The U.P. is having a harder time getting out of the recession than neighboring states.
And the new president of the Federal Reserve Bank region that includes the U.P. is making his first trip to the area.
Dr. Narayana Kocherlakota is learning why the way out has been tough.
In meetings with area bankers and business people he’s finding that the U.P. is different economically from the rest of the upper Midwest.
Those differences include a heavier reliance on mining than the rest of the region, and they may have slowed the recovery process.
National productivity has been heading back up for about a year now.
But job growth has not followed — unemployment is actually slightly higher than it was a year ago.
It may be a mismatch between unemployed workers and the available jobs.
The Fed says there’s not much it can do about that.
Dr. Kocherlakota says jobs are out there, but companies are having steep trouble finding the kinds of employees they need.
And folks who are out of a job are having more trouble than usual finding positions that match their skills.
He says while the stimulus bill created a situation where manufacturers were willing to start hiring again, the Fed doesn’t have the ability to transform construction workers into industrial workers.
The purpose of the trip isn’t just to let people know what the fed is up to.
The visits also give people a say in what the fed is doing.
Dr. Kocherlakota says because the central bank system is so decentralized — there are 12 Fed districts — that allows for the presidents of each branch to travel the districts and find out first-hand what’s going on economically.
And that’s what he’s doing right now.
He says there is some good news for the U.P.
He says global demand for raw manufacturing materials, like iron ore pellets, is going back up.
And that will mean more jobs.
He thinks that will take place in about another year to year and a half.