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Thu September 15, 2011
'Stagnant': Checking In On The Economy In Chillicothe, Ohio
Originally published on Thu September 15, 2011 8:39 pm
The economic indicators may all say that the United States is out of recession. But what is it like in the real world?
NPR's Robert Siegel traveled to Chillicothe, Ohio. Robert had visited in the fall of 2008, when the unemployment rate was 8 percent; he travelled there in January of 2010, when it was 12 percent. Today, it's 10.4 percent.
What Robert reports from this trip is mixed. He spoke to the top three employers. The Kenworth Truck plant is doing well: Pent-up demand means they're making more trucks and have added 1,000 jobs. The same is true of the local paper plant.
One place that hasn't recovered is at Adena, the local health care system. Mark Shuter, the president and CEO of Adena, said in May of 2008, 40 percent of the people they served had commercial insurance; that number is down to 29 percent now, so people putting off care.
How deep did the recession cut? Shuter said deliveries — as in births — were down 30 percent during the recession.
Robert also sat down with three Kenworth workers: Joyce Underhill, Mike Miller and Rob Call, who are all in their 50s and have salaries in the 50s.
Underhill told Robert that things haven't gotten better. She said she feels, like they are "stagnant." All of them said they were grateful for good jobs and good times at Kenworth, but they also said looking at the economic pain around them keeps them cautious.
Perhaps, a sign of how things have changed comes from something Miller said. He said he worries about his mother who is on a fixed Social Security income. He asks her if she's doing alright and she says yes. But then he walks to her refrigerator, opens it up and finds, "you don't see the things you think should be in the fridge."
Much more from Robert will air on today's All Things Considered, so tune into your local NPR member station. We'll add his piece to this post later today.
MICHELE NORRIS, host: From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
MELISSA BLOCK, host: And I'm Melissa Block. Today, it was House Speaker John Boehner's turn to outline his prescription for the ailing economy. The speaker said that America's private-sector job creators are on strike. And in order to start hiring, they need cuts in government regulation and tax reform.
NORRIS: Boehner's speech came on a day when a panel of economists surveyed by The Wall Street Journal put the odds of a renewed recession at one in three. Over the past few years, our co-host Robert Siegel has been visiting Chillicothe, Ohio, to report on the state of the economy there. Robert went back to the city this week, and he found a mixed message: Unemployment is down, but confidence in the economy is also in short supply.
ROBERT SIEGEL, host: Chillicothe is a small city of 22,000 in southern Ohio. It's an hour's drive from Columbus through flat farmland. But as you're driving south into town, you see just beyond it the hills of Appalachia that start rolling. Chillicothe is a geographical crossroads. I'm in the old business district on Paint Street. The Ross County Courthouse is here, a colonnaded showstopper of a building from the 1850s. Of course, most of the business in Chillicothe isn't in the business district. It's in the malls and the plants that flank the highway north of town.
Government offices are here, though, and I spoke the other day with Mayor Joe Sulzer, who's about to retire from his Paint Street office. How's Chillicothe doing?
Mayor JOE SULZER: We're keeping our heads above water, barely. The labor force is about 50 percent of what it was.
SIEGEL: Fifty percent...
SULZER: Fifty percent.
SIEGEL: ...of what it was, the people working for the city of Chillicothe?
SIEGEL: When you say 50 percent, by the way, from - roughly from what to what?
SULZER: Approximately 40-some down to 20. And it makes it difficult for us to keep up with what the citizens of Chillicothe have become accustomed to over the years.
SIEGEL: That means less yard waste pickup, less leaf collection, less snow removal.
In the fall of 2008, when I first came here, unemployment in Chillicothe and surrounding Ross County, Ohio, was around 8 percent. I came back in January of 2010. It was over 12 percent. Now, it's 10.4 percent. Better than it was, better than neighboring counties, but not very good. If you do want to hear some very good economic news here, go to Chillicothe's number one manufacturer, the big Kenworth Truck plant.
SCOTT BLUE: OK, this is a T700. It was named Truck of the Year by the Association of Truck Dealers, the most aerodynamic truck that Kenworth makes.
(SOUNDBITE OF MACHINERY)
SIEGEL: Scott Blue is the plant manager at Kenworth, and he's had quite a ride over the past few years. In 2008, the plant was producing over 100 trucks a day, and it was looking to do more. Then, as the recession hit, they cut to 60 trucks a day. When I met Scott last year, he'd laid off workers in response to that low demand. Now, the truck business is back, and Kenworth is back to over 100 trucks a day. They've added 1,000 jobs.
BLUE: Business now is certainly much better than the last time you were here. We've been able to get all of our employees back to work, and we've been able to hire even more employees. We have a second shift going now, and so it's certainly a whole lot better than it was back in 2010.
SIEGEL: What happened? Well, when you sell trucks that might cost $100,000, you don't build them for the showroom. Dealers get orders first and then you produce. This year, Scott Blue says, there was pent-up demand for new trucks.
BLUE: People haven't bought trucks in the past because the - a lot of the emissions changes that have happened and so forth, and buyers were reluctant to spend the extra money to get the new truck. And now, their costs are such that the - it costs them more to keep the old truck than it does to buy a new one, so a lot of pent-up demand.
SIEGEL: So your friend in all this was that aging old truck that the company had, and the older it got, the more attractive a new truck looked.
BLUE: Certainly is one of the cases, you bet.
SIEGEL: So Chillicothe's biggest manufacturer is on the mend, and the other big manufacturer here, a local paper plant, is holding its own. So that sector is doing pretty well. The outlook is more mixed at Chillicothe's other big employer, Adena, the local health care system.
(SOUNDBITE OF CONVERSATIONS)
SIEGEL: This is a nurses' station in the new northeast wing of the Adena Medical Center. Mark Shuter, the president and CEO of Adena, says the system employs about 2,600 people now. That's 100 more than a year ago. But Shuter says that number used to grow by about 200 a year.
MARK SHUTER: If you look at the basic trend lines, the recession never ended. When you go back to, like, May of 2008, roughly 40 percent of the people we serve had commercial insurance. That has just gradually gone down to 29 percent.
SIEGEL: From 40 percent to 29 percent.
SHUTER: When you see all these other patterns of some slight lifting of unemployment, most likely those people gaining employment, they're not having benefits. So people have to make different decisions about their health, different decisions about everything.
SIEGEL: I hope they're making decisions about elective matters. I mean, I assume you're getting the same kind of cardiac patients and the same kind of childbirth patients happen.
SHUTER: Well, during the recession, deliveries were down 30 percent. So this is going to be more the same for a long time. And so, you know...
SIEGEL: This is the new normal.
SHUTER: The new normal. I don't look for this to change even if the economy perked up tomorrow and there's 5 percent unemployment.
SIEGEL: When I was here last year, I met with three senior blue-collar workers at the Kenworth plant, people who were coping with layoffs, with college tuition for their kids, with 401(k)s that were getting eaten up in the market. Joyce Underhill, Mike Miller and Rob Call are all in their 50s, and they all have salaries in the 50s. They're grateful for good jobs and good times at Kenworth, but they see an economy around them that is painful and scary. Here's Joyce Underhill.
JOYCE UNDERHILL: There's a lot of people that don't have money to spend. For instance, our church food pantry, we have like tripled the amount of people that we're giving food to now. And that just stays in my mind about how bad things are out there. As for me, I try to keep a positive attitude, but I know for a lot of people, it's not good.
SIEGEL: The official unemployment rate for Ross County, at least, Chillicothe and surround, is 10.4 percent. Do you have friends, family or neighbors who are unemployed, Mike?
MIKE MILLER: You know, that's like what Joyce said. That's the things that worry me about the way the economy is going because you're - like our market right now is either booming or you go to the next one and there's just nothing there. What Joyce said about her church, my mother and where we go at, we're seeing more and more people wanting help. The scary part of it is it's people that are out there looking for work and just can't find anything.
SIEGEL: Rob Call, your experience of that unemployment rate?
ROB CALL: I have a relation at work at the cabinet factory down in Waverly there, and they had recently closed the doors down there. And there was several hundred people that were unemployed down there. Some of them were still out of work today, but there had been a few that was able to get on up here and - Kenworth here, and employ those people up here in Chillicothe, so some of those people were pretty fortunate.
SIEGEL: Well, generally, I'd like to hear from all three of you. Do you get the sense that not just at Kenworth but in Chillicothe, generally, that the worst is behind you, the worst of the recession happened? Or do you go to work each week thinking that either it's still bad or it could yet get worse again? Joyce, you're shaking your head.
UNDERHILL: I believe that it's just stagnant. I don't feel any better now than I did two years ago.
SIEGEL: Are there changes that you have made and your family have made in your lifestyle and what you do, what you spend on, that have now become permanent in your lives or - Joyce, anything like that you've decided you're just will now have to do without?
UNDERHILL: Oh, I thought at this point in my life, my kids are gone, they're on their own, that I'd be traveling a little bit more, and it just doesn't seem to happen just now. I just think we need to wait, see if things get any better. I've put them on hold just in case I need to help my children or my mother.
SIEGEL: Mike, you, changes?
MILLER: Yeah. As far as how we do things, as far as a family, as far as going out to eat, we took our first vacation this year for the first time for a couple of years. My mother is on a fixed income, Social Security, and she's doing OK. But yet, I go in there, and I say, Mom, how you're doing? And she says, well, I'm doing good. And you open up the refrigerator door, and you don't see the things that you feel like should be in that refrigerator.
SIEGEL: And, Rob Call, are there changes in your life?
CALL: No major purchases, maintaining a three-month income level in the bank to make sure if anything major does happen, you know, we're good for a little while. Paying for college is a big thing right now, for us. So that's pretty much where any extra cash that we have will go to help pay that off and cover that. But just trying to stay very cautious with what we do.
SIEGEL: Well, Mike Miller, Joyce Underhill and Rob Call, all of Kenworth Truck Plant here in Chillicothe, Ohio. Thanks a lot for talking with me once again.
CALL: You're welcome.
MILLER: You're welcome.
UNDERHILL: You're welcome.
SIEGEL: One last point about the economy around here: 20 miles from Chillicothe in Piketon, Ohio, there is a long-stalled project to build a centrifuge plant to enrich uranium for energy. USEC, the U.S. Enrichment Corporation, needs a federal loan guarantee.
Ohio's Republican Governor John Kasich has asked President Obama to put that in the jobs bill. He says it would bring 4,000 jobs to the region. Ohio's Democratic Senator Sherrod Brown says he's fighting for the loan guarantee, too.
This is Robert Siegel. Transcript provided by NPR, Copyright NPR.