Tag Archives: michigan

Good News for Industrial Sector, Rust Belt

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Joel Kotkin says manufacturing – and the auto industry – are making a comeback. The author and geographer details new impressive numbers for Indiana and Midwest industrial cities. Kotkin will offer these findings and much more to the Indiana Vision 2025 task force and Indiana Chamber board members during a work session next week. Forbes reports:

Manufacturing has grown consistently over the past 21 months, and now, for the first time in years, according to data mined by Pepperdine University’s Michael Shires, manufacturing regions are beginning to move up on our list of best cities for jobs.

The fastest-growing industrial areas include four long-suffering Rust Belt cities Anderson, Ind. (No. 4), Youngstown, Ohio (No. 5), Lansing, Mich. (No. 9) and Elkhart-Goshen, Ind. (No. 10). The growth in these and other industrial areas influenced, often dramatically, their overall job rankings. Elkhart, for example, rose 137 places, on our best cities for jobs list; and Lansing moved up 155. Other industrial areas showing huge gains include Niles-Benton Harbor, Mich., up 242 places, Holland-Grand Haven, Mich., (up 172),  Grand Rapids, Mich., (up 167)   Kokomo Ind., (up 177) ; and Sandusky, Ohio, (up 128).

Industrial growth also affected some of the largest metros, whose economies in other areas, such as business services, often depend on customers from the industrial sector. Economist Hank Robison, co-founder of the forecasting firm EMSI, points out that manufacturing jobs — along with those in the information sector — are unique in creating high levels of value and jobs across other sectors in the economy.  They constitute a foundation upon which other sectors, like retail and government, depend on.

Moving Trucks are Headed To …

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Sometimes the unscientific surveys provide the most interesting results. Why? Because you know not to fully accept what you find, but in more cases than not you also realize the conclusions are indicative of a bigger pattern or trend.

That’s one way to look at the annual migration results from United Van Lines. For 2010, it was based on more than 146,000 household moves between the 48 continental states.

A quick look at some of the findings:

  • Michigan was dethroned as the "outbound" (more than 55% of the moves being out of state) victim for the first time in five years by New Jersey. Not to worry, our northern neighbors were second in numbers fleeing for greener pastures.
  • Of the nine in the outbound category, Midwesterners Ohio, Illinois and Pennsylvania were also included.
  • The five "inbound" winners (at least 55% of the moves coming into the state) were, in order, the District of Columbia, Oregon (a top destination for 23 years of the 34-year report), North Carolina, Idaho and South Carolina.
  • Indiana, you ask? Among the 35 in the "balanced" category. But the 2,474 shipments out of the state compared to 2,076 inbound put it at the bottom of that category — 54.4% outbound.

But hey, we’ve got a lot of things going for us here in the Hoosier state. And we didn’t jack up our income taxes by 67% this week like our friends to the west. Just one of the many jokes is that action by the legislature after a contentious battle had to be "Ill nois(e)" to economic development officials and many others.

And it just might be enough to move to Illinois to the bottom of the moving list in 2011. 

National Shake-Up Brings ‘Fresh’ Faces to Government

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Indiana’s 24 new members of the General Assembly make for an unusually large freshman class. But how about these House newcomer totals: 60 of 110 total in Michigan; 75 of 163 in Missouri; and 128 of 400 in New Hampshire? What will be the impact? Stateline reports:

If you see someone wandering around lost in the Michigan Capitol when the state House and Senate convene next month, there’s a good chance it will be a legislator. The 110-member House of Representatives will include 60 newcomers — all of whom will arrive in Lansing without any state legislative experience whatsoever.

The huge turnover in the Michigan House — the result not only of an unhappy electorate, but also of strict term limits that forced out 34 incumbents — has many political observers wondering what will happen when so many novices suddenly find themselves with so much power over the direction of state policy.

“It’s almost impossible to forecast,” says Craig Ruff, a Lansing political consultant who estimates more than 90 percent of all members of the Michigan House will have no more than two years on the job. At the very least, Ruff says, it could make for some interesting political theater, even within the newly elected Republican majority, as first-term members may not wish to be shepherded by their own legislative leaders.

“It’s much harder to enforce discipline when people aren’t accustomed to being disciplined,” Ruff says, noting that some lawmakers may be inclined to ask a simple question of their leaders: “I’ve got one vote. You’ve got one vote. What makes you so supreme?”

Similar scenarios may emerge in other capitols. The 2010 election cycle is frequently noted for its historic turnover in governor’s mansions, with 28 new chief executives about to take office in the coming weeks. But because of term limits, retirements and the ouster of hundreds of incumbents nationwide this year, there will also be a huge number of state legislators coming to the job for the first time. In many states, including Maryland, Nevada and Maine, incoming freshmen have already taken crash courses on everything ranging from the basics of legislative procedure to the right way to speak with reporters.

Nationwide, the turnover in state legislatures will be about 25 percent, a number that Tim Storey, an elections analyst with the National Conference of State Legislatures, describes as an “extraordinarily high” number in a non-redistricting year.

In several states, as in Michigan, first-time legislators will comprise roughly half of all members in one or both chambers, bringing a new and unpredictable dynamic to statehouses where clout and experience often rule. In Arkansas, for example, where term limits ensured plenty of turnover even before ballots were cast, 44 of 100 members of the state House will be new next year, with no state-level legislative experience under their belts.

In next-door Missouri, 75 of 163 House members will be state legislative novices. So large is the class of “true freshman” GOP representatives in the Missouri House that it outnumbers the chamber’s entire Democratic caucus, as well as the number of returning Republicans.

In New Hampshire, which does not have term limits, the 400-member House of Representatives — the largest state legislative chamber in the nation — will have 128 fresh faces next year, all of them new to the business of state lawmaking.

Chamber Director’s Resignation Stems from Twitter Feed

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When I read the headline for this story, I initially assumed this director probably had too much to drink and spouted off a personal opinion about someone or something (as many of us do from time to time) on her Chamber’s Twitter feed, thus leading to her departure. But reading her actual Tweets illustrates how fine the line is between what should and shouldn’t go out via a business’ social media program. Granted, her posts might be construed as a bit too informal, but nothing here seems all that egregious. Here is an excerpt from the article at AnnArbor.com, and the site itself shows a few examples of the Twitter feed in question:

The rules that govern the social media world are constantly evolving, but an episode that led to the resignation of the Dexter Area Chamber of Commerce’s executive director shows that ignorance about that evolution is risky.

Mary Ann Bell Falzon resigned last week after a column in a community newspaper questioned the content of her Twitter account, which she was using to promote local businesses through the chamber’s “Doing Dexter” campaign.

Falzon’s mistakes serve as a lesson for the business community, public officials and others unsure about how to approach social media.

“Through all of this whole Twitter mess, I was doing what I set out to do with Doing Dexter,” she told AnnArbor.com. “What I didn’t do well was tweet about it.”

The first lesson for business people: Make sure you understand the tool before you start using it. Falzon acknowledged that she erred by launching a Twitter account without understanding the social media tool, which allows users to send 140-character updates to users who choose to follow their accounts or view the Web site version of their account.

Falzon said her voluntary resignation was “mostly” connected to the criticism over her Twitter account, although she said the chamber board never confronted her about it. The chamber board, for its part, ousted the board member in charge of overseeing Falzon and released a statement acknowledging that the Doing Dexter campaign had “gone with too little supervision."

Falzon launched the Twitter account on July 8 specifically to chronicle her efforts to shop locally and eat locally through the Doing Dexter campaign, which started Aug. 1 and will last through Oct. 1.

Detroit: The Good & Possible Bad of Health Care Investments

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Can medicine replace motors as the economic engine in the Detroit metropolitan area? Not so fast, says the Center for Studying Health System Change, which recognizes possibilities but warns of potential dangers in high levels of health care capital investment. The Center for Studying Health System Change reports:

Despite a weak economic outlook, Detroit area hospital systems plan to spend more than $1.3 billion in the coming years on capital improvements, leading some to hope that medical care can help revitalize the area’s economy, according to a new Community Report released today by the Center for Studying Health System Change (HSC) and the nonpartisan, nonprofit National Institute for Health Care Reform (NIHCR).

Overlooked in the enthusiasm is the possibility that significant expansion of the community’s health care infrastructure may lead to higher health care costs if the hospital systems can’t attract new patients from outside the Detroit metropolitan area, according to the report.

“If all the spending on capital improvements leads to increased use of high-tech services or additional costs from excess capacity, the end result might be higher private health insurance premiums, which could negatively impact employers and employees,” said Paul B. Ginsburg, Ph.D., HSC president and NICHR director of research.

The challenges facing the Detroit metropolitan area’s health care system are intertwined with the challenges facing the community as a whole, including a declining and aging population; major suburban/urban differences in income, employment, health insurance coverage, and health status; and a shrinking industrial base, according to the report.

In the Cards: Ball State Thrives with Smartphone Technology

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Indiana is truly blessed to have the many esteemed public institutions of higher learning that it does. Thanks to efforts from Indiana schools, men have walked on the moon, more people now survive cancer (ask Lance Armstrong) and our food is grown incredibly efficiently. But lest we not forget, the fine folks in Muncie are considered a national leader in the world of technology. Here is just one example:

Under the direction of computer science professor Paul Gestwicki students spent an entire semester developing several dozens applications for Google Android. The new smart phone operating system was launched in 2009 and quickly is proving popular with consumers as potential rival to the BlackBerry and the iPhone.

When they were done in fall 2009, 18 students with no computer programming experience had created a bird-watching program, several games, an English-to-Spanish tutoring system, math flashcards, and a Dungeons and Dragons character generator with Web-based database storage capability.

"This was an incredible experience because it opened new doors and new ways of thinking for all of us," says Travis Cawthorn, ’12, of Frankton, Indiana, majoring in accounting. "I created a game that should be fun to play with for hours. Let’s be honest, many students my age use smart phones for entertainment."

The class was part of an experimental partnership between Google and several technology-centered universities including Ball State, Harvard, Massachusetts Institute of Technology (MIT), University of Colorado, and University of Michigan.

Google provided the class with 20 G1 developer phones loaded with Google’s Android operating system and gave them access to the new App Inventor for Android, which makes it possible for users with no programming experience to create mobile applications.

And stay tuned for our September/October edition of BizVoice for my article on Ball State’s WiMAX test bed. The school’s work is helping America’s top companies perfect their wireless broadband technologies and rendering Ball State an archetype in the field.

C’mon Congress: UI Fix Won’t Happen by Itself

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There is a reason the Indiana Chamber advocated in the 2010 legislative session for a two-year delay in the state’s unemployment insurance tax increase. That’s because two major things needs to happen — and both will take time. One is a comprehensive look at the state system; that means reviewing eligibility and benefit levels in addition to simply raising the tab for employers. Second is that Congress needs to craft a national solution to the billions that are being borrowed by numerous states, ones that do not have the capability to pay back the loans or the interest.

Indiana lawmakers did grant a one-year delay, saving employee jobs as employers could ill afford the $400 million tax increase. Little progress, however, has been made on the two elements to the long-term solution. Thus, another delay will certainly be on the agenda come January.

Stateline.org, in a story yesterday, details the dollars involved nationally and the need for Congress to act.

More than 30 states have borrowed nearly $40 billion. Some of the current totals:

  • California, $7.5 billion
  • Michigan, $3.8 billion
  • New York, $3.2 billion
  • Pennsylvania, $3.0 billion
  • North Carolina, $2.4 billion
  • Ohio, $2.3 billion
  • Illinois, $2.2 billion
  • Others topping $1 billion are Indiana ($1.7), New Jersey, Florida, Texas and Wisconsin

According to the story:

It adds up to more borrowing for the programs than ever before, and it’s likely to balloon by year’s end. If interest rates projected at around 4 to 5 percent were added to that total amount, it would force states to pay an additional $1.6 to $2 billion currently unaccounted for. And that’s not the only additional fee that could be imposed. For every year the loans aren’t paid back, employers will lose at least 0.3 percent from the federal credit. That could mean that an employer’s tax rate of 1.1 percent would inflate to 1.4 percent.

Doug Holmes, the president of UWC Strategies, a business-oriented consulting firm, says 25 of the 31 states borrowing federal dollars will be unable to pay off their loans in time unless Congress acts soon to revise the rules. But this may be an inopportune time for Congress to try to renew the interest-rate moratorium, says Mike Katz, of the National Association of State Workforce Agencies (NASWA). Nothing is likely to be considered before the election, and if Republicans make substantial gains, as is expected, a new stimulus is very unlikely.

Michigan, a state that has a federal unemployment insurance debt close to $4 billion, provides a striking example. During the last recession in 2002, state lawmakers raised weekly benefits by about 20 percent. Policies like this led the state to unemployment insurance insolvency in 2006, three years before the surge of borrowing among other states began. Because of this, Michigan has already felt the federal penalties that most states are now fearing.

The closest that states have ever come to this level of borrowing happened in 1983, when the recessions of the mid-1970s and early 1980s added up to a collective unemployment insurance debt of $28 billion (the number is adjusted to 2007 dollars). During the first few years of the 1980s, Congress passed a series of reforms that aided the ability of states to pay off the loans. 

By 1990, all the outstanding debt was paid off, but much of that was aided by a prosperous economic rebound throughout the mid- to late ’80s. “If we’re going to recover from this period, we need to get lucky,” says NASWA Executive Director Rich Hobbie. “That is a steep hill to climb.”

Choose the Proper Course on Carp

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Asian carp are a serious threat to the waterways of the Great Lakes, but the solution to their potential invasion must not create additional economic harm. 

The carp, which can weigh up to 100 pounds, are predators. They would threaten numerous fish species native to the area, the broader environmental balance and even boaters and tourists striving to enjoy recreational opportunities. Once positive contributors to helping remove algae from Southern fish ponds, they are now regarded as among the most dangerous of invasive species. 

One misguided attempt to deal with the risk is to close the navigational locks in the Chicago area. This would disrupt hundreds of millions of dollars’ worth of shipping and essentially sever Northwest Indiana’s crucial water-based commerce with the rest of the world. 

Federal investment, in the form of additional electric barriers, would prove more effective in keeping the carp out of the Great Lakes while still allowing Indiana and the other states in the region to maintain the shipping prowess that benefits so many companies and their employees.

Washington is paying attention – as it should. The barrier plan emerged from a White House-led summit. Indiana and its neighbors must now work together to support this prudent alternative. The threat is real; a radical closure of shipping lanes and economic opportunity, however, is not the answer.

A new organization called Unlock Our Jobs has formed to tackle this issue, offering alternative options while keeping our waterways open for business. Its web site can also help you quantify the economic impact of river traffic and lock closures on your state.

Michigan Candidate Taking Heat for Advocating Use of Local Workers, but Using Out-of-State Firm

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Michigan Gubernatorial candidate Andy Dillon got some flack from CQ Politics over the fact that he’s advocating the hiring of local workers, but then using an out-of-state creative agency (Obama advisor David Axelrod’s, no less) to spread his message.

Reminds me of the Dan Burton flap during the 2010 primary, in which he was raked over the coals for using out-of-state actors in an ad.

Are these on par with each other, or is one worse? Or is it just politics as usual, and neither is worth being surprised about?

Former Michigan Governor a Fan of Indiana Manufacturing

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John Engler, a former governor of Michigan, spent much of his June 3 Economic Club of Indiana presentation doling out praise – for Indiana rather than his home state – when it comes to “getting it right” on manufacturing. Engler, current president of the National Association of Manufacturers, feels that Gov. Daniels and others in Indiana government have helped create an environment in which manufacturing can thrive. 

“As I go around the country and look at (manufacturing) data, Indiana stands out. Indiana is intelligent in manufacturing,” Engler said.

Engler noted business development tax incentives and the commitment to developing a skilled workforce as two areas in which Indiana is leading the way.  
  
Global competition

“In 1982, unemployment was 17%, but we could recover then without competition from a unified Europe or growing China. We have to be more strategic,” Engler explains.

Engler reminded the audience that the U.S. is still the largest manufacturing economy in the world but warns that any economic recovery will lag without a comprehensive manufacturing strategy in place at the federal level.

“It’s no longer governor vs. governor but governor vs. national leader,” Engler offered, adding, “The federal government has a role because states can’t compete when their incentives are dwarfed by the federal cost of taxes and regulations.”

Engler expressed particular disappointment with the recent expiration of a federal research and development tax credit – noting that the U.S. is now the only major economy in the world without a research and development incentive. He also mentioned the new 2.3% federal excise tax on medical device makers – a major part of Indiana’s economy – as an unnecessary burden.

“I don’t know of another country in the world that takes a leading sector (medical device manufacturing) and says, ‘let’s hit them with $20 billion in new taxes.’”

Education leading the way

Regulatory and tax policy changes may improve the U.S. business climate but education, according to Engler, is key to another of his stated goals – for the U.S. to become the best place in the world to conduct research and develop new products. He highlighted the industry’s need for engineers, computer programmers and other highly skilled professionals. Engler complimented Ivy Tech Community College in particular on its efforts to produce an advanced manufacturing workforce for the future.

Engler believes we can dramatically improve education on a national basis by building on currently successful initiatives – no matter how small or regional they may seem.

“We have solved every education problem in America. Every problem has been solved in some area. We are just terrible at replicating successful programs,” Engler explains. 

Engler’s luncheon presentation in Fort Wayne was the first of three stops on the Economic Club’s traveling summer series. The summer series continues with John Norquist, president & CEO of Congress for the New Urbanism, speaking in Evansville on July 15. Learn more.