A look at the local impact of the turbulent economy
How much fear do people have about the state of the economy in Minneapolis?
Depends who you ask.
Whereas nationally fear is high over the economy and talk of a United States recession is fairly frequent, most people in the Twin Cities are feeling pretty safe.
Research by Moody’s Economy.com recently showed Minneapolis-St. Paul as one of not many metropolitan areas that are not yet experiencing a recession. Two-thirds of the nation’s metropolitan areas are in a recession, according to Moody’s, including such Midwestern cities as Indianapolis, St. Louis, Milwaukee and Chicago.
The Twin Cities, on the other hand, are only “at risk for recession,” good news by comparison.
Research by Minneapolis’ Department of Community Planning and Economic Development shows job growth in the health-care, hospital, manufacturing, management and education industries. While there were 121 fewer jobs at the end of 2007 than there were in 2006, other years have been worse for Minneapolis. At the end of 2002, there were 11,043 jobs lost.
Meanwhile, the city’s population is growing. Architectural firms, advertising agencies and accountants are moving their business out of the suburbs and into the city. Coloplast Corp., a Danish medical company, is about to open a 500-employee campus on West River Parkway.
City representatives also point to the strength of the financial institutions located here. The troubles of such industry giants as American Industry Group (AIG) and Lehman Brothers were seen as the tipping point of the recent economic crisis. But Minneapolis is home to Wells Fargo — which is growing with the purchase of Wachovia — and US Bank, the seventh-largest bank in the country.
Of course, there are problems. Housing values are down and foreclosures are up across the city. Unemployment is rising, and family homelessness is 26 percent more prominent than it was a year ago. With people’s discretionary spending down, restaurants and stores have been negatively impacted and been forced to close.
But the city sees itself as fairly well prepared, putting an emphasis on green jobs, something Mayor R.T. Rybak foresees as one of the next big growth points in the economy.
“We don’t know — and I don’t think anybody knows — exactly where the economy is going to go in the one to two to five years,” Rybak said at an October briefing on the economy. “But we do know that this region, especially the city of Minneapolis, is doing as well as can be expected.”
Nonprofits face lean times
Seeking donations is never easy work, and it’s about to get a whole lot harder.
At least, that’s what arts and social services nonprofits are anticipating as fear of recession spreads and losses in the stock market pound investors. Individual donors, foundations and endowments likely will have less to give in the coming months or years.
The Bridge for Youth in Lowry Hill, which operates an emergency shelter for homeless youth, had already gone through a round of belt-tightening since 2003, when state funding for human services dropped off, Executive Director Tim Reardon said. Then, Hennepin County, which provides a third of the funding for the shelter, proposed to reduce its contribution by about 2 percent beginning in 2009.
Now, in the midst of a home foreclosure crisis, demand for the center’s services is “skyrocketing,” Reardon said.
“It is a tsunami that we’re getting hit with, and we have just seen the first wave of it,” he said. “We have not experienced the full aftermath [of the economic meltdown], and it’s going to be a struggle.”
At Victor’s, the glass of mango juice is half full
Even in hard times, people will go out occasionally for a meal.
That’s the way Niki Stavrou, owner of Victor’s 1959 Café at 38th & Grand, sees it.
“I think that even though people are feeling the need to cut back in their spending that they still need to treat themselves once in a while,” she said.
Business at the Cuban restaurant has been better than usual lately thanks to a recent spot on the Food Network’s Diners Drive-ins and Dives.
Stavrou doesn’t expect the hype from the show to last forever, though. She said Victor’s has been refining its menu and streamlining its operations to make things run as efficiently as possible. The increasing cost of food and energy has made running the business more expensive in recent years, she said, but she doesn’t want to make up for the expenses with overpriced food.
“That’s been something I’ve worked on really hard,” she said. “Even with the food costs rising and energy rising, I try to keep my prices as low as I possibly can.”
Stavrou said the economic situation is troubling on a personal and professional level, but she’s trying not to worry about it.
“Our outlook is optimistic,” she said. “That’s all we can try to be is optimistic. We try to keep putting out a good product and treating our customers well and hope that they’ll keep on coming back.”
A bit of help from the city
Businesses and individuals challenged by the current economic climate can find help from the city. Here are a few options:
• Dislocated Worker Program: The city offers help to qualified individual workers who lose their jobs due to layoffs and need help finding or transitioning to a new job. Services include career counseling, updating skills, and job-search assistance. Call Catherine Christian, 673-6230. For more information, go to www.ci.minneapolis.mn.us/cped/metp.asp.
• Library workshops: Several Minneapolis libraries also offer workshops on searching for jobs, writing resumes and other related topics. Search “employment” at www.hclib.org/pub/events/AllEventsAction.cfm.
• Minneapolis business assistance: For Minneapolis businesses, the city offers a list of local agencies and associations that provide financial assistance, networking opportunities and business advice. Go to www.ci.minneapolis.mn.us/cped/docs/loans_and_grants.pdf. For information about city finance programs for businesses, go to www.ci.minneapolis.mn.us/cped/business-finance.asp, or call Bob Lind, 673-5068.