company is still strapped for cash.

Dan Bobkoff / Changing Gears

Depending on who you ask, American manufacturing is either the way out of our bad economy, or it’s dead.

Whatever you think, there’s no denying that manufacturing has changed.

That’s the story of Thogus Products in Avon Lake, Ohio.

This manufacturer has changed so much, its President calls it a 61 year-old startup company.

Governor Rick Snyder has signed legislation that would end cash assistance welfare benefits after a family has been receiving payments for 48 months or more. 

About 12,600 cases, many of them families with children, will close and lose their benefits when the law takes effect on October 1.

In a statement, Governor Snyder says four years should be long enough for people to become self-sufficient and some people have been getting cash assistance for as long as 14 years.

Critics of the new limits say many of the people who will lose assistance are families with children, and many of the people who lose the benefits are adults who can’t find a job in a bad economy.

Governor Snyder’s administration says caseworkers will still make sure families who lose benefits will continue to get Medicaid coverage, food assistance, and help with training and job searches.

The savings to taxpayers is pegged at $65 million dollars in the upcoming fiscal year.

Republican state lawmakers say this won’t be the final word this year on changes in the welfare system.

The State House could vote as soon as this week on more limits to public assistance, including making sure automatic teller machines in casinos cannot accept Bridge Cards to make cash withdrawals, and canceling the cards of people with outstanding warrants.

Wisconsin Historical Society

What’s different about our factories? How are things changing in the Midwest, from the way people are trained to what’s being produced?

This month, Changing Gears’ regular Wednesday reports will be devoted to the future of manufacturing.

The days are long gone when all you had to do to get a factory job was know someone. These are not the same places your dad or mom or grandfather worked in. And the expectations of what employers need from you have changed, as well.

We’ll kick the series off tomorrow with a report from Dan Bobkoff. Meanwhile, we’d like to pick your brain.

What kind of factories do you think we’ll be seeing in the Midwest? Which industry will be next to catch hold here?

We’re looking forward to exploring our manufacturing future with you.

Steve Carmody / Michigan Radio

This Wednesday, Flint City Council will consider whether consolidation could be in the city's future.

The Flint Journal reports that a council committee will take up a resolution this Wednesday, with a final decision from council coming next Monday:

Government consolidation in Michigan has been a hot topic since Gov. Rick Snyder told local communities that they would lose out on additional state aid unless they showed a commitment to share services with others to save taxpayer dollars.

Snyder set a Jan. 1 deadline for governments to submit consolidation plans if they want to receive a share of a $200-million pool of funds.

Several local communities, including Burton, Clio, Davison and Davison Township, have already joined the initiative.

The consolidation initiative is known as Future Genesee  and the Journal reports it includes the communities of Burton, Clio, Davison and Davison Township.

screen grab from YouTube video

Yesterday, President Barack Obama told a crowd of around 13,000 in Detroit that the country will rise and fall together:

"Anyone who doesn’t believe it should come here to Detroit," said Obama. "It’s like the commercial says:  This is a city that’s been to heck and back. And while there are still a lot of challenges here, I see a city that’s coming back."

Obama said the nation "cannot have a strong growing economy without a strong growing middle class and without a strong labor movement."

At the event, Obama was previewing his jobs speech, which will be given in front of a joint session of Congress this Thursday (September 8).

"I don't want to give everything away right here, because I want ya'll to tune in on Thursday," Obama said.

"But I'll give you just a little bit.

We’ve got roads and bridges across this country that need rebuilding.

We’ve got private companies with the equipment and the manpower to do the building.

We’ve got more than 1 million unemployed construction workers ready to get dirty right now. 

There is work to be done and there are workers ready to do it.  Labor is on board.  Business is on board. 

We just need Congress to get on board.  Let’s put America back to work."

Here's President Obama's Labor Day Speech:

During the speech, Obama recounted a conversation he had with Michigan Senator Carl Levin:

You know, I was on the plane flying over here, and Carl Levin was with me, and he showed me a speech that Harry Truman had given on Labor Day 63 years ago, right here in Detroit -- 63 years ago.  And just to show that things haven't changed much, he talked about how Americans had voted in some folks into Congress who weren’t very friendly to labor.  And he pointed out that some working folks and even some union members voted these folks in.  And now they were learning their lesson.  And he pointed out that -- and I'm quoting here -- 'the gains of labor were not accomplished at the expense of the rest of the nation.  Labor’s gains contributed to the nation’s general prosperity.'"

(Official White House photo)

 The nation’s home builders are one group expected to closely watch President Obama’s economic address to Congress this week.  Pulte Homes of Bloomfield Hills is the nation’s largest home builder.   

Pulte, like its competitors, has seen its sales plummet as the housing market crashed in recent years.    And past government efforts to prop up the housing market with tax breaks have failed to spur new home construction.      

(photo by Steve Carmody/Michigan Radio)

With the price of gold soaring to near $1,900 an ounce this summer, you may have fantasized about striking it rich prospecting for gold.

Some people are doing more than fantasizing.  They are looking for gold in southern Michigan.  

You wouldn’t think to look at it, but this nondescript campground about 15 miles due south of Battle Creek is one of the centers for gold prospecting in southern Michigan.

Most gold prospectors here are using decidedly low-tech methods.

MSU

The United Auto Workers and Michigan State University collected oral histories from about 125 workers, managers, and others connected to the Fisher Body plant in Lansing.

The plant closed in 2005 after more than 70 years of production. Fisher Body in Lansing was one of the longest operating auto factories in the U.S., according to a Lansing Car Assembly Facebook page.

An MSU labor relations professor, John Beck, headed up the project.

Beck said the oral history recordings "gave a lot of people a voice that they would not have had otherwise."

From an MSU press release:

The plant’s closing in 2005 threatened to effectively bury the workers’ experiences. But through the MSU/UAW partnership, these stories – which run the gamut from first and last days on the job, to tales of racism and sexism, to statements of pride and teamwork – are now part of a digital catalogue at MSU’s G. Robert Vincent Voice Library. The catalogue is called the Lansing Auto Town Gallery.

S&P/Case-Shiller Home Price Indices

Data released today by the S&P/Case-Shiller Home Price Indices show that through June, home prices nationally were back to their early 2003 levels.

But home prices in Detroit were at pre-2000 levels. The Detroit market was down 6.6 percent when compared to the previous year.

That put's Detroit in a bad category along with some "sunbelt" cities, according to S&P/Case-Shiller:

At the other extreme, those which set new lows in 2011 include the four Sunbelt cities – Las Vegas, Miami, Phoenix and Tampa – as well as the weakest of all, Detroit. These shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together.

The Detroit Free Press quoted a statement from Patrick Newport, a U.S. economist with IHS Global Insight:

"Detroit, where prices have dropped nearly 50% since peaking in late 2005, remains, by far, the weakest market,” he said. “Detroit avoided a big run-up in housing prices during the boom years, but was hit hard by the recession."

LANSING, Mich. (AP) - Democrats in the Michigan Legislature say they want to revive tax incentives specifically set aside for advanced battery manufacturers.

The industry-specific tax credits are among those scheduled to be phased out under tax policy changes approved by the Republican-led Michigan Legislature and Gov. Rick Snyder.

Democrats say Monday they'll support bills that would continue the industry-specific credits for battery production, facility construction and related activities.

The Democratic plan also would include tax credits for buying electric vehicles and charging stations.

Michigan's tax credit program and federal assistance have helped several battery manufacturers get started in the state. Credits that already have been granted will be honored. But Snyder and Republicans say they don't want to pick winners and losers with industry-specific tax credit programs.

New York Times: "Does America need manufacturing?"

Aug 29, 2011
Lindsey Smith / Michigan Radio

“You can drive almost anywhere in the state of Michigan – pick a point at random and start moving – and you will soon come upon the wreckage of American industry.”

That’s the first sentence in a story in this week’s New York Times Magazine about the seismic downturn in manufacturing over the past decade and its tenuous future in the U.S.

For decades, The Times says, the federal government has largely maintained a policy of letting the marketplace dictate the economy. That is, it hasn’t propped up ailing sectors of the economy nor tinkered with aid packages to strengthen niche industries the way China and Japan have maintained active hands in shaping industry.

That’s changed in recent years under the Obama administration. Notably, the federal government rescued American automobile manufacturers and parts suppliers through approximately $82 billion in loans and other incentives. In particular, the government has delivered $2.5 billion in stimulus money to 30 or so companies exploring advanced battery technology. One White House official tells The Times the battery money goes to “the far edge” of how far the federal government is going to create new jobs and boost a nascent industry.

“It’s naïve to believe that we just have to let the markets work and we’ll have a strong manufacturing base in America,” Michigan Senator Carl Levin (D) tells The Times.

The alternative raises questions. What is the federal government’s new role in spurring industry? What’s its responsibility in ushering a transition to a knowledge-based economy? And, as The Times asks in its provocative headline, does America need manufacturing?

This morning, Michigan Radio's Lester Graham released a story highlighting what could be at stake if changes are made to the personal injury protection portion of Michigan's no-fault insurance requirements.

Michigan Senators Joseph Hune (R-22nd district) and Virgil Smith (D-4th district) have sponsored legislation that would end the mandatory personal injury protection (PIP) coverage of Michigan's no-fault auto insurance law.

It means that Michigan drivers could choose what level of personal injury protection insurance they would like to buy.

Under the bills, drivers could cap their personal injury protection insurance at $50,000 - a fraction of the coverage needed should they be in serious accident.  It would also mean they would not pay into and not be eligible for funds from the Michigan Catastrophic Claims Association fund, which makes the unlimited, lifetime benefits for people severely injured in a auto accident possible.

Now, a new poll sponsored by a group fighting these bills, the Coalition Protecting Auto No-Fault, finds the majority of Michigan voters don't want the changes.

From their press release:

The telephone survey of 600 voters by Chicago-based Glengariff Group found that 62 percent of those polled oppose limits on the amount of medical and rehabilitation care an accident victim could receive from their auto insurer; 27 percent support limits on medical and rehabilitation benefits and 11 percent were unsure. Of those opposed to limiting medical and rehabilitation auto injury benefits, 43 percent indicated strong opposition.

The Coalition's press release says "if auto insurers no longer covered injury costs for those suffering catastrophic injuries – which can cost tens of millions of dollars over the course of a lifetime – medical costs would shift from insurance companies and onto the taxpayer-funded Medicaid insurance program once family assets were depleted."

The bill to make changes to Michigan no-fault insurance law is expected to be taken up by the legislature early in September.

Tino Rossini / Flickr

Disappointing economic data seems to be rolling in more frequently these days. The U.S. economy grew "a meager 1 percent" from April through July (a downgrade from an earlier 1.3 percent estimate), and unemployment numbers show no signs of improving (here's a cartoon of people looking for work in downtown Portland).

Now, news of cuts in production at GM.

From the Associated Press:

General Motors is cutting its production of pickup trucks next month, a sign that truck sales aren't as robust as the company had hoped.

A GM spokesman says the company cancelled five scheduled overtime shifts on Saturdays in September and October. He didn't know how many vehicles would be involved, but the Flint, Mich., plant where the pickups are made can produce 900 trucks per day.

Full-size pickup truck sales were up 9 percent for the year through July in the U.S., compared with a year earlier, according to Autodata Corp. But that increase was smaller than the industry saw as a whole. Continuing weakness in the housing and construction sectors has dampened demand for trucks. Sales of the Chevrolet Silverado, GM's best-selling truck, were up 7 percent.

Lester Graham / Michigan Radio

Part 3 of 3 part series -

Salmon fishing has meant a lot of tourism dollars for cities along the coasts.  But, changes in Lake Huron have caused a collapse of salmon.  But, what if other Great Lakes lose their salmon?

Fishing for salmon on some parts of Lake Huron is still a big deal.

INTERNET AUDIO ADVERTISEMENT

“This July for the first annual Mackinaw City Salmon Festival..."

(photo by Steve Carmody/Michigan Radio)

A new survey finds Michigan retailers are growing more optimistic that they will see their sales improve over the next three months.    

Tom Scott is with the Michigan Retailers Association.   He says the survey’s results are the most optimistic state retailers have been about the economy since the end of last year.

 "I think we’re scratching our heads a little bit over why there’s so much optimism out there…given the mixed economic news we’ve been getting. "

U.S.E.P.A.

The U.S. has suffered from a bad economy for the last three years.

Parts of the Great Lakes have suffered from bad pollution problems for the last several decades.

Now, the U.S. Environmental Protection Agency wants to use money from the Great Lakes Restoration Initiative (GLRI) to put people to work cleaning up pollution in the region.

From an EPA press release:

The U.S. Environmental Protection Agency today announced that the Great Lakes Restoration Initiative is setting aside approximately $6 million for federal agencies to sign up unemployed workers to implement restoration projects in federally-protected areas, on tribal lands and in Areas of Concern in the Great Lakes basin. EPA will fund individual projects up to $1 million. To qualify for funding, each proposed project must provide jobs for at least 20 unemployed people.

“These projects will help to restore the Great Lakes and put Americans back to work," said EPA Great Lakes National Program Manager and Regional Administrator Susan Hedman. "In a sense, we will be using these funds to create a small-scale 21st century Civilian Conservation Corps."

The AP reports that Congress has appropriated $775 million over the past two years for the GLRI.

One of the GLRI's main goals is to clean up toxic hot spots known as "Areas of Concern" around the Great Lakes.

These Areas of Concern have been identified for decades, but clean-up efforts have stalled as funding for clean-up has been scarce.

EPA officials say they will award funding for these new clean-up projects by the end of September.

Detroit Public Libraries

As Michigan Radio's Sarah Cwiek reported last February, "libraries face a tough paradox.  People tend to use them more when the economy is bad. But a bad economy also means they get fewer resources to work with."

Cwiek was reporting on the Detroit public library system which at the time was facing a $17 million budget shortfall.

This past spring, the city proposed closing 18 libraries, but then backed away from that proposal.

Staffing cuts were made, and now, according to the Detroit News, the city is proposing to close six of its 23 libraries because the "layoffs of about 40 staffers in spring hurt service and forced some branches to temporarily close on some days."

The News visited one library slated for closure and talked to people there:

Erin Carter...searches for jobs using computers at the Chase branch in northwest Detroit that is recommended for closure.

"There is so much stuff closing down," said Carter, 22. "I don't know where to go."

The small library at Seven Mile and Southfield Freeway was packed Tuesday afternoon and every computer was in use. Fifteen-year-old Brandon Thomas and his neighbor, 12-year-old Kalan Lewis, rode their bikes to the library for the first time Wednesday to pick up some books and look for the Civil War movie, "Glory."

"They shouldn't close it," Kalan said. "It's for kids. We need to be able to learn what we don't learn in school."

The libraries on the list for potential closure:

LANSING, Mich. (AP) - Residents involved in roughly 12,500 welfare cases in Michigan could lose benefits under a stricter, four-year lifetime limit that has received final approval in the Michigan Legislature.

The Republican-led House passed the legislation with 73-34 votes Wednesday mostly along party lines.

The measures will go to Gov. Rick Snyder.

The welfare limit already has been approved as part of the state budget that kicks in Oct. 1. Lawmakers plan to put the cap in a separate state statute to help implement the budget plan. The state's current four-year limit on welfare benefits would expire Sept. 30 unless the Legislature revises or extends the limitations.

The revised welfare limits have fewer exemptions than the four-year limit now in state law.

Kate Davidson / Changing Gears

Foreclosure activity dropped by more than a third this past year, according to the group RealtyTrac. But despite the national slowdown, regional companies that take care of foreclosed homes are still thriving. Their job is to keep empty houses clean and safe from the forces that depress local property values: squatters, thieves and decay.

Dawn Hammontree probably never expected to see their work firsthand.

The first part of Hammontree’s story is familiar in Michigan. Her unemployment ran out in December.

Lester Graham / Michigan Radio

Part 2 of a 3 part series -

Fishing in the Great Lakes would not be what it is today without stocking Pacific salmon in the lakes.  But it costs a lot of money.  Michigan fisheries managers say it’s worth every dime.  In the second report of the series 'The Collapse of the Salmon Economy," we look at the economic benefits of subsidizing salmon fishing in the Great Lakes.

In the 1960s, the state of Michigan first put salmon into the Great Lakes.  It was a gamble to create world-class recreational fishing. 

Michigan spends about $8-million a year stocking salmon and other types of fish.  But the Department of Natural Resources doesn’t really know how many fish we’re catching for those millions of dollars.

Gary Whelan is in charge of the Michigan Department of Natural Resources fish hatcheries. 

“I wouldn’t say we have no idea.  I think we have a ballpark.  We don’t have a great estimate.  We would like to have a lot better estimates than we have now.  I would absolutely agree with that.”

A Michigan Watch analysis found the cost for each fish caught in Michigan waters ranges from a couple of dollars to $150 per fish caught, depending on species and depending on year.  We use catch estimates used by some other Great Lakes states.

The Michigan DNR’s Gary Whelan questions those estimates and our calculations.

And… he says besides, we’re looking at it all wrong.  It’s not about the cost per hatchery-raised fish caught; it’s about what those salmon mean to Michigan’s economy. 

“You have lots of people, for example, who are catch-and-release fishermen who will never take fish home.  But, they’re spending a lot of money to go fishing for this fish or the opportunity to fish for them.”

And stocking Pacific salmon does attract anglers from all over.

Lester Graham / Michigan Radio

To understand why salmon are so important to the Great Lakes and the Michigan economy, you first have to understand some history.

It used to be the lake trout was the fish to catch.  It was big.  It was tasty.  But, by the late 1950s, that fish and others had been severely over-fished.  And, an eel-like, blood-sucking parasite called the sea lamprey further reduced lake trout numbers.

Those weren’t even the worst problems for lake trout.  A fish called the alewife invaded the Great Lakes through manmade canals.  Lake trout starting feeding on alewives.  But  alewives caused a thiamine deficiency in lake trout.  A lack of vitamin B-1.

Mark Gaden is with the Great Lakes Fishery Commission

“The thiamine deficiency that the alewives cause is one of the top reasons why natural reproduction has been very slow to occur over the decades in the Great Lakes of these species.”

Catching a lake trout became rare.

ChazWags / Flickr

A new State Police report says traffic crashes in Michigan carry a price tag of $4.8 billion dollars a year. The report says the cost of traffic crashes in Michigan exceeds the cost of crimes.

Researchers used data from 2009, when the human toll of traffic crashes was 937 deaths and more than 70,000 injuries. They put the economic damage for those crashes at $4.8 billion dollars. That includes the cost of medical care, property damage, and lost earnings, among other things.

The institute also used data on jury awards to put a value on pain and suffering caused by traffic crashes, which put the number over $9 billion dollars. The study compared the dollar loss from crashes to the cost of violent and property crimes that are tracked by the state, and found the costs of crime are dwarfed by the costs of traffic crashes.

The report was commissioned by the state Office of Highway Safety Planning and was conducted by the University of Michigan Transportation Research Institute.

user dig downtown detroit / Flickr

DETROIT (AP) - A group of young Jewish professionals attracted to the vitality of Detroit's evolving downtown wants to bring others into the city decades after their parents and grandparents left.

CommunityNEXT Director Jordan Wolfe says the 25 people targeted through a rent program would help return Jewish culture to Detroit and contribute to the city's revitalization.

Subsidies of $250 per month for a year will be offered. Wolfe says he is seeking to bring in people "who get a kick out of building a community."

The rent program piggybacks offers major corporations and businesses are making to entice their employees to relocate downtown or to Detroit's growing Midtown area.

A dodgeball tournament fundraiser is scheduled for Saturday in Detroit and will be followed Sunday by a kickball tournament in Los Angeles.

Last of a five-part series

In Michigan, one in 10 people who want work can't find a job, and that number doubles if you include people who are underemployed or who have just given up on their job search.

But despite high unemployment, some employers are still finding that the search for talent can be a challenge.

At the Hamilton Farm Bureau cooperative in southwest Michigan, a 50-ton truck is taking in a load of grain that will go to feed cattle.

user: Beverly & Pack / flicker.com

The White House has announced President Obama will make a statement shortly. We expect the president to address the downgrading of US credit. Click the "listen live" button above, to stream special coverage from NPR. 

Dan Bobkoff / Changing Gears

Our Changing Gears team has been on the road this week traveling to some of our company towns in the Midwest.

Changing Gears is a Michigan Radio project looking at the economic transformation of the industrial Midwest.

Our final stop is Orrville, Ohio: A place that seems like a company town, but there’s long been a whole lot more going on in Orrville.

Nobody can dispute that Detroit doesn’t work very well anymore. There is vast poverty, unemployment, and blight. Plus a litany of other problems, most of which are well-known.

The question is, what do we do about them? What can anyone do about them? Within the last few years, the city has also been forced to face another unpleasant truth. There are too few people.

Too few, that is, for a city of Detroit’s physical size. You could tuck Manhattan and Boston within its borders and still have room left over. Once, Detroit was a bustling city of nearly two million people.

They weren’t packed together like sardines, but were spread out, largely in well-maintained single-family homes. That was sixty years ago, and pretty much everything is different now.

The census showed that there are barely seven hundred thousand people left. In some cases, one of two families remain on blocks otherwise filled with vacant or burned-down homes. There began to be talk about “shrinking” or “consolidating” the city.

People talked about ways to get people to move from the worst areas to more hopeful neighborhoods, to make it easier to provide city services. The mayor announced that his team would identify four to ten stable neighborhoods as part of a project he called “Detroit Works,” and then build up and further strengthen them.

This all made good, sound logical sense.

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