economy

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.

Headed out to go salmon fishing on Lake Michigan near Grand Haven.
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.

Dan Bobkoff / Changing Gears

When a company bears the name of its hometown, it can be hard to separate the two. Such is the case with Norwalk Furniture and the town of Norwalk in Northern Ohio. Sue Lesch is the town’s mayor.

“It really is our flagship company,” said Sue Lesch, Norwalk’s mayor. “It’s the company we’re proud of. We’re known for furniture all over the country.”

For more than a hundred years, Norwalk Furniture made custom-order sofas and chairs in its Ohio factory. For a long time, it was the biggest business in town, employing about 700 in this town of 17,000.

In the midst of a heated debate in Washington D.C. over the U.S. debt limit and with the country facing a possible credit downgrade, Michigan’s economy is getting a pat on the back. Fitch Ratings has revised its outlook for Michigan bonds from ‘stable’ to ‘positive,’ the Associated Press reports. From the AP:

The New York ratings agency left the state's overall bond rating unchanged Wednesday at AA-, an investment-grade rating that's three steps below the top AAA rating.

Gov. Rick Snyder met with analysts at Fitch, Moody's and Standard and Poor's on June 13 to discuss the state's growing economy and how the 2011-12 budget eliminates ongoing deficits without one-time fixes.

Fitch took note of the budgeting changes. It says its positive outlook also reflects efforts to put away more in the state's rainy day fund and "grow reserve levels."

The state lost its top AAA bond rating from Standard and Poor's in 2003.

As the Detroit News reports, on Tuesday Governor Snyder told reporters that, "Lawmakers in Washington should look to Michigan 'as a good role model for success' as they try to resolve a battle over raising the national debt ceiling that is approaching a crisis."

Airliner.
Andrey Belenko / Flickr

Delta Air Lines says some 2,000 workers have taken voluntary buyouts. In a cost-cutting move in response to high fuel prices, it will scale back its flight schedule more than planned this year.

The high cost of jet fuel was the main reason Delta's second-quarter net income fell by 58 percent compared to a year ago. It earned $198 million, or 23 cents per share. Fuel costs were up 36 percent.

At the same time, revenue rose 12 percent as Delta raised fares to try to pay the increased fuel costs.

Delta would have earned 43 cents per share if not for one-time items including severance costs and reducing its facilities. On that basis, profit was below forecasts.

DeWitt Clinton / Flickr

UPDATE  1:45pm

The leader of thousands of rural mail employees says she’s worried about a U.S. Post Office proposal that could close many small town post offices.  The national postal officials say they need to make cuts to reduce red ink.  The postal service lost eight billion dollars last year.  

Cindy Opalek is the president of the Michigan Rural Letter Carriers Association.   She says closing small town post offices will hurt rural communities. 

“The people who work there get a little more connected…a little more bonded with the people that they serve.   That will be a shame if they lose that.    Does the (U.S.) Post Office care?   I couldn’t tell you." 

ORIGINAL POST: 1:05pm

The U.S. Postal Service has released a list of 62 Post Offices in Michigan that they're studying for closure.

The potential closures could affect smaller cities like Kingsford, Baron City, and North Star. And they could also affect bigger cities like Grand Rapids, Detroit, and Lansing.

In a statement, Postmaster General Patrick Donahue said closed offices could be replaced by "expanded access locations" - similar to how some pharmacies are now located in your grocery store:

“Today, more than 35 percent of the Postal Service’s retail revenue comes from expanded access locations such as grocery stores, drug stores, office supply stores, retail chains, self-service kiosks, ATMs and usps.com, open 24/7. Our customer’s habits have made it clear that they no longer require a physical post office to conduct most of their postal business.”

The U.S. Postal Service currently operates 32,000 retail offices (the largest retail network in the country). It's studying the potential closure of 3,700 offices.

The USPS suffered $8.5 billion in losses in 2010.

Is your city on this list? How would you feel if your local post office was closed?

Russ Climie / Tiberius Images

UPDATE 4:30 p.m.

One hundred thirty million will be available to Michigan businesses as part of a new grant program. The money is the first of the Small Business Association’s Impact Investment Initiative. The goal is to help grow and create jobs through public-private partnerships. The InvestMichigan! fund is a partnership between the SBA, Dow Chemical Company and state funds.

Karen Mills is with the SBA. She says Michigan was the perfect place to start the program.

“Michigan has great assets. It has one of the highest engineers per capita for any state. It has a well-trained workforce, it has great universities and it has extraordinary entrepreneurs,” Mills said.

The program will distribute 1-point-5-billion-dollars to businesses nationwide throughout the next five years.

- Amelia Carpenter - Michigan Radio Newsroom

ORIGINAL POST: 12:21 p.m.

Details on a public-private grant program aimed at helping small to medium sized businesses in Michigan will be announced during a press call at 1 p.m. today.

Governor Snyder will discuss the new program along with Karen Mills of the U.S. Small Business Administration, Andrew Liveris, Chairman and CEO of Dow Chemical Company, State Treasurer Andy Dillon, and Kelly Williams of Credit Suisse's Customized Fund Investment Group.

Andrew Dodson of Booth Mid-Michigan reports that Dow Chemical's investment in the program is expected to facilitate investment from the federal and state government:

According to a source close to the information, the program's impact will be "quite substantial." Dow Chemical is expected to provide funds and help facilitate bringing federal and state funds to bear upon local markets."It's meant for businesses who need financing, but can't get loans or financing right now," the source said.InvestMichigan! is a group with a series of funds focused on growing the next generation of Michigan companies, according to its website, and is one of the partners involved in today's announcement. It's federal counterpart, ImpactAmerica, is also involved.

Amelia Carpenter in the Michigan Radio Newsroom will be on the call and will have more for us later.

Niala Boodhoo / Changing Gears

From Pullman in Chicago to Firestone in Akron, these employers loomed large in everyone's daily lives.

But what does a "company town" look like today?

The Changing Gears team hit the road to find out.

All this week, we’re looking at how these places are coping with economic change.

For our first story, I visited the village of Kohler, Wisconsin.

user meddygarnet / Flickr

UM Flint received around $2.1 million in grants from the U.S. Department of Health and Human Services for nursing programs geared toward minority groups.

The university highlighted three programs that will receive funding.

  1. $1.2 million will go to a program call UM-FIND (UM-Flint Initiatives for Nursing Diversity) to continue its work aimed at "increase nursing education opportunities for students from disadvantaged backgrounds." The grant provides funding to the program for the next three years.
  2. $700,000 will go to UM-FISCUP (UM-Flint Initiative to Strengthen Care to Underserved Populations). The program educates graduate nursing students about poverty and health care disparities among medically underserved populations. "It will allow an increase in student clinical placements with underserved populations and in the number of minority nurse practitioners, and that will lead to improvements in the by and large health of Flint and Genesee County residents."
     
  3. $221,000 will be used for scholarships for disadvantaged student scholarships and $32,000  will be used for graduate student stipends for Nurse Practitioner and Nurse Anesthesia students.
Jennifer Guerra / Michigan Radio

As Michigan Radio's Jennifer Guerra reported yesterday, even lemonade stands are not immune to the down economy.

Guerra talked with Molly and Lucy Prochaska who have been in the lemonade business for five years.

They described how they stopped getting "lots of money" once the economy took a dive.

But the pair is not giving up. Especially with a competitor setting up nearby.

As you can see in the photo above, the lemonade duo is working to capitalize on their public radio appearance.

It's too early to tell whether the "Michigan Radio Bump" will pay off, but don't count these kids out.

Martin Kalfatovic / Flickr

CEO Mike Edwards sent a goodbye note to customers today as going out of business sales start at Borders Book stores across the country.

In his note, Edwards explained why the company couldn't keep their doors open:

We had worked very hard toward a different outcome. The fact is that Borders has been facing headwinds for quite some time, including a rapidly changing book industry, the eReader revolution, and a turbulent economy. We put up a great fight, but regrettably, in the end, we weren't able to overcome these external forces.

Over the last decade, the company made many missteps that led to its demise. One of the most notable was the company's failure to invest early in online book sales. Analysts say other problems included being overextended in real estate holdings for the bookstores, and a lack of leadership.

The shuttering of the company means 10,700 will be out of a job. 400 here in Ann Arbor will lose their jobs at Borders Headquarters (a place that once had 1,800 workers).

We asked our Facebook friends what they will miss when the Borders bookstores are gone.

Lemonade economics

Jul 21, 2011
Amelia Carpenter / Michigan Radio

(Here's a version of the story that aired on Michigan Radio.)

Turns out even lemonade stands aren’t immune to Michigan’s economic recession.

Molly and Lucy Prochaska have been in the lemonade business for the past five years. They sell lemonade, iced tea, and Arnold Palmers (50 cents for a small cup, $1.00 for a large.)  They also sell popsicles at fifty cents a piece, which is a new addition this year.

They’ve got a cash register, lots of signage. They're also located close to downtown, so there's a good amount of foot traffic from the Ann Arbor Art Fairs.

But 12-year old Molly says business just isn’t what it used to be:

MOLLY PROCHASKA: The first year was really nice, we got lots of money. But after that, when the economy started to go down we didn’t get as much money.

JENNIFER GUERRA: You think it had to do with the economy?

MOLLY PROCHASKA: Probably. People didn’t want to spend as much. They wanted to save their money.

The girls made around $200 their first year. Molly is saving up her lemonade money to buy a camera; Lucy wants to buy an iPad.

But it's not all doom and gloom at the lemonade stand. Molly says business this year is picking up a bit. She says that could mean one of two things: the economy's picking up, or more people are coming because it's "super hot out."

Also, side note, it looks like Molly and Lucy might have to step up their game now that a new lemonade stand popped up a block away. Not only is the new stand charging less for a cup, but they also use fresh lemons.

Ricardo Giaviti / Flickr

WASHINGTON (AP) - The Treasury Department says it has ended its investment in Chrysler LLC after Italian automaker Fiat SpA purchased the U.S. government's remaining holdings in the auto company.

Fiat paid $560 million to the Treasury Department for the government's 98,000 shares. Fiat has run the company since it emerged from bankruptcy protection in June 2009.

Treasury provided a total of $12.5 billion to Chrysler and its financing arm after the recession hampered auto sales and sent Chrysler and General Motors to the brink of collapse. The funds came from the government's $700 billion bank bailout fund.

Since then, $11.2 billion of the assistance has been repaid, Treasury says. Chrysler repaid $5.1 billion in loans from the government in May. Treasury said it likely won't recover the remaining $1.3 billion.

thewildinvestor.com

Whirlpool is reporting a loss in its second quarter. The company says the loss is the result of a legal settlement. The company announced in June that it would pay $603 million to Brazilian bank Banco Safra S.A. to settle the 20 year old dispute.

From the Associated Press:

Whirlpool Corp. is reporting a second-quarter loss largely due to the settlement of Brazilian collection dispute, but its adjusted results topped Wall Street's expectations.

But the world's biggest appliance company said Thursday that it now expects full-year earnings at the low end of its previously reported range and shares dipped 3 percent in premarket trading.

Whirlpool lost $161 million, or $2.10 per share in the past quarter. That compares with a profit of $205 million, or $2.64 per share, a year ago. Excluding the settlement and other items, adjusted earnings were $2.76 per share. Revenue climbed 4 percent to $4.73 billion from $4.53 billion. Analysts expected earnings of $2.73 per share on revenue of $4.74 billion.

Whirlpool, whose other brands include Maytag and Kitchenaid, is based in Benton Harbor. Mich.

Growing the region's clean economy

Jul 21, 2011
Photo courtesy of Geoff Horst

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.

The Lansing-based polling firm, EPIC-MRA, released a couple of polls today. 600 "likely Michigan voters" responded for each one (margin of error is +/- 4%)

One poll indicates that more voters are optimistic about the economy. From the Associated Press:

40%...  say the state economy has bottomed out and is starting to improve, while a third say it has
bottomed out but isn't getting any better...

In May 2010, when Michigan's jobless rate was 2.5 percentage points higher than now, only 35% said the economy was starting to improve.

The other polls show Senator Debbie Stabenow's (D-MI) and Governor Rick Snyder's (R-MI) negative job ratings.

57% gave Governor Snyder a negative job rating.

51% gave Senator Stabenow a negative job rating.

From the Associated Press:

The poll released Tuesday says 38 percent gave the Democrat a positive job rating and 11 percent were undecided...

Stabenow's favorability rating was at 47 percent. Her unfavorable rating was 35 percent and 17 percent were undecided.

Senator Stabenow faces re-election in 2012. So far, the candidates who have lined up for the Republican nomination to challenge her are:

  • John McCulloch - Oakland County Water Resources Commissioner
  • Randy Hekman - Former West Michigan judge Randy Hekman
  • Peter Konetchy - northern Michigan businessman
  • Chad Dewey - a businessman who is a "self-described constitutional conservative."

Former Former Republican Congressman and gubernatorial candidate, Pete Hoekstra, is reconsidering his decision not to run against Senator Stabenow.

WASHINGTON (AP) - Counties in the Midwest and South that have a high number of autoworkers have seen a jump in economic stress levels, according to an Associated Press monthly analysis.

But Midwestern states also have seen the largest decreases in economic stress since the recession ended. That's primarily because of growth in manufacturing. Ohio has added 7,600 factory jobs in the past year.

The AP's Stress index calculates a score from 1 to 100 based on unemployment, foreclosure and bankruptcy rates. A higher score signifies more economic stress.

Under a rough rule of thumb, a county is considered stressed when its score exceeds 11. By that standard, about a quarter of the nation's 3,141 counties were stressed in May, roughly the same as in April.

Scott Schopieray / Flickr

Some grocery store shelves are being filled with more Michigan-made products. Grand Rapids based Spartan Stores recently expanded its Michigan’s Best program by stocking more Michigan products in more stores. Spartan Stores started the Michigan’s Best campaign in 2009 to stimulate local businesses and farms. Alan Hartline is an executive at Spartan Stores. He says the campaign is great for Michigan.

whitehouse.gov

Negotiations over the debt ceiling and federal budget continue in Washington D. C. 

Here in Michigan the still fragile state economy seems to be slowly improving with a recent uptick in job growth. But if the nation defaults on its debt, how is Michigan affected? Economically and politically?

In our weekly political conversation we talk with Susan Demas, political analyst for Michigan Information and Research Service and Ken Sikkema, former Senate Majority Leader and senior policy fellow for Public Sector Consultants.

Google Maps and the U.S. Department of Energy

One group in west Michigan wants to encourage more people to buy electric cars by building more charging stations.

From the Grand Rapids Press:

The West Michigan Strategic Alliance is proposing the development of at least 4,000 charging stations across eight counties. Alliance President Greg Northrup is seeking approval from county boards in Kent, Ottawa and Muskegon for the project, which would be financed through the sale of bonds and be repaid over a 10-year period.

“We’ve got $3 billion invested in battery projects in West Michigan,” Northrup said. “Why shouldn’t we have the infrastructure to go with it?”

So those are 4,000 proposed electric charging stations.

How can you find charging stations that are online now?

Google and the U.S. Department of Energy to the rescue. You can enter your address on the DOE's website to find alternative fueling stations near you.

Fast Company says "eventually, this Google/DOE partnership will serve as the primary EV charging station data source for GPS and mapping systems (like the one that may be in your car already)."

NEW YORK (AP) Pfizer says it may sell its animal health and nutrition business in the next two years so it can focus on expanding its low-cost pharmaceuticals unit.

Pfizer says it will also consider transactions including spinoffs and may pursue different strategies for each business. It said any transactions could take one to two years to complete.

The businesses brought Pfizer Inc. $5.5 billion in revenue in 2010, about 8 percent of its total. The Animal Health unit makes vaccines, medicines, diagnostics and other items to prevent and treat diseases in livestock and pets, and the nutrition unit makes infant and pediatric products.

The New York drugmaker say it will focus on its established products business, which makes drugs that are off-patent or are losing patent protection.

Pages