Iron Range economic imbalance, in one graphic

irrrb service area

I’ve already written at length about the recent report by the Minnesota Office of the Legislative Auditor. That document details serious management and governance problems at the Iron Range Resources and Rehabilitation Board (IRRRB).

Today I’d like to talk about an aspect of that report that paints a broader picture of what ails the Iron Range. Specifically, I’ll analyze a highly useful graph included in the report.

For years I’ve been talking about how the Iron Range is still perceived as a mining-dominated economy when in actuality most people who live here actually work in health care, service, and retail jobs. I based this on two factors: A) some crude back-of-the-envelope math involving state employment figures for our three regional centers of Grand Rapids, Hibbing and Virginia, and B) the experiences of my peers and my large extended family on the Iron Range.

Mining jobs are among the region’s very best. Yet mining employment is not as widespread as when more than half the able-bodied men in the region worked for the Oliver or Hanna mining companies two generations ago.

One of the first problems in determining the true Iron Range economy is in defining “the Iron Range.” This question is as much cultural as it is geographical. Some view the borders as tightly fixed around towns located along a southwest to northeast line from Coleraine to Babbitt.

However, the Iron Range is legally defined in the map seen at the top of this post. This Taconite Assistance Area is how the IRRRB determines eligibility for economic development spending and how the state calculates tax relief for people in communities affected by mining. The economic problems of the Iron Range are relevant throughout this region.

What the Office of the Legislative Auditor did in their report was break down the data in this specific, weirdly-shaped area to paint a simple, concise picture of the proportion of employment by industry.

This is the graph I’ve been seeking for a long time.

Iron Range Employment Proportions

The most obvious difference between the Iron Range employment spectrum and that of the whole state is the presence of mining jobs. Boom. Right there in the middle.

But by viewing this in graphic form, we see several key points in the employment proportions.

  • Mining is a significant part of our local economy, but barely registers within the state at large.
  • Indeed, as I’ve suspected, half the Iron Range employment is in retail, service or health care fields. This is a higher percentage than the state as a whole.
  • Health care is a bigger portion of the Range economy than that of the state at large. I would suggest this has to do with the older demographics of our region, and the fact that the region has maintained several large health care facilities despite population losses.
  • “Other” is hard to define. Could be good stuff, cheap stuff. Who knows? But for argument’s sake, let’s call it “the ether of a diverse economy.” Obviously, the rest of the state has more of it than we do. Even if you add mining to our “Other” (which is fair) it’s still smaller than the state’s proportion. (UPDATE: See note at bottom for updated explanation of “Other.”
  • The Iron Range has a smaller manufacturing base than the state overall.
  • The Iron Range has a bigger share of government jobs than the state as a whole. There are many potential political theories for this. I’d tend to argue that this is because we have a smaller population but a large land mass. We are also a region of many small towns, without a centralized hub of government. That leads to duplication.
  • The only sector that seems to hold the same proportions in both the Iron Range and the state is education.

This is your Iron Range employment economy. Not how it might be if something happens. Not how it was. This is, quite simply, how it is. We are tilted toward jobs that either don’t pay very much or that are found in highly volatile industries. A bad economy and a major cut to government jobs (which often go together) would knock us down hard, even harder than we got knocked down this last year.

In saying all this out loud, it seems hard to believe anyone who actually lives here year-round would be surprised by these findings.

Business North recently published a story about economist Toby Madden, who spoke Tuesday at the Regional Economic Indicators Forum in Duluth. Madden warns that the cautiously optimistic news out of the mining industry this month belies an important truth: there will be fewer mining jobs over time.

As economists traditionally have argued, tariffs will not spare the mining and steel industries from cheap foreign imports in the long run, Madden predicted.

“We might get that short term juice from those tariffs and say ‘Alright. We’re saved.’ But down the road, five years from now, we’ll see that mining is a smaller sliver of the overall economy. Things are changing, and not just in iron ore, steel and mining. Things are changing at a rapid pace,” he said. “Be prepared for the mining industry to be a smaller portion of the economy.”

At the core of this trend are three points, Madden said. The workforce isn’t growing because birth rates are stagnant. That also feeds into the fact that the federal government will begin to run out of money for social programs and benefits. Finally, interest rates are due to rise, which will slow the kind of madcap growth that our economy has favored in recent decades.

“Be ready for change. Stay on top of all the trends,” Madden advised. “Businesses should diversify. If you’re heavily dependent on mining, you might want to broaden your range a bit.”

That’s what I’ve been saying.

You can support or oppose mining. I argue that the people who live in Northern Minnesota have virtually no control over what happens in the mining industry. Your opinion on mining is just one tiny, secondary data point in a complex corporate equation. Demand, pricing and cost are far more important parts of that equation.

What matters most to the long range health of the Range is whether or not we succeed in balancing our economy. With or without mining, an imbalanced economy will disappoint and repel the next generation of the Iron Range.

UPDATE: One of the biggest sources of speculation in the very spirited comments section on this post was the nature of the “Other” designation of this OLA graphic.

Jody Hauer, project manager of the IRRRB report for the OLA, read the post and contacted me with more information. Hauer writes:

Many of your commenters were speculating on what the “other” category contains.  The attached data show these 13 other sectors, which include construction, finance and insurance, and transportation and warehousing sectors.  Each of these industry sectors represents 5 percent or less of total employment in the Taconite Assistance Area.  Together, these 13 sectors account for 27 percent of employment in the Taconite Assistance Area for 2014.

For the report, “Other” includes Manufacturing, Construction, Finance and Insurance, Other Services (not public administration), Administrative and Support and Waste Management, Transportation and Warehousing, Arts, Entertainment and Recreation, Wholesale trade, Professional, Scientific and Technical Services, Utilities, Information, Real Estate, Agriculture, Forestry, Fishing and Hunting, and Management of Companies and Enterprises.

These same categories are found in the state as a whole. The biggest difference I saw? “Professional, Scientific and Technical Services” is at the top of the state’s “Other” list, but near the bottom for the Range.

Also “Other” is 27 percent of the Range employment picture, while about 41 percent of the state’s proportion.

Comments

  1. If I was to guess what makes up the “other” category, one option would be business to business services. Ad agencies, printing companies, web development firms, search marketing firms, PR firms, ISPs, accountants, etc.

    These are often good paying jobs requiring some post-secondary education or specialized training. Many of them can be done from anywhere, though they do tend to congregate near major clients.

  2. Ranger47 says:

    If the “mining” category of the IRRRB Service Area chart goes to zero as some would prefer, the “other” category would inherently grow and probably exceed that of the Minnesota chart. Then we’d all be diversified, fat and happy?
    I can hardly wait…

  3. Actually it wouldn’t. That’s my point. Even if you extrapolate the rest, which would increase the size of all categories, it wouldn’t reach the same proportion of “Other.”

    • Ranger47 says:

      Oh really? On what economic basis do you “extrapolate the size of all categories” equally Aaron? That’s a simplistic and statistically false assumption. Fits your narrative nicely, but it’s false..

      • Dammit, Bob, do you even read your own comments? You just said that if you took mining out there that would be how “other” got bigger. And if you’re looking at proportions that’s true. If I have a boat with a doctor, a plumber, a teacher, a football player and an engineer, the proportion is 20 percent doctor, 20 percent plumber, 20 percent teacher, 20 percent football player and 20 percent engineer. If an alligator jumps up and eats the engineer we have 25 percent of each instead. The raw numbers didn’t change, but as a PROPORTION — which is what this graph measures — the numbers change. My point is that if you extrapolate what would happen in removing “mining,” the “other” would get bigger but still would lag the state as a proportion of total population. Which is the point. I don’t even think we’re arguing about a real topic, I think you’re just poking buttons.

  4. Ranger47 says:

    Surely you know Aaron, iron mining pays hundreds of millions in taxes to the IRRRB Area. No other “category” comes close to that.

    More importantly, mining is the heart of the region’s economy, accounting for over 30% of the Gross Regional Product. It drives all other categories. In comparison, the tourism industry and forestry is around 10% each.

    Each good paying iron ore mining job provides much cash for people to spend, health and retirement benefits and generates an additional 2 jobs in other industries in the area.

    If mining shrinks, other categories will shrink twice as fast (look around). The only exception might be health care and social services…and “Other”, assuming what’s in “Other” isn’t mining dependent (which is what you’re assuming).

    • Yes, mining jobs are among the best. I say that up above. And yes, mining produces a big GRP for the region, but most of that money leaves the area. Some stays, but a pittance in the big picture. Fee holders, mining companies and steelmakers realize the profits. The only money that gets into the community comes from miners salaries (which are great, but with only ~3K to ~4K miners, not as much as the old days) and whatever is spent on vendors/contractors, again most of the benefits via workers, not reinvestment. Plus when mining is down that GRP is jack nothing, which disrupts everything. Again, I’m not saying something new and I’m pretty sure you know that. I’m not arguing against mining, Bob, only that our economy is badly imbalanced. It is badly imbalanced, as I’ve described.

      • Gray Camp says:

        Essar is potentially for sale. Maybe we should make a “Miners Cooperative” where all of us Iron Rangers form a non-profit venture to pool our money & buy the place. That way we can realize all the profits (or losses) from the thing – rather than some “big greedy corporation” and the profits (if any) can first go towards putting in a steel plant at the site (to increase our profits (or losses) and second towards diversifying the range. Doubtful we can pull the necessary $Billions together, but stranger things have probably happened.

        • An idea like that cropped up back when LTV closed in 2001. Yeah, the problem is the “B” in front of the “illion.” 🙂 It would appear that Cliffs is the primary bidder on Essar right now, and that’s probably a good thing in terms of actually opening the plant. I only worry that with a newer plant opening at Nashwauk that other Range mines would then be vulnerable for closure the next time the prices drop again. But strange things do happen all the time, as you say.

  5. Totally not arguing against the need for diversification or that mining is a much smaller part of the economy than it was … but, is it possible that the “other” in the graph for the Iron Range possibly includes vendors that are mostly related to mining? For example: Lakehead Constructors, NBC (belt services), Ziegler, etc, those types of businesses? They aren’t really “retail”, they’re not “manufacturing”, and they’re not a “mining” company, but they are very mining-related. Only change would be that true “other” would even be smaller … Just wondering where those vendors / related industries are in this information.

    • I wondered the same thing, Amy. It doesn’t make that clear. Some might be manufacturing, some would be other. Some could even be service related. What I take away is that the black stripe shows the minimum we rely on mining, while the actual impact is probably much higher.

    • Independant says:

      You nailed it Amy. The folks I work with every day are not considered “Mining” employees yet they get 80%+ of their annual wages from projects or services preformed for mining companies. Just look up and down any street in the evenings and see how many vender and contractor vehicles for the companies you mentioned and others that we see. Now realized that for every foreman or supervisor driving a “company” truck he typically has another 5-20 people that work under him that don’t commute in a “company” vehicle and don’t show up on any graph as a miner. The total number in our communities is much larger than perceived by many.

  6. Ranger47 says:

    It’s very clear. “Other” includes:

    Automotive repair and maintenance
    Electronic and precision equipment repair and maintenance
    Commercial and industrial equipment repair and maintenance
    Personal and household goods repair and maintenance
    Death care services
    Personal, laundry and dry cleaning services
    Religious, civic, labor, political, social and other professional organizations (personally, I don’t think labor and political organizations are very professional)

    • Some of those strike me as services. I think we could all play a very fun game of naming things not listed and making political points off them. But there is no doubt that our economy is unbalanced and vulnerable to losses, particularly as mining slows down over time as most analysts predict.

  7. Ranger47 says:

    My experience is the same as yours Independant…a very high number of my friends and neighbors are reliant on the mining industry for their livelihood. I think it’s much larger than what the Labovitz School of Business and Economics at UMD says, which is 2 jobs for every one mining job. When the mining industry sneezes…many, many other jobs on the Range don’t catch a cold, can’t survive and die.

    And no one I know is against diversification, most all embrace it. What they’re tired of is folks bashing mining without offering real job alternatives.

    • Independent says:

      Absolutely agree with you that diversification is needed. But all too often some anti mining folks use the cloak of diversification to inject doubt into supporting new mining projects as if you cannot have an all of the above approach. That logic is very disappointing.

      • OK, guys. I’ve got one thing to say before beddy time. Sometimes it’s not about mining. When people get passionate about building a community in our towns, sometimes they don’t care much about mining. When people want a cultural scene, recreation, tech jobs and infrastructure — sometimes they don’t want to pay any lip service at all to mining. And you know what, they don’t have to. Maybe they even don’t like mining. That’s fine.

        One of the things I’ve observed over the last several years is the hair trigger sensitivity of some associated with the mining business. Which is funny because for the people who run the companies it’s a pure numbers game, total emotional detachment.

        Oh, the greens are sensitive, too, to be sure. But if you’re upset that someone who supports the abstract concept of diversification opposes mining, you should acknowledge that sometimes those who support the abstract concept of mining opposes things that others support, too. There are miners who don’t care much about sustainable energy, bike lanes or community gardens — maybe they think those things are bullshit. Maybe they vote for a city councilor who opposes those things. And you know, that doesn’t mean much about mining. Because economic diversification goes hand and hand with diversity of thought. That means we’re going to have to get used to the fact that some people support or oppose mining, support or oppose high speed internet projects, support or oppose bike lanes. And until we can allow people to honestly debate these things without calling into question whether they are “enemies of our way of life” we won’t have economic diversification or any hope of balancing our lopsided, vulnerable economy.

        • Ranger47 says:

          Sustainable energy, bike lanes, community gardens and internet projects are not “economic diversification” projects. They are projects requiring public (the peoples) money. And they can only come about if people have a job…mining or otherwise. People supporting or opposing those projects aren’t supporting or opposing economic diversification. They supporting or opposing how our tax money is spent.

          If someone, including you Aaron, wishes to build and/or sell sustainable energy go for it. If you wish to build bike lanes and sell those or make a living charging people to ride on them, more power to you. If you wish to build and sell community gardens, great. You won’t find anything but support from the community. BUT, if you want to use someone else’s money, personal money or tax money to do so, they have every right to be for or against it.

          That said, go for it. Start a business!!

          • Help me understand the difference between spending the public’s money to hire people to build things like bike lanes and high-speed internet capacity is bad.

            It’s not like tax money isn’t going to subsidize the mining industry, so I’m having a hard time understanding what’s different about this.

  8. Independent says:

    I think an economic diversification movement would be best served with a positive focus on new projects, ideas, industries, etc. without the reflexive negative comments about mining. I don’t personally believe that we have to be in the “mining” or “everything else” camps. Why don’t we as a community unite around a “mining and everything else” strategy. I think we would achieve much more progress working together.

  9. I think in regards to “Other” for the rest of Minnesota – Farming/Agriculture makes up a large slice of that segment. The only reason I can think it is not it’s own slice is because large scale farming/ag doesn’t really make sense given the land & geography specific to the Range.
    And… there’s some pretty traditional differences between farmers and miners.

    • That’s an interesting point, Marje. I check out the labor statistics and they don’t have a good number of total agriculture employment. I imagine that’s because of the seasonal, transient nature of the industry. But if you add up the parts they do track I don’t see the kind of numbers that would swamp the “Other” category statewide. Like mining, farming is more mechanized and can maintain world class production levels with far fewer workers.

      I really didn’t want people to read too much into “Other” because the graph doesn’t properly describe what it is. I mean only point out that in the abstract, our state’s relatively successful economy has a bigger proportion of “other” than our relatively unsuccessful regional economy — even if you add Mining to “other.”

      • Ranger47 says:

        Wrong Aaron..the labor statistics for agriculture (both crop and animal production), including support activities, are very clear for Minnesota. They total 21,115 people for 2015 and represent 19% of the 110,488 people in the “Other” category.

        • OK, that’s a plausible number (you must have found the numbers for farm laborers, etc., which eluded me). But not really that big when you consider how big an area agriculture covers in this state. And again, are we talking about the same “Other” as the “other” from this graphic? I think we could argue this to death while confusing the main point I was trying to make. At this point are we even talking about the same thing? I don’t think so.

      • I saw an article during the last census, that farming/ag isn’t even an option for people to select as their employment anymore. Maybe that change on the census changes this graph.

  10. You’re correct Aaron, we got side tracked. What we’re talking about is the following:

    Sustainable energy, bike lanes, community gardens and internet projects are not “economic diversification” projects. They are projects requiring public (the peoples) money. And they can only come about if people have a job…mining or otherwise. People supporting or opposing those projects aren’t supporting or opposing economic diversification. They supporting or opposing how our tax money is spent.

    If someone wishes to build and/or sell sustainable energy go for it. If they wish to build bike lanes and sell those or make a living charging people to ride on them, more power to ’em. If they wish to build and sell community gardens, great. You won’t find anything but support from the community. BUT, if they want to use someone else’s money, personal money or tax money to do so, we have every right to be for or against it.

    That said, go for it. Start a business!!

    • It comes down to a philosophy over whether our goal is to create an environment where entrepreneurs and workers want to live, or whether our goal is to attract big companies with incentives or tax breaks to bring jobs here first, so that people move here and THEN make the communities stronger. We’ve used the latter approach for a generation. I have an opinion about all this which I have shared so many times it hurts. You are pulling a point I made about diversity of thought and using it out of context in a false equivalency argument.

      Where do you live, Bob? Where do you put your money? I’m at an Iron Range dealership right now buying a tire. I live my whole life here. 98 percent of my sleeps are in my own bed on the Iron Range.

      Ah, but see, it’s not about us. It’s about the broader community. Either we (all of us, together) want to stop wallowing in the declining mediocrity of the current economy or they want something more responsive to the changing trends of our national and international conditions. I don’t decide that. Neither do you. We’ll all learn, together. I do have my opinions, though, and I share them at a blog where I state my name and motivations every time I write.

      • As Einstein once said – “Setting an example is not the main means of influencing another, it is the only means”.

        Live out your passion Aaron, set an example and others might follow. But it makes absolutely no difference if they don’t. I can attest, you’ll be at peace, really.

  11. I just don’t understand why people think future mining and economic diversity for the Iron Range are mutually exclusive. I also don’t understand why people think Aaron is “anti-mining.” I’m a miner and I’m all for future mining endeavors. However, future mining NEEDS to be a piece of the future economic pie; not the ENTIRE pie. I simply bang my head against a wall when you bring up economic diversity for the Range, and automatically, you’re viewed as anti-mining.

    • Thank you, Kyle. And yes, for the record, I do not oppose mining. In particular I support MINERS and what they do for a living. The companies drive me nuts sometimes, but you know all about that.

  12. This area is so totally controlled by mining interests that if/when the bottom falls out, we are going to be in for a very hard landing. Nobody in the mining industry, or in any way dependent upon mining for a job, will admit what mining is doing to our water and our land, and no one seems to care that mining expansions are eating away at our towns and the highways that are connecting us. If mining ends now, there will be no jobs. If mining ends 10 years from now due to market conditions, there will be no jobs. if mining ends because we run out of ore, or at least marketable ore, there will be no jobs. But instead of acknowledging that we have some problems here, and we should at least start thinking about some different possibilities, the mining die-hards hunker down and cast out anyone who dares to question either the environmental footprint left by mining or the economic vulnerability of the mining economy. If we truly “love” the Iron Range and want to live here, then we had better take an honest look at the current economic stratification of our towns where mining is currently taking place, and at what is working or not working for the people currently living here. After a century of being held under the grip of mining and mining-related financial interests, it’s time to emerge from our serfdom cocoon and start looking at the world around us with a different vision. I give credit to Aaron for trying to wake up the sleeping giant of the Iron Range so that we can offer some hope for the children.

    • Ranger47 says:

      Sigh, I repeat Elanne
      As Einstein once said – “Setting an example is not the main means of influencing another, it is the only means”.

      Live out your passion Elanne, set an example and others might follow. But it makes absolutely no difference if they don’t. I can attest, you’ll be at peace, really. Enough pontificating!

  13. Ranger the one trick pony.

  14. Ranger47 says:

    Kissa….good to hear from you! Once again, providing insight, adding value to the discussion..

  15. Hmm, Einstein you say? Seems to me that I recall that Einstein wrote a letter to FDR urging the creation of the Manhattan Project, which was the biggest and most expensive government project in history at that point, and perhaps still is even now in constant dollars. So it sounds like — moments of Zen not withstanding — he was pretty into using tax funding, experts, technology, and major projects to work for change. Guess he probably felt that pushing hard for change using government programs and political channels was a big part of setting the right example.

    But if the Zen works for you, by all means do it.

  16. Ranger47 says:

    Very good Gerald, he sure did. And with the foremost purpose of government being to provide for “the common defense” of its people, he did a pretty darn good job. God bless him. He also kept Japanese as a second language. He didn’t promote using the people’s money to invent a better bike trail or community garden.

    • Gerald S says:

      Have you ever been to Princeton, New Jersey? That’s where Einstein lived, worked, and voted. Talk about bike trails, community gardens, parks, and huge public education budgets!

      Einstein, like most Middle European Jews from the first half of the 20th century, was politically a socialist, somewhat to the left of Bernie Sanders.

      Plus, to review WWII history, by the time the bomb was developed there was no danger the Japanese would win. There are whole books written debating the reason the bomb was dropped, but at best it hastened surrender and assured that the surrender would be unconditional, as the by then dead FDR had promised, rather than conditional on preserving the Emperor and protecting him from prosecution as a war criminal, as the proposal for surrender the Japanese had already offered specified.

  17. Ranger47 says:

    Gerald…When Aaron writes an article about WWII, we’ll debate it. But this article, as you well know, is about the Range economy.

    Attempting to change the discussion like you and kissa are doing reveals two things: 1) you’ve no concrete ideas on how to move the Range economy away from mining being dominate, and 2) you’ve lost the debate and are attempting to change the subject due to #1

    Aaron….give thought to a WWII article so Gerald can get involved.

    • Gerald S says:

      R47, you were the one who brought up both Einstein and “Japanese as a second language.” I agree completely that citing Einstein, an avowed socialist who actually published essays inveighing against capitalism, as a model for conservative ideals is silly, and off topic. Don’t do it again.

  18. Ranger47 says:

    I uttered one line Gerald, one line. And it was said in the context of what Einstein thought about how to bring about change, change of any kind, including the Range economy.

    Then you changed the subject by rambling on about one of the worlds greatest scientists AND bringing up New Jersey AND WWII AND the Middle East AND the Jews AND the BERN AND the Emperor AND FDR. And I changed the subject?? Read the order of thread Gerald.

    I repeat the line…and it’s 100% relevant as to how an individual can bring about change to the economy of the Range. Ready now?

    Someone once said – “Setting an example is not the main means of influencing another, it is the only means”.

    Set an example Gerald. We’ll be watching…Hmmm, silence, dead silence.

  19. Ranger47 says:

    Oops Gerald….I left out you also brought up Zen??, in addition to the other aforementioned red-herrings.

  20. The combined mines on the Range spend about a billion dollars in normal years on labor, energy, goods, services, and taxes. It’s split about 1/3 labor, 1/3 energy, and 1/3 everything else.

    Over half of it gets spent on the Range and most gets spent in Minnesota for the first round of spending. After the first round it goes to buy goods and services from places all over the world.

    To say that most of the money generated by mining winds up as profits in Pittsburgh or Cleveland is a very misguided view. Very little falls down to the bottom line to be called a profit. Right now, none. Royalties are a very small percentage of the total expenses and many of these go to the State of Minnesota anyway.

    The beltlines of Hibbing and Virginia are lined with businesses that wouldn’t even be here if it weren’t to supply the mines. When the mines cut back these businesses get hurt worse, and there aren’t as many as there used to be. Cutbacks trickle down to the point where retail fails too. The closed K-marts and empty malls are prime examples of this. Fewer kids in the schools results in closed buildings. The Range is littered with closed and torn down school buildings.

    To say that mining is only a small part of the local economy is very misleading. When mining slows down here everything but government slows down too. Locally, mining drives the whole economy.

    That being said, the market for the pellets produced by the local taconite plants is shrinking and will continue to shrink. In the last 40 years there has been a major shift in how steel is produced in this country while total production has stayed about the same.

    Pellets can only be used to make iron in a blast furnace. In 1976 about 10% of the steel produced in this country came from melting scrap in electric arc furnaces. The rest was made from iron ore. Now, about 65% is made by melting scrap in electric arc furnaces.

    Electric arc furnaces use absolutely no iron ore pellets to produce steel. The percentage of steel made from iron ore pellets is still shrinking. If we are going to stay in the mining business around here we’d best plan on somehow serving the new market for steel, not the old one, or mining something else. It would be nice if the Essar project was handled more competently to change this. Cliffs, at least to their credit, realizes this and acknowledges it. I’m not sure USS and Arcelor do.

    Diversifying the economy is a great idea and concept, but the devil is in the details. Is it “build it and they will come” or “bribe them to come and then build it?” Is there another option we don’t even know about? Are we shooting ourselves in the foot? Should we be growing prosperity locally?

    With our winters, swamps, mosquitoes, and distance from civilization it’s hard for outsiders to decide they want to live here. We’re used to it, they aren’t. Sure, maybe a vacation, but not to live in this God forsaken place.

    I remember fellow graduating engineers at college who went on interview trips for jobs in the mines up here. The company flew them into Duluth and they had to drive to Virginia for the interview. Their biggest impression of the area was that they had to drive forever up Highway 53 through the endless swamps just to get to the plant. These are people who had just lived through four or more Michigan Upper Peninsula winters who were turned off. Imagine what someone from Arizona or Florida would say.

    In the old days if there was a problem in a town we looked to the mining company to fix it, or at least pay for it. Need a new school? The mining company will pay for it. Economic problems? Pass the Taconite Amendment and let the mining companies fix it. Mining companies are too variable and don’t want to fix things anymore? Hike the production tax and let the IRRRB fix it. Need a new sewer plant? Let the IRRRB pay for it. We’ve come to rely on someone else for our future. We’ve become the equivalent of Appalachia. Paternalism at its finest.

    Our more recent history is littered with projects that “swung for the fences” so the IRRRB could solve all our problems. Most turned out ill conceived, if not total frauds. Off the top of my head Tirecycle, Endotronics, the Chopsticks Factory, Excelsior Energy, and the bioengineering place in Mountain Iron come to mind. They often seem to be timed to peak in the summers before elections.

    Any real growth and prosperity for the region probably has to come from within, from people who grew up north of Highway 2 and actually want to live here. There’s a problem with that too. Our local culture has developed to be a “work for someone else till you retire” culture, not a “start a business and work your butt off” culture. We don’t have much of an entrepreneurial spirit. What often sparks entrepreneurial spirit in other areas is viewed as a hobby for after work here.

    The local people who do have this spirit mostly leave and pursue it somewhere else. Almost everyone from the Range who’s been successful or famous in life became successful after they left the area. Only a few came back.

    To diversify the local economy we have to change this, and I have absolutely no idea how. Education? Makerspaces? The only thing I know is that what we are doing now isn’t working anywhere near fast enough to stave off the inevitable long term decline in iron ore mining.

    We’ve missed our chance for a casino. That might have been a good match for Ironworld or Giant’s Ridge early on but the state is saturated with casinos now.

    If the state really wanted to help us a four year plus STEM university would be a big shot in the arm. One of those is the economic foundation for the Copper Country of Michigan, another former mining area. I’m sure the cost would be in the billions to get started.

    Any other ideas out there?

  21. Ranger47 says:

    Wow B – The best, most thoughtful, honest description of the situation I’ve seen in years..

  22. ” What often sparks entrepreneurial spirit in other areas is viewed as a hobby for after work here.”

    I agree! I think that’s why Aaron gets some push-back for his thoughts on economic diversification. He’s often talking about newer, usually smaller, sort of unique-type entrepreneurial ventures, and a lot of people totally see such ideas as hobbies, but not something that could realistically support a family.

    I myself, though open to new ideas, find I am sort of in the more-traditional category. Because we do have sort of an industrial/work mindset, I think we should diversify by actually manufacturing stuff around here. Someone has to make toothbrushes and TVs and silverware…

  23. Alan Stone says:

    I believe this was a wondeerful discussion. I grew up in Nashwauk and graduated and graduated from school there in 1949. After Army service (1952-1954) I decided to live in the Twin Cities. I continue to see the market for steel and iron slowly disappear. Over a year ago, Ford announced that they would begin building their most popular pickup trucks with an aluminum body. I personally thought this would be a disaster for them, but the opposite was true, their sales took off like a robot. They are forcing everyone else hat manufactures pickups to do the same to remain competitive. How much steel is there in a Tesla? Not hardly any, I would imagine. What is steel and iron in the future going to be used for? I organized a monthly lunch for people that grew up in the Nashwauk area but have lived in the Twin Cities and we meet every month on the third Wednesday. Every member has done quite well here, whether it is in health care, food distributionj, real estate, working for our state, etc. I believe that success comes from imagination, and hard work. Young people with imagination have started massive businesses i.e. FEDEX, Amazon, and many more. Just those two have changed the shipping and purchasing habits of the masses. The past is in the past, the future can be most incredible.

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