GWEN IFILL: How has the recession transformed the jobs picture here in St. Louis and in the Midwest generally? We get an assessment from William Emmons, assistant vice president and economist with the Federal Reserve Bank of St. Louis.
Tony Thompson, president and CEO of the Kwame Building Group, a construction management company.
Michael Holmes, executive director of the St. Louis Agency on Training and Employment.
And Ellen Sherberg, publisher of the St. Louis Business Journal.
Thank you all for joining us here.
William Emmons, just when it comes to jobs, how are things looking in St. Louis?
WILLIAM EMMONS, Federal Reserve Bank of St. Louis: The national economy was slow growth through most of this decade. St. Louis and the Midwest was even slower. In fact, we’ve had very little job growth over the last few years. The recession has just caused us to start losing jobs now.
GWEN IFILL: And what has been the — you say the recession, but certainly there are elements of the recession which drove particularly the job loss.
WILLIAM EMMONS: Right. We’ve been hit hard by manufacturing, all sorts of service industries. It’s really across the board with very few exceptions.
GWEN IFILL: Tony, you work in construction. You run your own company. Tell us a little bit about how it’s trickled down, particularly to your business.
TONY THOMPSON, Kwame Building Group: Well, it’s interesting. In my business, because we’re in construction management arena, it’s all — because mostly the construction companies are starting to lay off people because of the lack of funds drying up, loans. A lot of projects have been put on hold or delayed.
But from a management standpoint, we’re involved with the planning stages of a lot of projects, and we really haven’t seen the type of slowdown in our industry.
GWEN IFILL: So does the stimulus package that’s being talked about in Washington, does it trickle down to you at all?
TONY THOMPSON: Yes, it does. Transportation is a big — an important area in our business, airports, wastewater treatment facilities. And there seems to be quite a bit of activity taking place around transportation and airports. And actually we’re seeing some growth in our industry.
Larger budget for job training
GWEN IFILL: OK, Michael Holmes, unfortunately, there's probably growth in your industry, too, when it comes to job training. How much?
MICHAEL HOLMES, St. Louis Agency on Training and Employment: Oh, we are seeing 50 percent and more people looking for training. We are putting 41 percent of our budget now in training dollars starting in July, because of the fact there are not a lot of jobs out there, and so we need to retool individuals.
And one way to do that is to give them training opportunities to go into new training programs and longer training programs. And in order to do that, we have to pay for that, because all of our services are free.
GWEN IFILL: So who are the people who are coming to you and asking for training? Are they people who are chronically unemployed? Or is it a different kind of clientele?
MICHAEL HOLMES: We're seeing it all. We're seeing now a lot of professionals in the I.T., professionals in financial services, manufacturing. Our area is known for tourism and travel. We're seeing a lot of people being laid off in that industry.
So we are now looking at training whoever. The picture is looking different. Where it was the unemployed and the individuals that never had a job, we're seeing midlevel managers, and managers, and vice presidents with huge salaries being laid off that we're not used to dealing with, so we have to change the way we do business.
GWEN IFILL: Ellen Sherberg, I want to ask you this, and also Bill Emmons, but starting with you, how different or how similar is what's happening in St. Louis on the job front to what's happening in the rest of the country?
ELLEN SHERBERG, St. Louis Business Journal: I think it's probably very similar in St. Louis, because it's everywhere. It's not one segment.
And, you know, in the past, it was, you know, maybe the dot-coms that were feeling it or the tech people. So St. Louis missed some of that, because we weren't so high-tech to begin with. Now St. Louis, I think, mirrors everybody's problems.
GWEN IFILL: So which industries in particular do you look at, when you think of St. Louis and you think to yourself, "This industry, St. Louis is particularly hard-hit because" -- I don't know?
ELLEN SHERBERG: Whatever industry you look at, Gwen.
GWEN IFILL: Auto industry?
ELLEN SHERBERG: Auto industry, we've got Chrysler and G.M. layoffs, or furloughs, soon to be layoffs. Beer, we have Anheuser-Busch layoffs.
Shoes, you know, it was first in shoes, first in booze, and last in the American league? Well, we don't play in the American League any more. We're playing -- our baseball team is doing all right, but shoes, we've got Macy's, which bought May, so there were layoffs at May, and then Macy's closed their regional distribution center here, and there were more layoffs. It's everywhere.
GWEN IFILL: When you look at this, Bill Emmons, and compare economically not only the jobs picture, but just in general, how is St. Louis doing when you compare it to the rest of the country?
WILLIAM EMMONS: It's a weaker economy even in good times, but it's been hit hard. And I think the areas Ellen talked about, definitely manufacturing. We used to be above the national average, and that has been hit pretty hard.
Also, professional and business services. So, for example, banking, used to be a regional headquarters for banking companies, and there's not as much of that here as there was in the past.
Credit crunch is a factor
GWEN IFILL: What is the responsibility of the federal government to speak to the particular issues, the specific issues which are -- problems which are afflicting St. Louis and towns like St. Louis?
WILLIAM EMMONS: Well, I suppose creating the climate for job growth is the most important thing. You know, at the Federal Reserve, we're focused on trying to stabilize the financial system and create those financial conditions that can support jobs from whatever sector it might be.
GWEN IFILL: Does the credit crunch have a particular affect? I mean, people think about their credit cards and people think about lack of access to mortgage money, but is it -- does it trickle down or does it have an effect, an impact in other ways?
WILLIAM EMMONS: Well, absolutely. Credit standards have been tightened by lenders. Even though we didn't have a big housing boom in terms of prices here, credit conditions and mortgage markets are very tight here, as elsewhere, across the entire spectrum, from the high through the middle to the lower end of the market.
GWEN IFILL: I want to go back to the housing piece or to the construction piece, because I wonder, Tony, whether the housing boom, which was the reason for so much prosperity, and then the reason for so much pain later on, has had a particular effect in St. Louis in a way that you've been able to see through your work?
TONY THOMPSON: Well, yes, it has, because in St. Louis a lot of people considered overbuilding. We built a tremendous number of condominiums. We had a rebirth of our downtown. There was a huge construction boom. And we've had probably better than average construction for the last 10 years.
And most of the major companies who have profited and benefited from that are starting to take a small hit, but the small businesses, where the stimulus has come in has become very helpful.
Most small businesses in St. Louis are not minority, but most minority businesses are small. And so the stimulus package, if it's dealt with properly, will continue to keep the small businesses alive, because if we employ 90-something percent of the jobs in the community, it's very important that the small businesses continue to flourish, and the stimulus is the only way we're going to be able to continue the growth that we're seeing.
Dispensing stimulus funds
GWEN IFILL: Now, St. Louis didn't get a lot of the stimulus money. The state got 143 projects, and St. Louis didn't get that much.
TONY THOMPSON: That's correct. They did not get that much. But most of the St. Louis construction companies do work throughout the entire state. So even though the construction may not take place in the St. Louis area, the companies that live and operate out of St. Louis will be participating in those out-of-state projects.
GWEN IFILL: How about that, Ellen Sherberg? Is there that much of a connection between what they decide to do in Washington on things like stimulus packages and what happens here? Or is this something which the city, the region has to plow ahead and wait on Washington to play catch-up?
ELLEN SHERBERG: Well, you know, it all goes through Jeff City. Jeff City's our state capital. So the stimulus money, the majority of the federal money, comes through the governors. Having a good relationship with the governor is a good thing these days, I think.
GWEN IFILL: Is there a good relationship with the governor?
ELLEN SHERBERG: I think not.
GWEN IFILL: Not so much here?
ELLEN SHERBERG: It could be better, let's say.
GWEN IFILL: Tell me some more about that.
ELLEN SHERBERG: Well, I think that we'd have more money if there were perhaps a better relationship.
GWEN IFILL: Because it's Republican governor and a Democratic city?
ELLEN SHERBERG: No, it's a Democratic governor and a Democratic city.
GWEN IFILL: That's right. And it's still not so good?
ELLEN SHERBERG: But I think there are also problems at the state level between the Democrats and the Republicans in the legislature. So to be fair, the governor, I think, got out ahead of the stimulus package, and his hands are tied by his Republican lawmakers. It's tough.
Finding new careers, solutions
GWEN IFILL: Michael Holmes, when you talk to people and when you counsel people about how to get back into the job market, what kinds of jobs are there out there? Or are there any? Which kinds did you lose and which kinds are you hoping to get back?
MICHAEL HOLMES: Well, there are some out there. We are seeing -- manufacturing, again, took a big hit. I.T. took a big hit. But there are some I.T. that are rehiring, not at the large number that it used to hire, where one I.T. company had 10 people. Now the whole I.T. may be four people.
So we're telling people to really look at new opportunities. For instance, if you were in manufacturing, do you want to go back in manufacturing? Or do you want to look at a whole new career in a whole new area? Now, what that new area is, is based on 5 to 10 years out.
GWEN IFILL: How do people respond when you give that advice, say, "Forget everything you knew, try something new"?
MICHAEL HOLMES: Well, it's hard, it's hard, because their whole livelihood has stopped, you know? And we're telling them, again, you know, some of these people did everything right. You know, they went to school. They got a good job. They provided for their family. And the economy turned this way.
And I tell them, it's not them. It's probably the business owners who are not taking risks as much as they used to take risks. When the economy started faltering, then business started saying, "Whoa, let's hold up. We're not going to hire."
They used to hire individuals based on projection. "Well, we're going to make money in next quarters." Now they've stopped that to say, "Well, maybe not. Maybe we just need to hold our horses."
So we're trying to get individuals to really get the skill. And we'll help them be marketable. And hopefully, when the economy turns around, they have a new skill that will get them into a job market and a career in this region. And we have to determine what that new job -- what those regional jobs will be for this region.
GWEN IFILL: Bill Emmons, when you look at this and you think about the fundamentals, the underpinnings of this problem, do you think that the -- when you start to prioritize, what has to be addressed first, the credit issues, mortgage assistance issues which are intertwined, education? What are the underpinnings that need to contribute to any kind of recovery?
WILLIAM EMMONS: Certainly, at the national level, the financial system has to be stabilized. I think also there's not really a good option for policy, but the housing markets have to stabilize. Education certainly is part of the answer further down the road, but I think, in the very short term, it's certainly the financial system and the banking system that needs to be stabilized.
GWEN IFILL: Well, that sounds like the entire solution is in Washington.
WILLIAM EMMONS: Well, certainly some of it has to be. But I think there are many banks and other financial firms around the country that are run well, conservatively, that are strong, that will come through this and will probably identify opportunities that come out of this.
But, yes, we are dependent on some major players in Washington, New York, and other places to get the system on a firm footing to go forward.
GWEN IFILL: OK, Bill Emmons, Tony Thompson, Ellen Sherberg, Michael Holmes, thank you all very much.