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Recession ships more Indiana jobs to other countries

Associated Press
May 2, 2010
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Burial casket jobs in Richmond and computer assembly services in Carmel have shifted to Mexico. Auto stamping work once done in Howe has moved to Canada and India. Client performance analysis done in South Bend is now being handled in China.

The number of Indiana plants, warehouses and offices sending jobs abroad since the recession began in December 2007 has more than doubled that of past economic downturns, U.S. Department of Labor reports show.

The shifts are largely due to lower wages in foreign countries such as Mexico, where workers earn 10 percent of what their U.S. counterparts make.

"It's hitting us very hard," said Mayor William Graham of Scottsburg, where four plants have closed for trade-related reasons. "It's impossible to be competitive with Mexico or China because of their labor costs."

During the 1982 recession, workers at 75 Indiana companies were certified as dislocated by foreign trade from January 1980 to December 1983, Labor Department reports show. This time, 163 plants, warehouses and offices are involved.

The 163 cases cited by the Labor Department could account for an estimated 50,000 job losses — about one of every six unemployed people in the state.

Michael Hicks, director of Ball State University's Center for Business and Economic Research, said the Internet and technology make it easier for companies to outsource operations to other locales than in the past.

In some cases, the imports could be a cost-control measure to weather the hard times. But many industrial workers say they'll be surprised if the jobs come back to the U.S.

"The first few times you hear a company is moving outside the U.S., it kind of shocks you. Then you get numb to it," said Larry Neer, a father of six displaced from a $12.85-per-hour logistics job last year when JDS Uniphase moved electronics assembly to Guadalajara, Mexico, from Indianapolis. "It just seems like that's the common thing to do now."

The shifting jobs have put more workers in need of job retraining.

About 7,000 workers in Indiana were certified last year for retraining, and federal officials allocated $7 million for aid.

The aid pays tuition for 104 weeks, extends unemployment compensation and provides stipends in some cases for job searches and relocations. But no jobs are guaranteed for retrained graduates, many of whom lost jobs in the auto industry.

Many of those retraining for new jobs will make significantly less than they did in their factory jobs.

Anna Rains of Lynn lost her $15.85-per-hour job when Richmond burial casket maker Milso shifted work to Mexico. She took courses in business computer skills under the trade assistance program but still hasn't found full-time work.

She's currently cleaning houses in Richmond.

Graham, the Scottsburg mayor, says his community lost nearly 800 jobs, nearly a third of the southern Indiana county's industrial base.

"The change has been so rapid and drastic; yesterday's world is just gone," said Graham. "The rapidness is just an absolute shock.

The county's unemployment rate is 12.8 percent, but Graham says the full impact of the plant closings still hasn't been felt.

"Many of these people who lost their jobs are in training and draw unemployment. Once this runs out, we're going to be in a real crisis if we don't see some new jobs," he said.

Nelson Spaulding, director of the Scott County Clearinghouse food bank, said more people are seeking help than ever before.

He said the jobless rate approached 25 percent during the 1982 recession, but then jobs returned. This time, the factories closed for good.

Kimberly Kiefer, one of five family members formerly employed by city mainstay Freudenberg NOK, is trying to find a silver lining in her situation.

"I look at this as a great opportunity for me to go back to school," she said.
 

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  • Right to Work State
    Alot of articles in up and down times repeatily blame the down turn in the economy because it simplies bad economy is the big picture in most people eyes. If you can't think of anything else to write about in a bad economy, write "anything" and it's effects from the "bad economy." Looking deeper in Indiana and youtr "Right to Work" mentality destroys alot of employees attutides, how they perceive work ethics and how they perform. Companies will always go somewhere where the workers will work cheaper. What's left is people looking for work in a hostel envioment all their life. Do a article on company greed in Indiana. I saw a article on TV on China. A company here in the U.S. sells a hat with their logo on for $20. The Chinese company makes the hats for 96 cents?!?!! What is that, a 200% mark up!?!?! Who can live on that in a, Right to Work State??!?
  • Who is Leaving
    I understand why some companies need to move jobs around and some outside the US. The company I currently work for is doing it, too. Can IBJ print a list of companies that need to move out of IN in an effort to encourage our Legislators to support appropriate legislationg and tax incentives to keep companies and jobs in IN?

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  1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.

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