THINGS ARE SO good in Sioux Falls, S.D., that the unemployment rate is down to about 3 percent and it`s hard to find a vacant apartment.
Things are so bad in Iowa that farms and banks are failing at rates unknown since the Depression.
Things have about bottomed out in Michigan, where the auto industry is thriving again after its worst slump in memory. Even with two years of sharp growth, though, the state has been left with 9 percent fewer jobs than it had in 1978.
That was the picture across the Middle West as 1984 merged into 1985: a landscape generally as bleak as the fallow winter fields, with a few pockets of prosperity, some areas of real hardship and a feeling that the recent national recovery was not all it could have been.
NOT THAT the Midwest didn`t benefit from the recovery. George Cloos of the Federal Reserve Bank of Chicago says employment in his five-state area
–Illinois, Iowa, Indiana, Michigan and Wisconsin–is up 3.6 percent from December, 1982. However, Cloos said, this pales beside the national job-growth rate of 7.3 percent in the same period, especially considering that the region was badly off when the recovery began.
Even within the region, performances varied, however. Michigan reported 6 percent job growth, Wisconsin 5.2 percent and Indiana 4.1 percent. Illinois had only 1.6 percent job growth, and hard-hit Iowa`s growth was only 0.8 percent.
Bright spots are hard to find, but they`re there. Michigan, perhaps the most battered state in the nation during the recession, is bouncing back on the basis of its expanding auto industry. Statewide surveys show consumer confidence increasing, and high technology, aided by the state`s vigorous universities, has gained a foothold.
THE TWIN Cities of Minneapolis and St. Paul have ”a very thriving economy, with a stronger than average recovery,” according to Michael Stutzer of the Federal Reserve Bank of Minneapolis. ”The economic base here is quite diversified, with a lot of high technology. We weren`t slowed down by older, heavy industry.”
As a result, unemployment in the Twin Cities is only about 5 percent, and there is a boom in office construction in downtown Minneapolis.
In Sioux Falls, changes in state laws have lured in such back-office businesses as the Citibank Visa and MasterCard operations, a New York transplant.
IN KANSAS, Wichita is making use of its high-tech base to fight back from a slump in its dominant small-plane industry, but much of the rest of the Plains states is suffering from slumps in both energy and farming, according to Tim Smith of the Federal Reserve Bank of Kansas City.
Nor is the outlook very bright, Smith says. Continued declines in world oil prices are likely to put downward pressure on U.S. natural gas prices, he says, and farming, which was artificially buoyed in 1984 by government payments through the PIK (payment in kind) program, will probably see income fall this year.
This farm slump has spread to the towns and banks that farms support.
”Although 1984 brought higher net farm income to an austere rural economic landscape, for most farm communities there was little or no recovery from the prolonged farm recession,” a year-end report by the Kansas City Fed said.
”Businessmen in rural communities saw farmers cut their discretionary purchases. Farmers also sharply curtailed their purchases of capital goods, such as tractors, combines and farm buildings.”
WITH A SLOWDOWN in national economic performance expected this year, even the weak Midwestern results of 1984 are not likely to be matched in 1985, it said.
The Middle West has a higher proportion of heavy industry than the rest of the nation. With this industry, especially steel, still in the doldrums, the major industrial centers such as Chicago have lagged behind. A recent report by the Commercial Club of Chicago concluded that most of this industry was gone forever, and it urged the city to seek new industries to support itself in the future.
The Commercial Club urged Chicago to capitalize on such booming areas as finance and health services and products, but the Chicago Fed`s Cloos says increasing automation is cutting back job opportunities in banking and finances and that even major drug companies in the area are laying off workers in the wake of moves by the government and big business to control medical costs.
OF ALL THE states in the region, perhaps Iowa has been most severely wounded. Cloos blames this on the importance of farming to the state`s economy. Farming has been crippled by four years of falling prices, increasing costs, foreign competition for exports, high interest rates and decreased land values.
Corn and soybean prices are predicted to stay low, partly because of bumper crops around the world, but livestock prices could edge upward.
This depression on the farm has also spread beyond the farm towns to the larger Midwestern cities such as the Quad Cities, Waterloo or Peoria, where industry ”is directly concerned with the prosperity of the farm sector,” he said.
These older small cities, like Chicago and other major manufacturing cities, are burdened with aging factories and high wage rates.
Cutbacks in meatpacking and the year-end announcement that J.I. Case Co. wnte outlook for the five-state region around Chicago is poor, Cloos says. Farm prices are expected to be lower this year, he says, and much of the industry that is propelling the rest of the country–high tech and defense work, for instance–is notably absent from this area.
THIS MEANS that, even with continued recovery, it will be 1988 or later before the area returns to the number of jobs it supported 10 years ago, a Fed outlook said.
”Important industries, especially farm and construction equipment, are consolidating facilities to reduce excess capacity, having concluded that no significant revival in demand will occur for several years at least,” a Chicago Fed report said.
of the economic situation, cited by the Chicago Fed, is more migration from the Midwest to warmer parts of the nation.
Between the 1980 census and mid-1983, the total population of Ioonsin and Michigan dropped by about 100,000. Because there were approximately 800,000 more births than deaths in the region, there was an emigration of about 900,000, many of them looking for st 400,000 people, Illinois, 210,000;
Indiana, 130,000; Iowa, 70,000; and Wisconsin, 60,000.
