CHASING WAL-MART PART 2, PART 2: Here's an article from the Sun-Times on Wednesday that lays out the sides in the Chicago City Council fight pretty clearly.

The Chicago Federation of Labor has made three demands of the retailing behemoth it calls "Public Enemy No. 1": that Wal-Mart agree not to sell groceries at any of its Chicago stores to avoid driving down the wages of its supermarket competitors, that the company remain neutral in any union-organizing campaign and that it pay its Chicago employees a "living wage."

None of those promises are included in the letter, and Wal-Mart made no apologies for the omission.

Asked why Wal-Mart won't pay the living wage of around $9.10 an hour when its Chicago area associates already average $10.77 an hour, regional manager for community affairs John Bisio said, "Wal-Mart is not a city contractor. Nobody that I know in retailing is promising to participate in something that doesn't apply to them."

Chicago Federation of Labor President Dennis Gannon charged that 60 percent of Wal-Mart's employees are part-timers earning only $7.55 an hour.

"If this marketplace means so much to Wal-Mart, what's the problem putting it in writing for all the world to see?"

While initial plans call for the Wal-Mart stores in the Chatham and Austin neighborhoods to sell general merchandise only, Bisio said a super-center that sells groceries cannot be ruled out.

And another take from the Tribune, via the Joe Hill Dispatch (the Tribune site requires registration):

We have leverage here," said James Thindwa, executive director of Chicago Jobs With Justice. "They cannot maintain their level of profitability without going into urban centers like Chicago. This city has an opportunity to set a precedent, to really shift the terms of debate on Wal-Mart."

For some, that has already happened. Community leaders in the West Side's Austin neighborhood who support Wal-Mart's arrival to a commercial landscape dotted with dollar stores, fast-food restaurants and corner grocery markets have garnered a string of promises from the company, some of them unprecedented, Bisio said.

For example, area churches and other groups would have a say about which banks handle daily deposits for the store and which contractors would help build the store at Kilpatrick and Grand Avenues, Bisio said. The company has also said at least 75 percent of the 300 jobs created at the store will go to people from the community, including the possibility of hiring ex-convicts; it will pay "competitive wages" that start at $7 an hour; and it will consult local leaders on where corporate donations would be most useful.

Wal-Mart executives are in similar discussions with groups in the Chatham neighborhood on the South Side, Bisio said.

"We've weighed the pros and cons of having a Wal-Mart in this community and the pros far outweigh the cons," said Rev. Joseph Kyles, chairman of the 37th Ward Pastors Alliance, a group of 24 area churches on the West Side. He characterized the various commitments as opportunities to address such long-standing local concerns as bank redlining, affordable housing and deteriorating public schools.

More here and here.

CHASING WAL-MART PART 2 -- WHAT WE CAN LOOK FORWARD TO:

There are lots of stories today about Chicago City Council voting to approve one new "neighborhood Wal-Mart" but not a second. Here's the AP story from the South Bend Tribune...

Last month, Wal-Mart launched a lobbying campaign to overcome the opposition. The retailer used a telephone bank to connect people who said they supported the stores directly to several aldermen's ward offices.

The supporters were found by pollsters hired by Wal-Mart, who called hundreds of Chicago residents Monday and Tuesday. Anyone who said they supported the stores was patched through to one of 11 aldermen, according to Thom Serafin, a public relations consultant hired by the retailer.

WHY AREN'T WE FEELING BETTER YET?

MaxSpeak sez: "Economic growth is great, unless you have to work for a living."

From the Economic Policy Institute article he's pointing to:

Corporate profits have risen 62.2% since the peak, compared to average growth of 13.9% at the same point in the last eight recoveries that have lasted as long as the current one. This is the fastest rate of profit growth in a recovery since World War II.

Total labor compensation has also turned in a historic performance: growing only 2.8%, the slowest growth in any recovery since World War II and well under the historical average of 9.9%.

...Growth in total wage and salary income, the primary source of take-home pay for workers, has actually been negative for private-sector workers: -0.6%, versus the 7.2% gain that is the average increase in private wage and salary income at this point in a recovery.

These are ominous signs, suggesting a new march toward greater inequality in the American economy. Worse, the growth in profits combined with a drop in wage and salary incomes suggest that the recovery has a narrow base, with most American consumers only able to increase their purchasing power through debt. Wage growth is not just fair, it is also necessary for a more sustainable recovery.

CHASING WAL-MART: Via Ed Morrison via Brewed Fresh Daily, we learn that Good Jobs First has a new report out documenting a billion dollars in government subsidies to Wal-Mart. This will not be surprising to those who follow Policy Matters Ohio, which published this two years ago.

But in the light of the Campbell Administration's ongoing pursuit of big box stores for city locations -- and the rumors I keep hearing that the city has been talking to Wal-Mart -- this new report does bring up an interesting question:

Exactly what economic development goal would it serve for the city to subsidize the location of one or more Wal-Marts (or Targets, which run their business pretty much the same way) in Cleveland?

If the goal of economic development is to spur local "wealth creation", Wal-Marts would seem to be a negative. The chain displaces local retailers, has no significant local ownership, exports its profits to Arkansas or somewhere like that, buys no products locally, is actively anti-union and pays crappy wages.

If the goal of economic development is "job creation", city Wal-Marts (or Targets) will make little or no net difference. Their suburban stores already hire city residents, and new stores are likely to simply displace other retailers and move existing jobs around (in some cases from better-paying unionized stores, which was the root of the recent California grocery strike).

I know, I know, the idea is to recapture city residents' retail dollars that are now flowing to the suburbs. Get a big, irresistible magnet store in a Cleveland location and other stores will cluster around it (including maybe some small locals) and create a newly viable retail district. But this just begs the main question. If most of the spending in the new retail cluster goes to a multinational company that sends its profits out of town, and pays lousy wages while displacing other local job opportunities -- and turns the neighborhood into a never-ending traffic jam -- who is "capturing" whom?

So why even think about chasing and subsidizing this kind of business in city locations? Who -- except for some real estate developers and maybe a couple of trash haulers and landscaping companies -- stands to gain?

With all the talk about smarter economic development, it would be nice if somebody -- maybe one of her foundation travel funders -- would ask Mayor Campbell this question before she boards the plane to another retailers' convention.

IS MANUFACTURING COOL NOW? All of a sudden, the "M" word is on the lips of Cleveland's talking heads. And now "The Quiet Crisis: Manufacturing" makes it official -- we still care about companies that make actual physical objects in northeast Ohio factories!

As you probably know, Joe Frolik's newest TQC panel airs tomorrow night on Channel 25 and runs in the Plain Dealer Sunday. But you can get a jump on the official release by reading the entire, somewhat ragged transcript here.

It's not a bad session as TQC panels go. The panelists are mostly in the business -- Bill Brake of ISG, Jack Schron of Jergens and Scott Rickert of Nanofilm are particularly interesting -- but there's also Weatherhead prof Sue Helper raising some big-picture issues not typical for TQC. (Like... if we have all these productivity improvements, maybe we could have shorter work weeks instead of fewer jobs?)

My favorite quote, from ISG's Bill Brake:

We're very proud of our partnership with the United Steel Workers of America... What a region can offer for us is an employee that's more sophisticated than a high school graduate of 20 years ago that comes into a large manufacturer and works on an assembly line or works in the mill.

A key component of our success at ISG has been the ownership, and accountability and responsibility of the hourly worker and they have truly taking an ownership of it. In order to make that successful, they have to be aware of business basics. They have to understand the costs. We explain EBIDTA to them to make sure we all understand what our key metric is for us. We share sales prices, we share costs of materials, things that weren't done as recently as five years ago. To explain to a worker, do you know that roll costs us X thousands to get refurbished, is that the right decision to make and let that individual make the decision. To have that successful, I need a sophisticated worker that cares about his business.

Hey, here's an innovative, outside-the-box thought: How about somebody from that Steelworkers local in the discussion? Or from the UAW local that sold Ford on reinvesting in the Brook Park engine plant? Or anybody at all from a union?

But there's an even worse sin of omission. Why, why, why isn't John Colm of WIRE-Net on this panel? Apparently he's in a supplementary interview, but when the "experts" are lined up, once again he's not there.

If you don't know WIRE-Net, do me this favor: Look through their website, consider that John has worked for fifteen years to build this nationally recognized operation from the ground up... and then ask yourself what it takes to get listened to in this town.

PD DOES A GOOD JOB ON JOBS TODAY: Alison Grant's long article on Ohio employment in this morning's Plain Dealer ("Want answers on jobs? Study patterns, not rhetoric") is several cuts above the paper's norm. Grant (along with her editor) deserves a lot of credit for a thorough, careful, ambitious piece on a really difficult subject.

How many local reporters, for example, try to explain to general readers how Ohio's manufacturing workforce is shrinking partly because our workers are so productive? And omigosh -- the story actually reveals that

...new claims for unemployment insurance [show] the state still flashing a recessionary signal. Ohio had more than 12,000 new claims during the first week of May. A more normal figure for this time of year would be about 7,000.

... a fact that George Zeller of CEOGC has been trying to get into the PD for months.

If the PD's going to make "Ohio jobs and the election" an ongoing beat, I'm rooting for Grant to get the assignment.

...AND THERE'S MORE: Steve Talbott writes that "Education may be the impetus for innovation we need"...

If the future is about no longer depending on the Big Three for our economic well-being but, rather, relying on the ingenuity of our highly educated work force, Ohio is not making the grade. We need to become innovators again.

Perhaps even more astonishing, two-year community and technical colleges accounted for just 47 percent of the state's postsecondary enrollment - compared to a 60 percent average nationally. Two-year schools are powerhouses of opportunity for kids coming out of high school and for workers who need to retrain. But even though we need them more, we're using them less.

The good news is that the goal is within our grasp. All we need to do is become obsessive about education, college education.

Yes! Send Cleveland to college!

OHIO GAINED JUST 4,300 NONFARM JOBS IN MARCH... leaving the state down 16,500 jobs compared to a year ago.

The U.S. Labor Department released state-by-state April employment statistics this morning. Ohio's nonfarm employment: 5,389,500 jobs in April compared to 5,385,200 in March, 5,373,500 in January, and 5,406,000 in April 2003.

The count of unemployed Ohioans also rose by about 5,000 from March to April.



Cleveland metropolitan area numbers are due for release June 2.

LIFE IN THESE OLD-ECONOMY BONES YET: You probably know that International Steel Group completed its acquisition of Weirton Steel on Tuesday. And if you drive in that general vicinity, you've probably noticed that the West Side ISG mill is back in production.

But have you picked up on the fact that Cleveland's ISG is now the nation's biggest integrated steel company?

With the acquisition completed, Richfield, Ohio-based ISG has moved up from the No. 2 integrated steel maker in the country to No. 1, surpassing Pittsburgh's United States Steel Corp., when measured by domestic production capacity.

Cleveland, Ohio... Steel Capital USA.

SHIPPING NEWS: From www.boatnerd.com (officially the DAILY GREAT LAKES and SEAWAY SHIPPING NEWS):

Another cross-lake fast ferry on the Great Lakes...

5/20

The fast ferry Lake Express arrived at Milwaukee's breakwall shortly after 3:30 Tuesday. On hand to greet the ferry were assorted tugs, including the G-tug Virginia, pleasure craft and government vessels. The Lake Express made a short tour of the outer harbor off downtown Milwaukee and then proceeded to the Port of Milwaukee's Heavy Lift dock.

With the new ferry dock not quite finished, the Lake Express will use the Heavy Lift dock as a base of operations for additional crew training. Trips on Lake Michigan are also planned and a trip to Muskegon is expected as well.

(The new privately owned ferry, built in Alabama for $18.5 million, will carry 250 people and 45 cars on the Milwaukee-Muskegon run across Lake Michigan three times daily. The distance is similar to the proposed Cleveland-to Port Stanley route. For more see the operator's page here.)

And...

Lightning Strikes Tall Ship Denis Sullivan

05/19

The Tall Ship Denis Sullivan, enroute to Milwaukee, Wis., from Erie, Penn., was struck by lightning Tuesday night in a storm north of Mentor, Ohio. While none of the crew was harmed, the electronic systems failed making it difficult to navigate. Fortunately, one of the mates had a hand-held GPS and managed to make it to Cleveland's North Coast Harbor.

S.S. William G. Mather Museum operations manager and live-in ship keeper, Bill McDonald, offered assistance when he discovered his new neighbor moored next to him at the end of East Ninth Street Pier. The Sullivan crew was appreciative of Cleveland hospitality, including hot showers and cold beverages.

The Sullivan last visited Cleveland during 2003's Tall Ships Harborfest. The S/V Denis Sullivan is Wisconsin's Floating Classroom and Ambassador Flagship. Some proponents of Cleveland's lakefront development suggest that Cleveland might also benefit from a similar tall ship vessel with Cleveland's North Coast Harbor as her home port.

While taking a tour of the Mather Museum Tuesday afternoon, the crew of the Sullivan said they would know within the next few hours if they have sufficient repairs to resume their journey. With thunderstorms anticipated through the rest of the week, they do not want lightning to strike twice.

THE "RE-SEGREGATION" OF CLEVELAND PUBLIC SCHOOLS? Sunday's PD spread ("66% of Cleveland's minorities attend racially isolated schools") and Roger Jones' column in the current Free Times both draw attention to the same sorry fact: Fifty years after Brown v. Board, and twenty-five years after Reed v. Rhodes, most black kids in Cleveland are going to overwhelmingly black schools. (A lot of Hispanic kids are going to majority-Hispanic schools, too, but that's a different issue with a different history.)

Is this the "re-segregation" of the Cleveland schools? Well, on one level, of course it is. If you go through the 2003 enrollment statistics for all 86 Cleveland Municipal School District ("CMSD") buildings with students in grades K-5 (they're here), you find that 46 of those buildings had student bodies that were more than 90% black. These kids were undeniably isolated from their peers of other races. (Speaking of "isolated", the average number of white students in these buildings was five.)

Most white CMSD students, on the other hand, go to schools that are "integrated" by any usual standard. Only one grade K-5 school was more than 75% white in 2003... William Cullen Bryant in Old Brooklyn, whose students were 86% white, 6% black and 9% Hispanic. Six other schools -- three in Old Brooklyn, three in West Park -- had white enrollments above 60%, with black and Hispanic students filling out their rosters in roughly equal numbers. These seven "mostly white" schools accounted for about a third of all the white kids enrolled in the CMSD's K-5 and K-8 buildings. The other two-thirds went to schools where 40-80% of their classmates were "students of color".

How can the Cleveland schools be segregated for most black kids but integrated for most white kids who go there? The answer, of course, is that there aren't enough white kids to go around... and there are large parts of the city where none of them live.

The CMSD's overall student demographics in 2003 were...

Black students -- 50,480 (70.6%)
White students -- 13,209 (18.4%)
Hispanic students -- 6,528 (9.1%)

... with "others" at less than 2%. So if you took all the white and Hispanic kids and distributed them evenly thoughout the city, all the black kids would still be going to mostly-black schools.

Why so few white kids? It's not mainly because of private school competition... the 2000 Census showed a higher percentage of whites enrolled in K-12 private schools than blacks or Hispanics, but two-thirds of the city's white kids were still in public school. If all the private-school students in Cleveland, of all ethnic backgrounds, rejoined the CMSD tomorrow, black kids would still be 65% of the system's customers, and whites would barely exceed 25%.

The simple fact is that Cleveland has become a "city of color", especially among its younger citizens. White Cleveland residents are now just the city's biggest racial minority. And pretty much all the city's families with school-age kids, of any race, are poor.

In this environment, do "segregation" and "integration" have any meaning in Cleveland 2004? Maybe it's time for a new paradigm.

Or maybe it's the same old paradigm in a new setting. Maybe Cleveland needs to insist on putting a unified city/suburban school system at the top of the "regionalism" agenda.

IF YOU MISSED PLUG IN CLEVELAND (or even if you were there), Dan Hanson has posted a complete account with pictures at the Magnum Computers website.

IT AIN'T FLASHY BUT IT'S GOT CONTENT: Cleveland City Council is now posting the full, official City Record on its website each week... with a complete archive all the way back through 1996! (Also posted... the Mayor's proposed 2004 budget.)

ELECTABILITY: A few Sundays ago, Brent Larkin wrote a Forum column about Mayor Campbell's election prospects. It was mostly old news, except for the parts that were somebody's weird wet dreams (e.g. the return of Mike White, but only the 1990-95 version). Predictably, Larkin prescribed an unnamed "big idea" to salvage the Mayor's ratings. When life was simpler, this used to mean the convention center, but now it's probably downtown gambling. (Apparently tearing up a major highway and cutting the port in half to build houses and parks all over the lakefront isn't "big" enough.) Yada yada....

Anyway, I was more interested in the Mayor's own analysis as quoted through the column:

Campbell knows she has disappointed many. Her take on why is essentially this:

She became mayor as the economy tanked and tax receipts went south...

"Now what do we have?" she asks. "We have a decrease in income tax receipts, a state government that is completely uninterested in cities and a federal government that has walked away from investing in them. So now people are mad cause the mayor can't deliver.

"If I had money, everybody would love me. But the city has no money, and all the things people want cost money... I think anybody who would be mayor at this point in its history would be challenged to produce."...

"You always worry about an election," she said. "There's two ways to run - unopposed and scared. In 19 months I have to produce investments in safety, in housing, in making this an economically viable community. The more successful I am along these lines, the more electable I will become."

Whiny as it may sound, the first part of this analysis is essentially accurate. Republican administrations in Washington and Columbus, combined with a tanked national economy, are the proximate causes of the City's fiscal and economic emergencies. It is a near-impossible task to balance the books, keep the trash trucks rolling and keep your friends happy in this situation. (Just for fun, let's imagine how Mayor Raymond Pierce would be doing at this point in his administration.)

And the problem for the city goes way beyond fiscal difficulties. Every dollar of lost wage tax signifies fifty dollars of lost personal income for some taxpayer. Cleveland has thirty-some-thousand citizens looking for work, not to mention those who've given up looking. We've got homes going into foreclosure at a record rate. We've got gas and electric bills going unpaid, cars being repossessed, hard-working people going bankrupt. Cuts in city services (like glass all over the playground and no staffed summer program where your kid used to play) are just insults added to these injuries.

So the Democratic Mayor has every right to point the finger at Republican Washington and Columbus, at budget cuts and economic mismanagement, as the source of Cleveland's (and her) immediate woes. But the next question is: What's she gonna do about it? And the answer seems to be: Not much.

In 19 months I have to produce investments in safety, in housing, in making this an economically viable community. The more successful I am along these lines, the more electable I will become.

No. Wrong answer. "Producing investments" will do little to make the Mayor more electable, because "investments" are not what the voters (or the business guys, for that matter) are looking for. What we're looking for is results -- actual jobs that we can get, actual peace and safety on our streets, actual tenants to rent our vacant offices, actual recreation staff and cleanup crews down at the playground. And because of the external obstacles the Mayor has correctly pointed out, she's not likely to produce enough of those actual results between now and Summer 2005 to make us believe things have turned around. (Sorry, but visions of new neighborhoods and parks on the water, which might seem like nice ideas in better times, become gratingly irrelevant when you've just filled out your 90th job application at the nursing home or Dollar Store.)

But there's one thing the Mayor can do to make herself more electable in 2005... something that speaks directly to the national environment that's causing us so much pain:

Campbell could make it her first priority to help produce a massive voter turnout in Cleveland this November.

By "massive" I mean 190,000 or 200,000 votes, compared to the 136,000 that voted here in 2000. That kind of turnout would go a long way toward delivering Ohio's electoral votes to John Kerry, which could, in turn, put him in the White House. If that were to happen, and Jane Campbell played a significant role in making it happen, her "electability" factor would improve dramatically. Why throw out an incumbent who's the new President's good friend?

As a side benefit, a really big turnout might also help pass the school levy, whose failure will cause major damage to her remaining base of support.

There are already serious players -- not all of whom are Campbell's friends -- in local voter registration and voter turnout efforts, and lots of national resources, so it would be wrong to suggest that there's a vacuum for the Mayor to fill. But a sitting Mayor has opportunities to do things and mobilize resources that others can't -- money, people, free media. Campbell should be asking herself if it would be smarter to start targeting those resources toward winning a friend in the White House... rather than, say, toward bailing out the Sports Commission's grandiose plan for the International Children's Games.

Win or lose the Presidential race, the Mayor's re-election will still hinge on convincing stressed-out city residents that she's actually doing something that matters to our lives. I don't know if that's still possible. But it would be a lot easier with the support of President John Kerry.

Just a thought from the bleachers.

FOR A GOOD TIME...

click here now.

(Courtesy of the Georgy Russell for Governor Blog.)

MORE SHAMELESS PROMOTION DEPT: Plug In Cleveland 1.0 is coming this Wednesday.

If you still don't know what Plug In Cleveland is, click here.

If you want to get your ticket on line, click here.

If you want to see a picture of special guest Jiffy the Robot, click here.

BLOGGER PROBLEM: Blogger went live with a "new, improved" system Sunday evening. Naturally, what it's giving me so far is a new problem: it now insists on displaying the entries on this main page from earliest to latest, putting the newest entries at the bottom of the page.

I don't see any way to fix it in the settings. So... for the time being I'm telling Blogger to show only one day of postings here. For anything earlier you'll have to look at the archives (which don't have the same problem.)

I know this looks strange, but I'm sure it's temporary.

WHY WE CAN"T KEEP ANYTHING STRAIGHT DEPT: The PD headline this morning reads "Cleveland's high-tech center is $3.5 million over budget". The lead paragraph says:

Mayor Jane Campbell's administration badly underestimated the cost of a new high-tech center for city computers and needs an extra $3.5 million for the project.

But when you read the rest of the story, it turns out that a) the "underestimate" of costs on the original project is actually $1.7 million (which is plenty bad enough); b) the rest of the "extra $3.5 million" is not an overrun but a proposal to expand the project by adding facilities for the separately funded Water Department and the Municipal Court, at their cost; and c) the money that the Mayor wants Council to approve is from Homeland Security grant funds and Water and Court funds, with construction bond money as backup -- no General Fund money is at issue.

Now this is all in Mike Tobin's article, which is quite straightforward and even-handed once you get past the lead. And the core story -- estimating screwups and strategy changes in the tech center project -- is certainly legitimate news. A $1.7 million, 50% cost overrun is serious business. I'd love to know more about the hows and whys: Did they get a bad work estimate from the architect? Does the building have structural or environmental problems that somebody missed? Is the contractor market less soft than they expected? Did someone just do the math wrong? Is there some other backstory we haven't heard about?

And while we're asking questions, why did it take the Water Department and Court this long to decide to join up? Has this whole project been pushed too fast because of the International Children's Games?

The article doesn't address any of these questions, so we don't know if there's more to this than meets the eye. But here's what we do know:

A $1.7 million shortage in the project budget is not the same as a $3.5 million shortage. Which makes the PD's headline false, and the lead sentence very misleading.

"Give light, and the people will find their own way." Oh, I'm sorry, that was that other newspaper.