Rust Belt Ripples

I apologize for the spate of blog releases and lack of original content over the past week. Richard Herman's posts (latest here) about attracting more international migrants to the Rust Belt region received some media attention. An enterprising law firm in Michigan picked up on the policy suggestions. They see the EB-5 visa as an existing opportunity that remains relatively under-exploited.

A push for mega-regional policies among the Great Lakes states is beginning to take shape, the Brookings Institution leading the way:

"We could afford to go our own way in the past because we had the wealth and the jobs and the muscle," says Ed Wolking, executive vice president of the Detroit Regional Chamber.

But those days are gone.

That's why the Detroit chamber offered up an idea last year to the Brookings Institution think tank, which had issued a report in late 2006 called "The Vital Center," on economic challenges facing the Great Lakes region.

What if we brought business leaders from around the Midwest together, the chamber suggested, for a meeting to discuss promising avenues for collaboration among states? And maybe we could also agree on a few key policy needs that we can hammer home to 2008 U.S. presidential candidates and anyone else seeking votes and campaign money from our region.

I've been following this story since the release of the Brookings report and I can't say that the initiative is receiving much attention in Pittsburgh. In fact, I haven't seen much press about it outside of Michigan. The grassroots efforts of GLUE look to be more promising. But I shouldn't be too cynical about what I perceive to be urban industrial politics as usual. Some fresh voices are coming to the fore and there are a few new leaders.

What still surprises me is the lack of an accurate appraisal of the state of the Rust Belt union. Hyperbole seems to be the default rhetoric. Meanwhile, the economic outlook is a bit more rosy if you are located in Toronto:

Kennametal, headquartered in Latrobe, Pa., is a classic example of what's happened to U.S. manufacturing more generally over the past two decades. It's producing a lot more with fewer workers. Since 2002, Kennametal's global sales have soared more than 70 per cent. And yet its work force has grown a meagre 16 per cent.

In the past five years alone, the state of Ohio has lost 185,000 manufacturing jobs - most of those in the state's traditional industries of rubber, plastics, electrical equipment, fabricated metal, autos and steel.

And yet, Ohio's manufacturing output is 6-per-cent higher than it was in 1992. Since 2002, exports of manufactured goods have grown at a rate of nearly 10 per cent a year.

Business is booming, but job creation still lags. This isn't your daddy's industrial labor market and Kennametal is doing much more with less employees. But globalization remains the convenient scapegoat. Thus, I'm skeptical that the Great Lakes mega-region will get its policy priorities in the right order. The temptation to blame someone or something else is too strong and too easy.