By Mark Peters And Ben Leubsdorf
DECATUR, Ill.--By one key gauge of economic health, this
industrial city three hours south of Chicago is well on the way to
recovery.
Hit hard by the recession, when its unemployment rate topped
14%, Decatur over the past year has seen one of the swiftest
declines in joblessness in the country, with the rate dropping to
7% in March from 10.2% a year earlier.
But look closer, and this city of 75,000 resembles many
communities across the industrial Midwest, where the unemployment
rate is falling fast in part because workers are disappearing:
moving away, retiring or no longer looking for a job.
"In cases like that, the unemployment rate makes things look
better than they really are," said Karl Kuykendall, U.S. regional
economist at IHS Global Insight. In terms of overall economic
growth, he said, "a decline in population and workforce is
devastating."
In many parts of the country, and at the national level, falling
unemployment appears to truly reflect recent improvement. The Labor
Department reported Friday that the U.S. jobless rate ticked down
in April to 5.4%, its lowest level in nearly seven years.
But the falling rate doesn't tell the full story of a recovery
that remains uneven nearly six years after the recession ended.
Among the 20 metropolitan areas where unemployment fell by at least
2.7 percentage points in the past year, 16 also saw their
workforces shrink over the same period, according to Labor
Department data. Half of those were in Michigan or Illinois,
including Detroit, Decatur, Flint, Mich., and Rockford, Ill.
Most places saw at least some hiring and job creation. In
Decatur, though, payrolls fell over the past year due to layoffs,
attrition, transfers or other causes.
"I think Decatur and [surrounding] Macon County are working very
hard, they just need a few breaks," said Michael Carrigan,
president of the Illinois AFL-CIO and former Decatur mayor.
Denny Ryder, 47 years old, wasn't looking to leave Decatur,
where he was born and raised. But he was laid off from a
Caterpillar Inc. plant here in late 2013 as the heavy-equipment
maker faced a slowdown in demand from mining companies.
So Mr. Ryder and his wife relocated to Winston-Salem, N.C., last
year where he found work at a Caterpillar contractor. While Mr.
Ryder was confident he could find a job in Decatur, he didn't feel
it would match the wages and benefits at Caterpillar, where he
worked for 19 years.
"I probably could have lost a lot of money and found a job in
Decatur," said Mr. Ryder, who has taken to life in North Carolina,
from enjoying the hills to swimming in the ocean for the first
time.
The fitful recovery in Decatur has laid bare challenges building
for decades in many places in the Midwest and Northeast.
Populations are shrinking, and the workforce is getting older. A
historical reliance on manufacturing has hurt aging industrial
cities as the U.S. economy continues its shift to service jobs. And
the recession expanded the share of the working-age population who
don't have a job and aren't looking for one.
In the Decatur area, the Labor Department's rough estimates show
falling unemployment, a shrinking labor force and declining nonfarm
payrolls. But the data don't explain why the workforce is smaller
and where the unemployed are going.
There are clues, such as the lunch crowd at the Good Samaritan
Inn, a soup kitchen where the Rev. Stacey Brohard is executive
director. He said many people lack skills or face other barriers to
jobs and have given up on finding work. The recession only
increased their ranks, he said.
People are moving out, government figures show. The Decatur
area's population fell 2.2% from 2010 to 2014, including a 1% drop
between 2013 and 2014 that was one of the sharpest among all metro
areas, according to Census Bureau estimates.
Kelly Hazenfield and her 10-year-old son moved from Decatur to
Chicago's outer suburbs a year and a half ago. She saw a work
opportunity not available here to help open a new hospital for
Centegra Health System, becoming its director of strategic
marketing and communications. There also was the allure of being
close to one of the nation's largest cities.
"It was very hard" to make the move, the Decatur native said.
"My parents are there; my 93-year-old grandmother is there."
Decatur's population skews older--the metro area's median age
was 39.7 in 2013, compared with 37.5 for the U.S. as a whole. Some
older workers were laid off or took early retirement during the
downturn but remained in the labor force, looking for work. Now,
with the stock market near all-time highs, their portfolios look
healthier and they feel more comfortable retiring for good, said
Ron Payne, a labor market economist at the Illinois Department of
Employment Security.
Decatur faces a dual challenge: getting older workers retrained
so they can extend their careers, and keeping younger workers from
moving away.
Richland Community College increasingly is concentrating on
people over 50 years old--many of whom haven't been in a classroom
in decades. City officials are courting young professionals in
moves such as banning trucks from downtown, promoting outdoor
dining and developing recreational opportunities around Lake
Decatur.
But Decatur isn't moving away from its brawny roots, which gave
birth to the NFL's Chicago Bears before they moved north--the team
started life as the Decatur Staleys in 1920, named after A.E.
Staley Manufacturing Co., a local maker of cornstarch.
Since the recession, the city has built a new water tower,
replaced sewer lines and cut the ribbon on a new freight-rail
terminal--all with the goal of retaining industrial employers and
attracting new ones.
"First, it's recovery, which is the phase we're probably still
in right now, but expansion eventually follows that," said Ryan
McCrady, president of city's economic-development corporation.
Write to Mark Peters at mark.peters@wsj.com and Ben Leubsdorf at
ben.leubsdorf@wsj.com
Access Investor Kit for Caterpillar, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US1491231015