Range economic talk needs focus on future, not past

It’s been interesting reading the responses to my recent post about the Highway 53 bridge. On one hand, we have a question about an expensive bridge and its place in our infrastructure planning for the future. But really, like most things related to mining, it quickly becomes a litmus test on your perspective toward the Iron Range economy and culture. It becomes an opportunity to argue about “tree huggers” and “mining goons,” projecting whatever ancient baggage your moms or dads dumped on you toward some largely imaginary evil.

Either you believe that mining is the only reason we are here, and the only way we’ll ever prosper. Or you don’t, to some varying degree. Perhaps you think everyone should bail for the Cities, or perhaps you think that maybe some people live here or might one day live here for reasons other than mining.

If you fall in the first camp, you see our current economic situation as a hazard of the markets. Like Tinkerbell’s hanging fate in children’s productions of “Peter Pan,” only true belief in mining can bring it back. It’s the Range DFL’s fault. It’s Kurt Daudt’s fault. It’s Obama’s fault. It’s China’s fault. If only all those bastards would let us be, we’d be sitting fat and sassy.

Is that really true, though? Even a mining recovery that brought us to 2012 production levels — a very good year — still leaves holes in our employment economy, lower than average state wages, higher than average poverty. Further, it’s beginning to look doubtful that a recovery of that sort would be possible for several years.

Jasmine Ng at Bloomberg Business filed a report today entitled “World Bank predicts iron ore will be worst metal performer.”

Ng leads with this:

Iron ore prices are likely to post the biggest loss among metals this year as low-cost supply continues to outstrip consumption, according to the World Bank, which cut its forecasts through 2020.

Demand is nearing its peak and prices will average $42 a metric ton in 2016, a drop of 25 percent from $55.80 last year, the Washington-based lender said in its quarterly outlook. In comparison, nickel may fall 16 percent and copper 9 percent, it said. In October, the bank had forecast 2016 iron ore at $59.50.

The full story explains why the World Bank is so dour on iron.

No one doubts the ore we have in the ground. But a lot of smart people do doubt the profitability of mining it. Trade policy could help keep more steel production here in the United States, but the necessary adjustments to generate profits will portend a tighter iron ore industry, one prone to blinking on and off, with fewer miners and more machines.

Again, as I said just a few days ago, I don’t say this because I like it. I say this because I don’t think this region takes a step forward until this reality is acknowledged broadly.

If you want to live in the past, be my guest. But this blog and my writing will always focus on how lessons from the past apply to the future ahead. I’d like to know what to tell my kids about their futures here, not what the future looked like for me decades ago.


  1. Aaron, 1/27/2016 – “I’d like to know what to tell my kids about their futures here”.

    Tell ’em what you’ve been telling us Aaron…”Open a business, on the Range, totally unrelated to mining, employ those on layoff (from either mining or Kmart)…and pay your employees at least $20 per hour”. Right? (Oh…and make sure to keep voting DFL).

  2. You say that as if those things were bad. Are they? I don’t know what father wouldn’t be proud of a kid who did those things exactly. I mean, setting aside the partisan politics. (I really don’t care what party my kids vote for, as long as they have good character and don’t become internet trolls).

  3. There’s nothing bad whatsoever with that advice Aaron.

    However, you ended your article with an unsureness about what to tell your kids about their future on the Range by stating “I’d like to know what to tell my kids…”. That’s an eye-opening surprise to your readers considering your long-standing passion to diversify the Range economy.

    Strange you wouldn’t be telling them to diversify, not wondering what to tell ’em to do, that’s all.

  4. Well, I think we’ve established that me talking and writing about economic diversification alone isn’t enough. My work in teaching and the arts helps, but isn’t enough. At some point, other people have to want this too, and act accordingly. I think the subtext was there. As you like to say, “read closer.”

  5. I believe we need to continue mining, but we also need to continue diversifying and coming up with more products and services that can be sold to the people of the world who live outside the Range. I guess I’m in the “Gray Camp”.

  6. Independent says

    Absolutely “Gray Camp”. We should certainly promote and support current and new mining and processing endevors and any new value added processes that can expand the employment opportunities utilizing our natural resources. It boggles my mind why folks think we cannot do that while at the same time support, promote and finance economic diversity with bio-chem, technology, etc. opportunities. Anything other than an all of the above approach to the iron range economy shows undertones of personal bias and sells us all short.

  7. Gray Camp & Independent…you both state it eloquently yet so short and simple. Why there are those who find it necessary to hate mining, both current and new, so deeply is beyond me.

    And certainly no one is against any type of new businesses getting established….Oops, except those again who hate low cost / high volume businesses.

  8. It seems like we are on the same page Independent and Ranger47. I’d like to add; to make a regional economy work, you need to be able to bring in significant money from outside the region – be it from manufacturing, mining, tourism, government, or whatever. This money is the economic engine that pays for everything else including the necessary local service industries. We need more businesses that do this, not less. Even if due to commodity globalization, we can only count on mining 80% of the time over the next 25 years, that’s still a huge chunk of money influx that I want in the region.

  9. I grew up in Ohio and moved to Minneapolis as recently as ’96. So I’ve only been here for 20 years, but I chose Minnesota as my new home after developing a deep respect for the people of this great state. So I don’t have a long history in the mining industry, but I do come from a family of farmers who are equally subject to the ups and downs of the market (an unpredictable weather), and I continue to see them struggle because their economy is so linear.

    I agree with Aaron that diversification is going to be critical to the survival of towns on the Iron Range because I’ve seen the same decline happen in small farm towns in Ohio. Only those towns that offer a combination of goods and services robust enough to create their own little micro-economies actually grow and prosper; the rest continue a steady decline not only as incomes shrink, but tragically as people and talent leave those small towns in hopes of finding a better life closer to a city.

    Diversification not only helps to prop up the local economy, but it gives people a reason to STAY, and those extra salaries pump more money into local economies. Diversification retains good teachers, professors, lawyers, doctors, engineers, investors, financial analysts, and retailers–it gives them a reason to stay.

    But there also has to be a commitment on the part of communities to shop their local business. Driving 30 minutes to the closest WalMart for a cheaper case of Coke saves nothing in the long run, and while that Coke may cost a little more at the local market, that money is going directly in your neighbor’s pocket. That neighbor will have more money to buy your kid’s fundraiser candy bars, spend on gas for the boat, invest in lake property, or buy from your car lot. That dollar ultimately will do a lot more to take care of the local economy than any corporation.

    I shop my local hardware (at 38th and Chicago in south Minneapolis) not because I get the best price, but because I want that hardware store to be there, and I want it to offer kids in my neighborhood good jobs. I also want the bakery next to it, and its Latino owners, to do well and be able to provide for their families so we continue to have a Cinco de Mayo celebration. Sure, I’ll still make my Target runs, but generally only when my local store doesn’t carry the item I need.

    All of that to say that diversification is important, but a commitment to shop local is critical so the money stays in the community.

  10. Minnesota is #1 in Gallup Job Creation Index but jobs not happening on Iron Range and elsewhere in rural MN. It’s pretty clear that unemployment and lack of jobs in small town and rural areas is a huge issue all over America. Cities and metropolitan areas are more likely to have more diverse businesses excepting those cities that are one main industry dependent. We all know what happened to auto manufacturing jobs, etc. when plants moved to cheaper labor countries or states. Many cities that lost their plants and major source of employment have been struggling for decades.

    Being realistic about how much mining will be a big economic force on the Iron Range again, if ever, isn’t being a “treehugger” for crying out loud. Too many people are stuck in a rut spending time and resentment defining the mining issue as “you’re either with us or agin us”.

  11. Sean – supporting diverse local stores is important for keeping money in the community once it has come into the community. However, more importantly for the Range is the need to diversify into more different products we can create in our community and sell outside our community – to bring money into the community to begin with. I’m guessing the successful micro-economies in Ohio thrived because they were able to bring shoppers in from outside the community to spend money.
    Kissa – Supporting mining and planning for a future with less mining are and should be two independent things. People need to be able to keep these things separate.

  12. A lot of people can’t seem to keep these things separate nor in any kind of perspective, not when they are still pining for the past. The world is always changing and the thrivers know they have to adapt even though the way there is never easy.

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