Photo by Sylvia Hall
Chicago’s industries and businesses are so diverse and broadly based that its economy is similar to the U.S. economy, according to Tom Bartkoski, director at World Business Chicago.
Which means it’s not surprising that Chicago’s recovery is moving similar to the rest of the country, according to William Testa, vice president at the Federal Reserve Bank of Chicago.
Graphic by Crain’s Chicago Business
“It appears that Chicago is sharing in the economic expansion about apace of the United States,” Testa said.
The industrial diversity means that Chicago’s economic recovery will rely on the recovery of Chicago’s businesses and industries as a whole, Bartkoski said.
“With a diverse economy your eggs aren’t in one basket, so in terms of the ups and downs of the economy, we’re not tied to one particular sector,” Bartkoski said. “That’s good when one sector is down. You don’t do as well when that sector is up.”
Here is a breakdown of some of Chicago’s main economic sectors.
The Chicago area accounts for a large portion of the national pharmaceutical employment—about one out of eight employees, according to Bartkoski.
“That’s a large sector and it’s one that involves a lot of moving parts, because you not only have the big pharmaceutical companies but you have smaller firms, the research firms, the research hospitals, the universities,” he said. “It’s a pretty significant slice of the economy here.”
And it’s not all drug development, Bartkoski said. The industry also encompasses important aspects such as research and general pharmaceutical production, which all employ people.
Recently, Chicago has attempted to raise its visibility in the industry through measures such as hosting a prominent biotechnology conference.
Photo by Kevin Sue
The excessive homebuilding in the United States also affected Chicago, which is experiencing a low demand for retail construction.
“The homebuilding residential sector is still very moribund and weak in the Chicago area,” Testa said. “The overbuilding that took place was greater than in a lot of the surrounding cities in the Midwest.”
All of this adds up to too many available houses, he said.
“[Residential home] retail sales have been weak,” Testa said. “So it will take some while even after sales have recovered before homebuilding starts to be pulled along.”
Additionally, there was some overbuilding of retail strip development that went along with the home development, he said.
Photo by Kevin Sue
Chicago has a tremendous cargo industry that spans road, rail and air, Bartkoski said.
The recession may have hurt the demand for goods, which means less freight was carried, but railroads still have a stronger outlook than compared to the sluggish 90’s. Good news for Chicago, Bartkoski said.
“We are the rail hub of the United States,” Bartkoski said. “We are the location where the eastern railroads and western railroads come together. So that puts us in a unique position in the U.S. rail grid.”
Unfortunately, airport traffic at O’Hare International Airport has been sluggish so there is little justification for airport expansion, Testa said. How the airlines handle or hedge fuel costs will also determine how the industry plays out, Bartkoski said. On a positive note, the merged Continental-United is locating in Chicago rather than Houston.
According to Testa, manufacturing stands out from the other industries due its post-recession growth.
“U.S. economic output has just about regained about what it lost before the recession and manufacturing has been growing very rapidly, much more rapidly than the U.S. economy. But it has only recovered about 60 percent of the downturn,” Testa said. “So it went down much more sharply than the general economy and it’s snapping back more quickly and leading the recovering in terms of growth, but it’s from a very low point.”
Part of this recovery is due to manufacturers rebuilding their inventories and experiencing growing exports. The purchasing in the industry could indicate forthcoming demand, he said.
“If that trend continues, you’re going to see a pickup in the manufacturing sector and that would be very welcome anywhere,” he said.
Chicago’s manufacturing is particularly diverse, producing products ranging from medical supplies to metals to food, Bartkoski said. In particular, food manufacturing has a large presence in the area, he said.
“Because we’re in the middle of this huge agricultural base and the transportation system, it makes us natural for food processing and production,” Bartkoski said.
The election is just 18 short days away. The four remaining candidates for mayor of Chicago — Rahm Emanuel, Gery Chico, Carol Moseley Braun and Miguel del Valle—are hitting the streets, trying to get Chicago’s support. The economy weighs heavily into the debate, as the Windy City carries a multimillion dollar deficit. Move your cursor over each candidate’s head to see how they plan to stimulate the economy.
One day it’s up, the next day it’s down, way down. Given the tumultuous nature of the economy as of late, it’s hard to tell where the nation’s financial status is headed next.
But things may be looking up, Chicago. Last week it was announced unemployment rates—a trusted economic indicator—dropped two points in December in the Chicago-Naperville-Joliet area. Additionally, the Illinois Department of Employment Security reported there were 46,300 more jobs in Illinois in December than there were the year before. And according to Chicago Business, Employment Director Maureen O’Donnell says the long-term trend has Illinois gaining jobs. It may be a slow and steady climb, but it’s a climb nonetheless.
And there’s more good news: The Conference Board, an business research organization reported a jump of 15% in online job advertisements. Advertisements don’t equal jobs, but from all indications it’s one small step towards a large wave of economic recovery.
In light of this news, we wanted to get Chicago’s view of the state of things. We asked 50 people in the Loop to tell us what they think of the economy right now. You can see the results in our Tagxedo word cloud below.
Clearly, Chicagoans are hopeful but there is still a strong sense of skepticism among the respondents.
Michael Anderson of Chicago is worried that the economy won’t get better because of the people at the top.
“We’re in bad shape. And it boils down to greed. If the top CEOs weren’t trying to make so many millions of dollars, things could be better,” says Anderson. “I mean, how much money does one person really need?”
There was a general consensus among those we interviewed—the wealth distribution in the U.S. is not entirely fair. The age-old sentiment rang true for many: the rich get richer, the poor get poorer.
But not everyone was feeling negative about the economy. More than a handful of respondents were hopeful 2011 would be the year of the recovery.
And if you’re going to be unemployed, Chicago’s not such a bad place to be, according to Chicagoan Jessica Bubin, a freelance visual artist who earned a PhD from the University of Chicago. “The only thing worse than being unemployed in Chicago is being unemployed in San Francisco or New York.”
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What happens when you suddenly get laid off or hate your job and want to switch career paths? Many people, out of university in their 20s and 30s, are taking unpaid internships to get their foot in the door. And with the pessimistic economy, more companies are providing internships to the unemployed who don’t want a gap in their resumes.
“Internships have been significantly increasing for lots of reasons, even previous to the recession,” said Lonnie Dunlap, executive director of Northwestern University Career Services. “It can be a very valuable way of getting opportunities in non-academic areas.”
Dunlap said employers have rediscovered internships during the recession, but noted that some employers have also taken advantage of people’s need to work.
“It’s important to look at the employer’s history and to see if it fits with the worker’s and employer’s needs,” she said.
A Tale of Three Adult Interns
Rick O’Connor, 37, worked the financial field, doing “stuff in retirement,” until he was laid off at age 30. Having an interest in radio, he decided to intern at Chicago’s WGN Radio.
“People were really questioning me,” he said. “Financially, we were able to do it but it was just a stigma.”
The idea seemed “crazy” because his wife wasn’t working, he said. But O’Connor’s goal was turn the internship into a job. After his internship was over, he hung around the station, completing random tasks, to keep his “exposure level” up.
When a full time producer left, O’Connor was in the running for the job because he had positioned himself well, he said. He worked at the station until he was laid off last year.
“The internship is a long job interview. You keep marketing it and treat it like a real job.”
O’Connor is currently going to school to become an English teacher.
Cole, an Austin, Texas resident, took the six-month apprenticeship with Kocurek Family Artisanal Charcuterie in October with hopes of getting hired after the experience. Apprenticeships with chefs are common in Europe, he says, unlike in the United States where people go to culinary school.
“We live in a culture where you’re spending $40,000 to $50,000 to go and make $10 dollars an hour,” he said. “That’s ridiculous.”
Cole previously earned a living fixing rims on luxury cars. To pay the bills, Cole works odd jobs and helps his wife with her photography business.
At his apprenticeship, Cole is learning the art of smoking and preserving meats, which he finds more gratifying than fixing rims.
“It takes a leap of faith to know that you’re not going to make a lot of money but develop yourself as an individual and as a person,” he said.
Anna Premo, 26, went from working in the fashion industry to working in the Amazon jungle for a tea company. In February 2010, after being laid off from her job at a clothing company, she took an unpaid internship with nonprofit buildOn.
“In truth, the job I had wasn’t satisfying on a personal level,” she wrote in an email from Archidona, Ecuador. “I was constantly volunteering after work at nonprofits around Chicago, hoping to put myself in a prime position to apply for an opening if the moment presented itself.” She had a connection with the nonprofit because she had volunteered with buildOn before losing her job.
While interning, Premo collected unemployment, worked odd office jobs and babysat to pay her bills. She also cut back on “comforts” such as having brunch with friends and shopping. Eventually, Premo was hired as buildOn’s social media writer.
She said her internship proved invaluable in making her a more competitive young professional, helping her get her current position at Runa Amazon Guayusa.
She adds, “It made me recognize how important it is to truly believe in what you choose as a career path.”
Premo gives some advice to people currently unemployed or looking to change careers:
“Keep moving forward. Recognize you have choices every step of the way and make decisions based on the information you have at the time. Your dream job may not appear as quickly as you might hope, but as long as you are taking productive steps toward the end goal, that is all a person can do. Opportunities will present themselves.”
The financial meltdown began in 2007 and swept across the globe in 2008 and 2009. Chicago was not immune to the effects of The Great Recession, suffering double digit unemployment rates and a staggering amount of foreclosures. More than two years removed, the Windy City now appears to be on track toward recovery.
Want a quick primer on the meltdown and recovery? Take a look at Chicagoloopster’s economic timeline.
Photo: Stocks at the Chicago Board of Trade by Scott Olson/Getty Images North America
Photo: Chicago Board of Trade by mheisel, used under the Creative Commons license
Photo: Foreclosure sign by BasicGov, used under the Creative Commons license
Photo: ABOVE (stocks falling) by obknoxious, used under the Creative Commons license
Unemployment statistics from the Bureau of Labor Statistics
Quarterly earnings reports from the Medill News Service
The traffic study that was released last week will be a surprise to no one who travels around the Chicago area in a vehicle. It confirms what many drivers had long thought was true—Chicagoland ranked at the top of the list as the area with the most congested roadways in the country.
The new 2010 Urban Mobility Report issued by the Texas Transportation Institute measures congestion in 439 urban areas in the U.S. in an attempt to identify the problems facing urban travelers.
The study found in Chicago commuters spent an extra 70 hours a year in their cars in 2009. The national average was 34 hours.
According to a recent article in the Chicago Tribune, Chicago commuters now have the longest delays, a distinction has Los Angeles long held.
But it’s more than just time being wasted in our cars. Money is too. Congestion costs each commuter and extra $1,738 on average in 2009, reports the Tribune.
All this may ring very true with Chicagoland drivers, but although the Urban Mobility Report receives a lot of media attention it is by no means a comprehensive study on overall mobility.
“The report is actually a very crude way of looking at congestion and is quite arbitrary. It just measures traffic and not public transit and mobility in the broad sense,” says Hani Mahmassani, director of the Northwestern University Transportation Center. “What I’m more concerned with is the ability to move trucks and freight and merchandise and the logistics of that.”
Chicago has long been a hub of freight transit, and congestion can be detrimental to the city’s status in this arena. That may not seem like a big concern to the average Chicagoan, but according to Mahmassani, when Chicago becomes too incompetent to move freight around efficiently it effects the city’s overall economy all the way down to consumers who have to pay more for goods.
Traffic, of course, effects freight mobility, but so does aging bridges, construction and a host of other complexities. The Federal Highway Administration has studied the freight transit issues in Chicago in hopes of combating them. There’s also an initiative called CREATE, a massive undertaking to improve and increase the efficiency of the region’s rail infrastructure and quality of life of Chicago-area residents. The overall goal is to reduce traffic congestion, deliver shorter commute times, better air quality and increased public safety. You can read more about the initiatives here.
Plans for the near future and beyond are also in the works. The Chicago Metropolitan Agency for Planning recently debuted “Go to 2040,” a regional plan with recommendations for officials and local businesses to improve quality of life in Chicagoland. You can learn about the comprehensive regional mobility plan here.
Keeping the trains and buses running is a year-long job for the Chicago Transit Authority. During the winter months, its difficulties are compounded by freezing temperatures and varied snowfall.
“Cold weather ages transportation infrastructure at a troublesome rate in a difficult way,” said Joseph Schwieterman, professor of DePaul University. “Especially the chilling and thawing process is extremely hard on roads and railroad tracks.”
The CTA prepares for the winter months in advance, said CTA Spokeswoman Noelle Gaffney. Many of these preparations include ensuring that the proper tools and equipment are available should the need arise. The CTA garages stocks are updated in case equipment or machinery needs to be replaced and conducts regular inspections, she said
In addition to preparations, the CTA constantly checks current conditions.
“There’s a lot we do in advance of winter that we just we’re going to need to have done,” said Gaffney. “But we also monitor the weather and if there is sleet or snow forecast, we respond accordingly with making sure the proper resources and staff are in place when snow does come.”
Trains are outfitted with sleet scrapers that remove ice from the rails as trains pass. Additionally, de-icing fluid is sprayed onto the rails when ice builds up. Snow plows are placed on the front cars to handle any snow banks that might pose a problem, Gaffney said.
Additionally, in case of difficulties that normal train operations can’t handle, CTA workers are on call to fix winter-related problems using special heavy equipment, she said.
“The other thing for trains when it gets really cold, switches freeze and that’s a huge problem for the CTA and Amtrak, especially when you have snow mixed in,” Schwieterman said.
Snow would become caught in the switches, preventing movement. Sometimes the electrical circuitry controlling the switches would freeze as well, but is not as common, Schwieterman said. To handle this particular problem, the CTA has heaters at switch locations which are activated by track workers allowing operations to continue and prevent derailment, Gaffney said.
The CTA doesn’t forget about the customers either. The station heaters are checked before the season and during times of snowfall, the CTA staff and outside firms are sent to shovel sand to prevent people from slipping, Gaffney said.
Ultimately, when it comes to cold weather, it depends on the conditions. How heavy or light the weather is and how long it lasts determines the CTA’s response, she said.
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Want to know when the next train’s coming? Don’t worry – there’s an app for that.
In January, the Chicago Transit Authority officially rolled out its beta version of the CTA Train Tracker , available as a mobile application for smart phones and on the Internet. The authority’s bus tracker has already been in place since last year.
In the press release, the CTA stated that estimated arrival times are generated through a combination of scheduling information and the data collected by the QuicTrak program, “which monitors signaling systems and indicates when a portion of track is occupied by a train. Average transit time is determined by measuring how long it takes a train to travel a portion of track and by averaging the travel times of the last five trains to move across a portion of track, the CTA can calculate the estimated arrival times for trains at each station.”
Okay, so it’s a little confusing. But what Chicagoans really care about isn’t methodology, it’s how well the tracker works, right?
So far reaction seems to be positive – in large part because commuters have been waiting for this for awhile now. The CTA Tattler blog even wrote about the CTA pre-testing the tracker on the Brown line back in April.
The Twittersphere has been praising its introduction, which many say was a long time coming. Twitter user Jose L. Torrez went so far as to call it a “WIN!” while Anne Haley, aka Anniebannanie91 tweeted “Cta train tracker= my bff.”
“Train tracker seems to work well,” said Ryan C. Miller, coordinator of orientation and parent programs at the Illinois Institute of Technology. “I’ve not been burned by it – yet.”
Time Out Chicago also did their own little test to see what people’s reactions have been, as did The Huffington Post. Blogger Steven Vance got a chance to try out the tracker before everyone else did. His verdict? It needs a few tweaks for mobile devices but other than that, he’s “extremely impressed.”
So far, it sounds good. Now if we could just do something about those pitiful French -fry warming lights at the stations….and maybe WiFi underground. Yes, please?
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