Can Stimulus help turn the tide? Job losses, plant closes and budget cuts running amuck

The Kalamazoo Gazette reported a feature on the joblessness in Southwest Michigan this weekend. In Kalamazoo, the unemployment rate of 9.7% is up 70% from last year.

The Gazette interviewed a cross-section of the community and found many poignant stories that brought the stark numbers to life. Not surprisingly, many we talked with were reluctant to share publicly their personal tales.

A single mother who previously earned more than $60,000 a year moved to Kalamazoo from out of state to care for a sick parent. She left behind more than a job -- she lost her home, her car, and some of her pride. She now lives with that parent, is supported by that parent and has only found occasional part-time employment.

Then there's the married father of two who was downsized out of his career after 32 years. A family member offered him a job out of state, but he can't sell his home for a large-enough sum to cover the mortgage. And not only does he feel stuck, his wife's job could be on the chopping block. Without her job, the family loses its health insurance, a devastating possibility considering one of their daughters is ill and recently moved back home.

These reports are all to familiar for many of us who have felt the job losses among our friends and families first hand. In addition, a plant in South Haven will close sometime this month leading to the loss of some 279 jobs. This is a significant loss considering South Haven only has 1,070 industrial jobs total, meaning it only 2/3 of those jobs will remain after the closing. Though local officials are working to diversify the community, it will take some time to restore losses this large.

Meanwhile, teachers who cannot afford to retire are disrupting school budgets. Sixteen teachers are retiring from Kalamazoo Public Schools, less than half the usual number. A state buyout planned that failed early this month has limited financial flexibility of those wanting to retire. This adds to budget woes already faced by some schools - Portage schools are now poised to cut teachers, buses and custodians in an effort to balance their budget.

There is some hope on the horizon as Joe Biden's visit to the region announced a new federal bond program that could inject $102 million into Southwest Michigan's economy. The plan could allow government and private businesses in Michigan to sell $2 billion in bonds. Kalamazoo County could get $46.1 million; Allegan County, $18.9 million; Cass County, $9.9 million; St. Joseph County, $14.0 million; and Van Buren County, $13.5 million, according to the U.S. Treasury.

The program has two types of bonds. Recovery Zone Facility Bonds give private businesses a low-cost way to finance capital projects such as building a hotel or manufacturing plant, according to the U.S. Treasury Department. Recovery Zone Economic Development Bonds allow state and local governments to finance projects such as infrastructure improvements or job-training and educational programs.

Good news to give support to development in SW Michigan that has been halted if not reduced over this economic downscale. Regardless, the PRI has its work cut out for it in the coming months.

An in depth look at the recession

On Tuesday the New York Times asked the question: What does the worst recession in a decade look like?

Conveniently enough, they provided a map of unemployment and job losses over the last year. Beyond the map, here are some highlights of the article that accompanies it. Some conclusions were:

• The recession is deep and broad with every state in the country, with the exception of a band stretching from the Dakotas down to Texas, is now shedding jobs at a rapid pace.

• Unlike the last two recessions — earlier this decade and in the early 1990s — this one is causing much more job loss among the less educated than among college graduates.
• The brunt of the layoffs in this recession is falling on construction workers, hotel workers, retail workers and others without a four-year degree.
• The Great Recession of 2008 (and beyond) is hurting men more than women.
• It is hurting homeowners and investors more than renters or retirees who rely on Social Security checks.
• It is hurting Latinos more than any other ethnic group.
• Though the largest pains have been suffered by the most vulnerable workers, In the long run it may end up afflicting the comfortable more than the afflicted
  

And in opinion the most disturbing fact:

• Recessions often tend to increase inequality because lower-income workers are concentrated in boom-and-bust industries.

To briefly summarize what is happening:

Our economy just went through a 50 year post war period of unheard expansion. What highlighted this expansion was a booming housing industry, a financial sector that supported the world, and until the past several decades we were a manufacturing powerhouse.

These economic strengths created one of the largest middle classes who had wide access to higher education. Reasonable class equality prevailed for many because of a combination of a strong manufacturing core and a educational system that created a large white collar workforce.

With a manufacturing core in shambles, it is important that we utilize initiatives to give low-income persons a better chance for higher education. Coupled with that, we must create incentives to re-establish manufacturing locally in the United States.

The skilled trades are suffering unheard amounts of unemployment and may NEVER recover to support the labor force they once employed. We are in a time of a shifting economy, and it is important we create pathways that transition this work force to new productive trades, whether it be gaining more education or accessing a new trade such as alternative energy.

We must act now to use the resources we can or risk a larger inequality. The suffering of the base of our economy - the workers that provide us the basic products and services we need - will lead to a decreased equity for all American consumers. In a time where our country struggles to fill other needs such as energy and healthcare, it is something we simply cannot risk.