Wall Street Journal, May 11 2015 U.S. News: Case of the Vanishing Worker --- Midwestern cities see jobless rates fall in part due to wrong reason: people are leaving by Mark Peters and Ben Leubsdorf
DECATUR, Ill. -- By one key gauge of economic health, this industrial city three hours south of Chicago is well on the way to recovery. Hit hard by the recession, when its unemployment rate topped 14%, Decatur over the past year has seen one of the swiftest declines in joblessness in the country, with the rate dropping to 7% in March from 10.2% a year earlier. But look closer, and this city of 75,000 resembles many communities across the industrial Midwest, where the unemployment rate is falling fast in part because workers are disappearing: moving away, retiring or no longer looking for a job. "In cases like that, the unemployment rate makes things look better than they really are," said Karl Kuykendall, U.S. regional economist at IHS Global Insight. In terms of economic growth, he said, "a decline in population and workforce is devastating." In many parts of the country, and at the national level, falling unemployment appears to truly reflect recent improvement. The Labor Department reported Friday that the U.S. jobless rate ticked down in April to 5.4%, its lowest level in nearly seven years. But the falling rate doesn't tell the full story of a recovery that remains uneven nearly six years after the recession ended. Among the 20 metropolitan areas where unemployment fell by at least 2.7 percentage points in the past year, 16 also saw their workforces shrink over the same period, according to Labor Department data. Half of those were in Michigan or Illinois, including Detroit, Decatur, Flint, Mich., and Rockford, Ill. Most places saw at least some hiring and job creation. In Decatur, though, payrolls fell over the past year due to layoffs, attrition, transfers or other causes. "I think Decatur and [surrounding] Macon County are working very hard, they just need a few breaks," said Michael Carrigan, president of the Illinois AFL-CIO and a former Decatur mayor. Denny Ryder, 47 years old, wasn't looking to leave Decatur, where he was born and raised. But he was laid off from a Caterpillar Inc. plant here in late 2013 as the heavy-equipment maker faced a slowdown in demand from mining companies. So Mr. Ryder and his wife relocated to Winston-Salem, N.C., last year where he found work at a Caterpillar contractor. While Mr. Ryder was confident he could find a job in Decatur, he didn't feel it would match the wages and benefits at Caterpillar, where he worked for 19 years. "I probably could have lost a lot of money and found a job in Decatur," said Mr. Ryder, who has taken to life in North Carolina, from enjoying the hills to swimming in the ocean for the first time. The fitful recovery in Decatur has laid bare challenges building for decades in many places in the Midwest and Northeast. Populations are shrinking, and the workforce is getting older. A historical reliance on manufacturing has hurt aging industrial cities as the U.S. economy continues its shift to service jobs. And the recession expanded the share of the working-age population who don't have a job and aren't looking for one. In the Decatur area, the Labor Department's rough estimates show falling unemployment, a shrinking labor force and declining nonfarm payrolls. But the data don't explain why the workforce is smaller and where the unemployed are going. There are clues, such as the lunch crowd at the Good Samaritan Inn, a soup kitchen where the Rev. Stacey Brohard is executive director. He said many people lack skills or face other barriers to jobs and have given up on finding work. The recession only increased their ranks, he said. People are moving out, government figures show. The Decatur area's population fell 2.2% from 2010 to 2014, including a 1% drop between 2013 and 2014 that was one of the sharpest among all metro areas, according to Census Bureau estimates. Kelly Hazenfield and her 10-year-old son moved from Decatur to Chicago's outer suburbs a year and a half ago. She saw a work opportunity not available here to help open a new hospital for Centegra Health System, becoming its director of strategic marketing and communications. There also was the allure of being close to one of the nation's largest cities. "It was very hard" to make the move, the Decatur native said. "My parents are there; my 93-year-old grandmother is there." Decatur's population skews older -- the metro area's median age was 39.7 in 2013, compared with 37.5 for the U.S. as a whole. Some older workers were laid off or took early retirement during the downturn but remained in the labor force, looking for work. Now, with the stock market near all-time highs, their portfolios look healthier and they feel more comfortable retiring for good, said Ron Payne, a labor market economist at the Illinois Department of Employment Security. Decatur faces a dual challenge: getting older workers retrained so they can extend their careers, and keeping younger workers from moving away. Richland Community College increasingly is concentrating on people over 50 years old -- many of whom havent been in a classroom in decades. City officials are courting young professionals with moves such as banning trucks from downtown, promoting outdoor dining and developing recreational opportunities around Lake Decatur. But Decatur isn't moving away from its brawny roots, which gave birth to the NFL's Chicago Bears before they moved north -- the team started life as the Decatur Staleys in 1920, named after A.E. Staley Manufacturing Co., a local maker of cornstarch. Since the recession, the city has built a new water tower, replaced sewer lines and cut the ribbon on a new freight-rail terminal -- all with the goal of retaining industrial employers and attracting new ones. "First, it's recovery, which is the phase we're probably still in right now, but expansion eventually follows that," said Ryan McCrady, president of city's economic-development corporation. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
