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If you think about it, class is a tricky word. What does it even mean? How do you define it?

Michigan Radio reporters and producers take a look at how social class impacts our lives - from the way we plan our cities and neighborhoods, to the way we’re treated in a courtroom.

We also hear from folks around the state as they share their thoughts on class.

Part 1

This idea of class – class warfare, class resentment. It’s everywhere. And yet, how are we defining class?

The nation's road to economic recovery will be a marathon, not a sprint. That's according to an economic forecast released today from the University of Michigan's Research Seminar in Quantitative Economics.

The economists write the U.S. economy has been battered by an oil price spike this past spring, the Japanese earthquake, and the European debt crisis.

Despite that, they say the chances of a double-dip recession are lessening:

From the report:

Economic news has improved a bit this fall, lessening the chances of a double dip. Output growth rebounded in the third quarter to register a 2.5 percent pace. Job gains have picked up a notch, averaging 117,000 since midyear. Consumer sentiment has reclaimed part of the ground lost since May. The economy remains vulnerable, however, as the main problems that have plagued this recovery persist.

The Detroit Free Press quoted U-M economist Joan Crary about the slow addition of jobs to the U.S. economy:

On the positive side, the U.S. economy added 700,000 jobs last year and 1.5 million this year, and the U-M economists predicted that the nation will add nearly 4 million jobs over the next two years.

But that will be enough to bring the unemployment rate down only moderately, from its current national rate around 9% to 8.8% in late 2012 and 8.5% in late 2013.

"The unemployment rate begins to creep down but remains uncomfortably high even at the end of 2013— 4½ years after the official end of the recession," Crary said.

In their report, the U-M economists noted the potential impact of a political stalemate in Washington D.C.:

In the current political environment, it also seems unlikely that Congress will pass any new stimulus measures. We have assumed the payroll tax holiday and investment tax incentives will be held over for another year, but neither of those extensions is a sure thing. We may well end up with a fiscal policy that doesn’t address either our short- or long-term problems.

The group is expected to put out a report on Michigan's economy tomorrow.

How does an economist define 'class'?

Nov 14, 2011
United States Census Bureau / Wikipedia

The issue of class has been in the news a lot lately. From the “Occupy Wall Street Movement” which has snowballed across the country, to “class warfare” accusations coming out of Washington, D.C.

We’ve also heard recent reports that show the nation’s middle class is shrinking while the top earners’ salaries have skyrocketed.

Over the next week and a half, Michigan Radio will explore this idea of “social class” and how it impacts our lives.

Lester Graham / Michigan Radio

LANSING, Mich. (AP) - Democrats in the Michigan House are promoting legislation they say is designed to help small businesses hire more workers.

One measure detailed by Democrats on Monday would provide tax credits of up to $4,000 per person for small businesses that hire unemployed workers. The tax credits would be largest for hiring military veterans who have been jobless for a long time.

Other bills are aimed at developing a pool of money to loan to small businesses. The money would come through investments of a small percentage of state trust funds with Michigan credit unions and community banks, which in turn would make loans available to small businesses.

Democrats are in the minority in the House. The legislation could face an uphill climb to gain traction in the Republican-led chamber.

Flickr/jcarter

Michigan could soon expand the lineup of legal fireworks that consumers can buy without special permits.

The state Legislature has approved measures that would allow some consumer fireworks such as firecrackers, bottle rockets and Roman candles to legally be sold in the state. Governor Snyder likely will sign the bill in time for it to become law in 2012.

Cars, agriculture, tourism, it’s all fair game for people who want Michigan to tap into the Chinese market.

But what does that really mean and who really stands to benefit?

Governor Rick Snyder recently led a Michigan delegation to China.

He says strong economic ties between Michigan and what is now the world’s fastest growing economy are essential to Michigan’s economic growth.

Part 1

user brother o'mara / Flickr

Detroit Mayor Bing says city might need emergency manager

In an interview with the Detroit News, Mayor Bing said the city is facing a coming budget crises, and if it comes down to the city being run by an emergency manager, he'd consider the job.

More from the Detroit News:

Mayor Dave Bing on Wednesday said Detroit is quickly running out of cash and may require the intervention of an emergency manager, a role he is seriously considering if the governor asks.

The mayor, in an interview Wednesday, said he is troubled by a confidential Ernst & Young financial report that shows the city could run out of money by February and the fact that employee unions have not been willing to come to the table to renegotiate their contracts.

Bing said he's "got to have a heart-to-heart" talk with himself because he's already overworked and rarely sees his family, but "tough decisions need to be made."

"I'm giving that serious thought," said Bing, who is more than two years into his first term. "With an emergency manager it gives you, I think, authority and leverage to do some of the things that need to be done.

 Michigan recovery second fastest, but outlook pessimistic  The state is on a path to recovery, but it's not necessarily a rosy path.  The Detroit News reports: 

Michigan's economy is recovering from the recession at the second-fastest pace in the U.S., lifted by reviving carmakers and local manufacturers, according to a new index of state growth.

The home of Motown was topped only by North Dakota, where an oil boom is raising incomes at the nation's quickest rate... [according to] the new Bloomberg Economic Evaluation of States Index...

"In a slow recovery like you have today, it doesn't take all that much growth to stand out," said Mark Vitner, an economist who works for Wells Fargo & Co. in Charlotte, North Carolina.

Michigan Radio's Rina Miller took a look at Michigan's seemingly mixed economic messages. She spoke with Bob Tomarelli, an analyst with IHS who said:

"So while they are getting a nice short-term burst that’s adding to payrolls and creating some jobs, or at least bringing some jobs back, it is not expected to keep up at that pace, and in the long run is actually expected to decline."

Anti-bullying measure passes Senate

The Michigan Senate passed an anti-bullying measure yesterday. More from Laura Weber of the Michigan Public Radio Network:

All school districts in Michigan may soon be required to adopt anti-bullying policies to help protect students from ridicule, humiliation and physical threats.

An anti-bullying bill approved by the state Senate would not, however, protect students from bullying done by teachers, school employees or parents.

The measure also does not protect students from cyber-bullying on home computers, nor does it list the traits or characteristics that are protected from bullying— such as gender, race or sexual orientation.

MLive.com

According to a press release by Booth Newspapers Publisher Dan Gaydou, Booth Newspapers and MLive.com will now operate as one consolidated company, MLive Media Group.

Distribution and administrative operations will move to Advance Central Services Michigan, a newly formed subsidiary company.

The restructuring will most likely mean job cuts as the organization increases its focus on digital content.

From the announcement on MLive.com:

Many of our newspaper employees will have a place in the MLive Media Group and will still work in your local community at the MLive Media Group office. Many others will have a place at Advance Central Services Michigan. While we believe these changes will create growth opportunities for our current employees, the reality is they will also lead to reductions in our work force. We will provide as much notice and consideration to our employees as possible. We’ll strive throughout this process to treat all our employees with the professionalism and respect they deserve.

Gaydou says MLive Media Group will open new offices and hire people to produce content for its online products and its newspapers. Employees affected by the layoffs will be able to apply for those jobs.

Home delivery will be reduced to three days a week for the following newspapers, with daily content available in an online format.

  • The Grand Rapids Press
  • The Kalamazoo Gazette
  • The Muskegon Chronicle
  • The Jackson Citizen Patriot

Other Booth newspapers including the Flint Journal, Saginaw News, Bay City Times, and AnnArbor.com will also move under the MLive Media Group name but delivery changes at those papers are not expected.

John Klein Wilson - Michigan Radio newsroom

The Associated Press reports that an industrial contractor has bought a former General Motors facility in Pontiac with plans to use the 6-acre property for an expansion.

More from a Revitalizing Auto Communities Environmental Response (RACER) Trust press release:

An industrial contracting company has purchased the former GM ACG Penske facility on Oakland Avenue, with plans to expand its business at the six-acre property.

The RACER Trust sold the property, which includes a 32,000-square-foot building with multiple truck bays, to Lee Contracting, headquartered across the street from the ACG Penske facility, at 675 Oakland Ave.

Lee Contracting Founder and President Ed Lee said he plans to expand his more than 200-employee company, and the former ACG Penske property provides a perfect fit. “This was a great opportunity to build upon our business right here in Michigan,” he said. “Having this great site right across from our current facility provides us with a base to continue expanding the business.”

Lee Contracting is a single-source contractor specializing in complete turnkey solutions for industrial and manufacturing clients.

Terms of the sale were not disclosed.

LANSING, Mich. (AP) - Michigan Gov. Rick Snyder says a state agency is reassessing whether cars and trucks should be counted as assets for people receiving food stamps.

The state Department of Human Services last month began telling applicants with assets of more than $5,000 in bank accounts, second homes or vehicles with market values of more than $15,000 they'd no longer be eligible for assistance.

The Michigan League for Human Services says many people applying for food stamps are recently unemployed and requesting help for the first time.

Applicants say they need their cars to get to school or job interviews so they can get back on their feet financially.

Snyder told reporters Tuesday that criticism of the vehicle limit is a "valid issue" and that DHS officials are reviewing the policy.

Draft Michigan Rail Plan / MDOT

This was an interesting graph I came across in MDOT's draft report, Michigan State Rail Plan.

The miles of railroad we have in the state today, match what we had back in 1880.

The state went from a peak of 9,059 miles in 1909, to 3,900 miles today - a decline of almost 60%.

It makes sense.

The internal combustion engine began competing with rail at the turn of the last century. Trucks and cars began moving more freight and people.

user socialisbetter / Flickr

Chrysler CEO Sergio Marchionne said the two-class pay system currently in place will have to be replaced with a single wage system in the next round of contract talks with the United Auto Workers.

The UAW and Chrysler just approved a 4-year contract with the two-class pay system in place, so the next opportunity to revise the system won't come until the next round of contract negotiations.

More from the Associated Press:

Negotiations for that contract start in 2015.

He says the current system creates two classes of workers. New workers in the bottom tier make about half as much money as longtime UAW members.

Marchionne didn't say how he would come up with one wage. But it's likely he'll try to reduce the pay of top-tier workers. General Motors and Ford could follow and pay could be cut for most of the UAW's 112,000 members.

UAW workers approved a four-year contract with Chrysler on Wednesday. It includes raises for bottom-tier workers.

More on what Marchionne said comes from Changing Gears reporter, Pete Bigelow:

The structure is, “not something that can go on for a long period of time,” he said on a conference call to discuss the company’s second-quarter earnings. Marchionne continued, saying, two-tiers is “not a viable structure on which to build our industrial footprint.”

Changing Gears reporter Kate Davidson provided some insights into the two-class pay system in a piece she produced last year for Changing Gears.

At the time, the starting rate for a "two-tier" worker was $14 an hour. The new contracts have pushed the starting rate for "two-tier" workers above $19 an hour.

Whirlpool

Update 12:45 p.m.

Jeff Noel, a Whirlpool company spokesman, would not give Michigan Radio reporter Lindsey Smith a number. When pressed further about the job losses expected in Michigan, Noel said it would be “a commensurate amount."

10:06 a.m.

In a cost cutting measure, the Benton Harbor-based company Whirlpool says it will cut 5,000 jobs. There's no word yet on how many of those job cuts will be in Michigan.

Michigan Radio's Lindsey Smith is following the story and will have more for us later.

From the Associated Press:

Appliance maker Whirlpool Corp. says it will cut 5,000 jobs in an effort as it faces soft demand and higher costs for materials.

The jobs to be cut are mostly in North America and Europe. They include 1,200 salaried positions and the closing of the company's Fort Smith, Ark., plant.

The company expects the moves will save $400 million by the end of 2013.

Whirlpool also says its third-quarter net income more than doubled to $177 million, or $2.27 per share, from $79 million, or $1.02 per share. Adjusted earnings of $2.35 per share fell short of analyst expectations for $2.75 per share.

The company, whose brands include Maytag and KitchenAid, has been squeezed by higher costs for materials such as steel and copper.

Bloomberg News reports that Whirlpool employs 71,000 people around the world "at 66 manufacturing and research sites.":

Whirlpool follows European rival Electrolux AB (ELUXB) with a more muted outlook for the year. The Swedish company said today that it will deepen cost cuts after lowering a forecast for growth in Europe and North America this year. Whirlpool said reductions in Europe and North America account for about 10 percent of all employees in those regions. The company has a global workforce of 71,000 at 66 manufacturing and research sites.

Ricardo Giaviti / Flickr

On the heels of the approval of a four-year contract with the United Auto Workers comes news of a 3rd quarter profit from Chrysler.

The company reported a profit of $212 million for the 3rd quarter (July, August, and September). The company had reported a second quarter profit earlier this year ($181 million for the months of April, May, June).

From Chrysler's press release:

Chrysler Group LLC today reported preliminary net income of $212 million for the third quarter, compared with a net loss of $84 million a year ago, as the Company continues to increase sales and benefit from its alliance with Fiat S.p.A.

In the third quarter of 2011, net revenue was $13.1 billion, a 19 percent increase from the third quarter of 2010, driven by increased demand for Chrysler Group’s 16 all-new or significantly refreshed cars and trucks.

Chrysler CEO Sergio Marchionne said these profits show the company is back on track:

"In the third quarter, Chrysler Group achieved increased sales and positive financial results, totally in line with the plan we laid out in November 2009. And in October, together with the United Auto Workers, we crafted a solid four-year contract that will support us in our growth plans and significantly reward our employees for their contribution to the revival of Chrysler," said Marchionne.

The Detroit Free Press reports the company "predicted it would make between $200 million and $500 million this year."

Cracked and broken roads
nirbhao / FLICKR - HTTP://J.MP/1SPGCL0

In a speech today directed toward the Michigan Legislature, Governor Snyder expressed his desire to improve just about every bit of infrastructure in the state.

Roads, bridges, airports, ports, rail, water lines, sewage pipes, and broadband Internet connectivity - it was all on the table, and the Michigan Governor said the state's infrastructure was suffering from a lack of investment.

The Governor said the state's economic recovery is tied to investing in all these bits of infrastructure, and that there is "no time to waste."

user ardee4 / Flickr

Governor Rick Snyder will deliver an address in Southfield tomorrow on improving roads and other infrastructure.

Geralyn Lasher is the governor’s communications director. She said the address will touch on a wide variety of topics that are critical to improving the state’s economy and protecting public health.

user jinglyjon / Flickr

History is filled with searches for Magic Bullets.

Economically speaking, those are quick-fix endeavors that promise to fix sour economies, provide jobs and bring prosperity to communities and regions. Changing Gears reporter Kate Davidson wrote earlier this week that, “Some have soared; many have backfired.”

Communities across the Midwest are employing a new round of Magic Bullets in attempts to rescue themselves from the Great Recession. All sound promising, but which ones stand up under further scrutiny?

General Motors officials said they will "create or retain" 418 jobs with a $325 million investment at a suburban Detroit transmission plant. The company says it will invest "in tools and equipment to support production of future electric vehicle components."

So which is it? Are they creating or retaining the jobs?

According this report in Crain's Detroit Business, 360 jobs will be created at the plant in Warren, Michigan as a result of the new UAW contract:

The company would not say how many of the 418 jobs will be new positions. But a summary of GM’s new four-year contract with the UAW said 360 jobs will be added at the plant for a new transmission that originally was to have been built in Mexico. The union said that the jobs were brought to the U.S. as part of the new contract.

At this point, GM is not revealing the timing for the project.

According to GM, 679 current employees at  the plant in Warren make transmissions for the Chevrolet Traverse, Buick Enclave, GMC Acadia, and the Chevrolet Malibu sedan.

From a GM press release:

“This investment in the future recognizes the excellent work force and operation of this plant,” said GM Manufacturing Manager Gerald Johnson. “While we aren’t sharing many details about this product, I can tell you that this investment demonstrates how GM, working with our UAW partners, continues to innovate and bring new electrification solutions to our customers.”

The 2.1 million square-foot plant, equivalent to the area of 15 city blocks, produced more than 338,000 transmissions in 2010.

“We are very proud of the membership of UAW Local 909 whose hard work and dedication to building quality products is why this new electric drive unit module is being built in the United States,” said Joe Ashton, UAW vice president representing the GM Department.  “These good paying, middle class jobs are very important for the State of Michigan and the Metro Detroit area.  It is the UAW’s goal to increase employment at GM and show the world that we can compete with anyone.”

 NEW YORK (AP) - Standard & Poor's is raising Ford Motor Co.'s credit rating two notches, saying a new contract with auto workers will allow for continued profits at the car maker's North American operations.

S&P said Friday it was upgrading Ford to "BB+" - one level below investment-grade - from "BB-."

Ford shares are up 45 cents, or 3.9 percent, to $12.15 in late-morning trading.

John F. Martin / General Motors

Three years ago, the advanced battery industry in the United States existed only in the imagination.

Plenty of people believed electric cars would be the next big thing, and they would be powered by lithium ion batteries; the same kind of batteries that are in cell phones and laptops.

But in 2008, almost all of the lithium ion batteries in the world were made in Asia.

Randy Thelan heard that might be about to change.

Batteries come to Michigan

Metro Detroit saw a boost in the number of home sales and home prices last month.

The Detroit Free Press reports the September increase came from an active summer selling season:

Sales rose 8.2% in September from 4,222 to 4,568 in metro Detroit, according to Farmington Hills-based multiple listing service Realcomp. The data includes sales from Livingston, Macomb, Oakland and Wayne counties.

Median prices rose 10% from $68,000 last month to $74,900.

Michigan Radio's Steve Carmody reported earlier this month about positive home sale numbers around the state, but housing analyst Alex Villacorta with Clear Capitol expected a decline this winter.

Obama, werewolves and silver…er…magic bullets

Oct 17, 2011
Kate Davidson

While we’re on the subject of magic bullets, please indulge this brief sidebar.

Schisms happen.  There was once a tremendous split between the (now) Roman Catholic Church and the (now) Eastern Orthodox Church.  Today there’s also a Great Schism in the bullet world.

Namely, between those who say magic bullet and those who say silver bullet — both parties referring to an economic quick fix.

On one side, you have President Obama, who may be the highest profile proponent of the term silver bullet. While pitching his jobs plan to a recent joint session of Congress he said, “It should not be nor will it be the last plan of action we propose. What’s guided us from the start of this crisis hasn’t been the search for a silver bullet. It’s been a commitment to stay at it, to be persistent, to keep trying every new idea that works.”

History is full of the search for magic bullets, those quick tickets to jobs and economic prosperity. Cities across our region have put great hopes and resources into magic bullets.

Some have soared; many have backfired.

This week, we’re bringing you stories of magic bullets past and present. We start with this look back.

Magic bullets are kind of like imaginary friends. We all have them in our past, but most people deny they exist.

Occupy Wall Street: Where does it go from here?

Oct 17, 2011

I drove into downtown Traverse City on Saturday afternoon, and to my surprise, found an Occupy Wall Street demonstration occupying both sides of Front Street, the town’s main drag.

Well, it was actually called an “Occupy Traverse City,” demonstration. The protestors, who numbered perhaps fifty or sixty, seemed more cheerful than angry. The weather was brisk but pleasant; it was a nice day to be outside.

LANSING, Mich. (AP) - Moody's Investors Service has downgraded Lansing's credit rating. The city's rating has gone from Aa2, Moody's third-highest rating, to A1, its fifth highest. City finance director Jerry Ambrose says the downgrade impacts the interest rate Lansing would pay to borrow money.

Nonprofit company uses science to turn ideas into jobs

Oct 13, 2011
Niala Boodhoo / Changing Gears

(We're having technical problems with the "audio processing" file above. To listen, please click on the second file.)

Steve Job’s death last week has reminded everyone firsthand the notion that everyone has ideas, and very few become actual products.

That’s because ideas need a push. In some cases, a big push from science to become reality.

It sounds obvious, but when we’re talking about actual products, that translate into actual jobs, and actual economic activity, it’s worth exploring.

That’s why I was so interested to learn more about Battelle Memorial Institute.

Innovation can strike in a variety of ways.

(photo by Steve Carmody/Michigan Radio)

Vice President Joe Biden will be in Michigan today to tout the President’s Jobs Bill. But Michigan Congressman Tim Walberg says the $447 billion bill will hurt, not help the nation’s economy.    

Walberg is a Republican. He says the bill would increase spending and raise taxes. And he says that’s not what the economy needs to create jobs. Walberg says the nation may be better off  if Congress doesn’t pass a jobs bill this year.   

"At the very least, if we hold some things back that would be hurtful to our economy, that’s getting something done.  Maybe that’s the process right now…if there isn’t a willingness to negotiate," says Walberg.   

Walberg says he hopes a compromise can be reached which will reduce payroll taxes and spur job growth.

Ford Motor Company

In his economic forecast for Michigan released today, George Fulton, Director of the University of Michigan's Research Seminar in Quantitative Economics wrote that Michigan's economy is recovering from hitting bottom in late 2009, "but it has not been a smooth climb, especially during 2011."

The Detroit Free Press writes that Fulton cut his jobs forecast for 2012.

...he expects just 33,000 new jobs next year, down sharply from his earlier forecast of 61,500 positions.

Fulton expects the total number of jobs created from late 2009 through 2013 to be 187,000.

From the report summary:

The continuation of the recovery is supported by steadily rising vehicle sales and an improved U.S. economy over the next two years. Manufacturing continues to grow through 2013, but the largest job gains are in the service industries, led by health services and professional and business services. Government continues to shrink over the period.

Help Wanted: Why manufacturing temps are in demand

Oct 5, 2011
Kate Davidson / Changing Gears

Here are four very bad words you hear a lot these days:

There.  Are.  No.  Jobs.

But it turns out, that’s not entirely true.

Yes, the manufacturing sector lost six million jobs last decade.  But now, staffing agencies that place temporary workers in manufacturing say business is booming.

screen grab / fordahead.com

Update 1:03 p.m.

More details of the UAW-Ford agreement emerged after the UAW's press conference. UAW vice president Jimmy Settles reports winning a "a $6,000 settlement bonus for workers and $7,000 in inflation protection and competitive lump-sum payments over the term of the agreement."

Settles said workers will receive a payment averaging $3,700 this year.

Entry-level wages for new Ford workers are similar to the GM agreement. Their hourly pay was raised to $19.28 over the term of the agreement.

The union details where the investments in jobs and upgraded auto plants will occur in the U.S. saying that "jobs, investment and product guarantees in the tentative agreement include":

  • Flat Rock, Mich., second source for the next generation Fusion and next-generation Mustang.
  • Kansas City, Mo., in-source Transit Commercial Van from Europe.
  • Louisville, Ky., new unnamed vehicle in addition to 2012 Escape.
  • Wayne, Mich., in-source C-Max from Europe in both hybrid and plug-in hybrid models.
  • Avon Lake, Ohio, in-source medium truck and frame assembly from Mexico, along with in-source Motorhome Chassis.

The agreement with Ford was recommenced to the union's larger membership. Now all UAW members will vote for or against ratification this week.

10:27 a.m.

The agreement reached between Ford Motor Company and United Auto Worker representatives will lead to more jobs and investment in the U.S., according to the Detroit News.

Alisa Priddle of the Detroit News reports that many of those jobs will be in Michigan:

The figure includes 7,000 jobs previously announced as well as 5,000 additional jobs - the majority of them new and paying the lower, entry-level wage. Ford officials declined to break down the exact split between new and saved jobs. Some the jobs are from in-sourcing of work that has been previously done in other countries, including Mexico, Japan and China.

The UAW says that "proposed agreement also includes $16 billion of investment to produce new models and upgraded vehicles and components by 2015, of which, $6.3 billion will be invested directly into retooling and upgrading plants."

Ford's union workers are demanding more from Ford compared to the workers at GM and Chrysler.

Part of it has to do with bargaining from a position of power. Ford's union workers could strike should an agreement not be reached. Chrysler and GM workers do not have that option. Both Chrysler and GM took loans from the federal government's Troubled Asset Relief Program (TARP). A condition of those loans stipulated that its workers could not strike.

Brent Snavely reports in USA Today on the other reasons workers at Ford hope to achieve more in their negotiations with the company.

Entering contract talks, the UAW and Ford had an unresolved grievance, signed by 35,000 of the automaker's 40,600 workers, alleging that Ford had violated equity of sacrifice promise by restoring merit pay to white-collar workers but not to hourly workers.

But Ford workers say they have more reasons to expect more than UAW members at GM. Ford has made $14.2 billion in profits since the end of 2008. Ford CEO Alan Mulally and Executive Chairman Bill Ford each made $26.5 million in 2010, an amount that many workers find excessive since production workers have gone eight years without a base wage increase. That high executive pay has become a rallying point for discontents in Ford's factories.

Comparing previous contracts, Snavely reports that "Ford pays $58 an hour for wages and benefits, which is about $2 more per hour than GM and $9 an hour more than Chrysler were paying..."

More details of the tentative 4-year agreement between Ford and the UAW will be revealed at an 11:30 press conference. The contract will not be ratified until the UAW membership votes on it.

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