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Report: Janesville area outranks other Wisconsin small cities in jobs, wages

JANESVILLE

United Alloy executive Jason Lichtfuss said he’ll hand his business card to anyone he thinks he can persuade to work at his fast-growing Janesville company.

Lichtfuss, who leads the company’s engineering division, said he’s even started visiting local, blue-collar taverns on de facto recruitment visits. He hands out his cards to tavern patrons and asks them to come work for United Alloy.

He tells them they’ll earn pay a cut above the recent standard for blue-collar wages in Rock County: $18 to $23 an hour for some entry-level welding and fabricating jobs.

“We’ve got 10 people working here right now from those (tavern) visits,” Lichtfuss said.

The tavern meet-and-greets are just one of several avenues United Alloy is plying to find more workers as it plans to construct a 100,000-square-foot expansion to its manufacturing space.

The metal fabrication and powder coating company is booming. Its expansion would grow manufacturing space 30 percent and allow it to specialize in some advanced manufacturing that it now outsources.

Recent booms for United Alloy and other local companies have kept Janesville among the top 40 best-performing small cities in the U.S. for three straight years, according to a report released this month by California economic analyst Milkin Institute.

The Milkin report shows the Janesville area has surged ahead of peer cities in Wisconsin in high-tech industry growth, and it’s ranked consistently high in job and wage gains in various sectors, including health care, advanced manufacturing, pharmaceutical production and construction, Milkin analyst Minoli Ratnatunga told The Gazette.

The Milken report uses federal data on wage and job growth by employment sector, focusing on short- and long-term growth.

“It’s been relatively stable (growth), which is a good indicator of an economy that is relatively robust,” Ratnatunga said. “Overall, looking at your (surveyed) industries, it does seem to be a pretty broad-based economic growth.”

Tech and manufacturing

United Alloy plans to add a highly automated clean painting area that will be in operation by 2019.

It’s the company’s second major expansion in Janesville in five years, and it’s being driven by growing demand from large machinery companies, such as Caterpillar and Generac, which it supplies with metal tanks and other welded equipment.

Luke Jaynes, vice president of marketing at United Alloy, reviewed the Milkin report last week. He said he was encouraged to see how far Janesville has risen in the analyst’s index in recent years, but he’s not surprised.

United Alloy itself has grown from about 150 workers in 2014 to about 190 workers now, and it plans to try to hire at least 50 new employees over the next year. The company continues hiring to fill demand that’s growing separate from its planned expansion, United Alloy President of Operations Jenna Newcomb said.

Coming out of the Great Recession, the Janesville-Beloit metropolitan statistical area has vaulted in Milkin’s annual small metro ranking from 108th out of 177 small cities in 2013 to as high as No. 4 in 2015.

In 2016, Janesville-Beloit fell to 32nd but climbed in 2017 to the 25th spot. That put the Janesville area back in the top 80 percentile for all small cities ranked in Milkin’s report.

Janesville-Beloit ranks higher than all other mid-sized Wisconsin metro areas, and only four Midwest small cities outranked Janesville-Beloit in the index.

Ratnatunga said an across-the-board-look at national data that compares small cities such as Janesville to burgeoning, tech-heavy metropolitan hubs such as San Francisco, Dallas and Nashville, Tennessee, shows the Janesville area is keeping pace with national economic growth, even compared to large, fast-growing metros.

“Given that the large metros, the tech-based, large hubs that have been growing like crazy, for a small metro (like Janesville and Beloit) to keep on pace with that greater national economy is pretty impressive,” Ratnatunga said. “It’s a good sign, I’d say.”

Milkin gives weight in its index to growth in the high-tech sector. Last year, Janesville-Beloit vaulted to fifth for all small cities in short-term growth in high-tech exports in 2015 and 2016, the Milken study reports.

Nuclear pharmaceutical startups SHINE Medical Technologies in Janesville and NorthStar Medical Radioisotopes in Beloit grabbed recent national headlines in the New York Times. The two firms say they continue to move toward production and marketing of the nation’s first-ever fully domestically produced medical molybdenum 99, a radioactive isotope used in medical tests.

Paul Jadin, president of the Madison Region Economic Partnership, which includes Rock County, said he thinks the Milkin report aptly highlights Janesville-Beloit’s growth in high-tech industries.

“It speaks very, very well for Janesville-Beloit’s resurgence and the fact that resurgence is not just in manufacturing, but it’s in IT and high-tech. That’s a very important factor, as opposed to the rest of the state that is very focused on manufacturing and advanced manufacturing,” he said.

Sticking around

Jaynes, the United Alloy sales executive, said he believes Janesville-Beloit also is winning battles wooing and retaining local manufacturing companies.

Janesville recently awarded United Alloy a $962,000 tax increment financing package with land and jobs creation incentives for its planned expansion in Janesville.

Prior to that, the city had underwritten a $10 million industrial revenue bond for the project, a loan that United Alloy is backing itself, city officials said.

The city TIF and revenue bond deals came as United Alloy was being courted by a Texas community to build the plant expansion there, Jaynes said.

The city’s help and the local economic boost comes as United Alloy and others industries locally and regionally face record low unemployment and a tight labor market. Jaynes said that’s made local workers who are looking to switch jobs more common than those who are simply unemployed and seeking work.

United Alloy has worked with Blackhawk Technical College to find a pipeline for more welders, fabricators, painters and product inspectors, workers it needs right now. But Jaynes said he believes area trade school enrollment hasn’t grown fast enough to meet the hiring demand some local manufacturers are seeing.

United Alloy has begun to invest over the last year in its own in-house welding training, and it’s added new wage incentives to its recruiting. For instance, some second- and third-shift workers can earn entry level pay of $23 per hour, Lichtfuss said.

Average local entry-level welding pay, according to recent federal surveys, is $15 to $16 an hour. At employers such as United Alloy, those rates are climbing. It’s out of necessity to meet hiring demand and be an “employer of choice,” Newcomb and Jaynes said.

“We don’t sell on having the cheapest labor force and the cheapest equipment. That’s not what we want,” Jaynes said.

Wage increases such as those at United Alloy would factor into Janesville-Beloit’s rank in indexes such as Milkin Institute’s “Best Cities” report, but manufacturers locally, regionally and nationwide are split on the issue.

A major manufacturer that United Alloy supplies, Caterpillar, is starting to bail out of manufacturing markets in Illinois and move instead to states in the South that have lower average labor costs, such as Texas, Jaynes said.

Jaynes said there’s been pressure for supplier industries such as United Alloy to make a geographic move alongside the companies they supply.

“CAT is telling us, ‘We want you to be where we are.’ So it was a huge decision for us to want to expand here in Janesville rather than move where they’re moving. It was also a cautious decision for Caterpillar to source all the way up in Wisconsin. We’re going to be sending our product to Texas and Georgia,” Jaynes said.

Officials from Southern communities see that trend. Over the last year, the San Antonio, Texas, suburb of Sequin tried to woo United Alloy to move its expansion there, Jaynes said.

United Alloy preferred not to make such a move, Jaynes said—in large part because the company believes in Rock County’s workforce.

“The part we bet on in Janesville is the workforce. We’ve been to Georgia plants, and people work on a different pace and a different skill level,” Jaynes said.

Lichtfuss said the upper Midwest worker has a “different standard” than Southern workers, and he said his company is willing to pay higher wages to stay here.

“People here work hard. They come to work every day,” he said.

“Those are the people you need.”


Health_care
A century ago, influenza left Janesville families mourning

JANESVILLE

Marjorie “Marge” Van Galder skipped around the Janesville railroad depot smiling and talking to people on a lovely autumn day in 1918.

As the vibrant child waited with her mother for her Aunt Abby to arrive on a train, a woman offered Marge a piece of candy.

Before 5-year-old Marge could put the candy in her mouth, she crumpled to the floor.

Marge’s mom rushed to the child’s side, cleaned her hot face with a hankie and lifted her onto a wooden bench.

When the train arrived, Marge’s mom asked Abby to return home because young Marge—like so many in Janesville—had fallen ill to influenza.

Abby insisted on helping.

The doctor who treated Marge advised her mother to pray.

This year’s flu season is more serious and widespread than in recent years.

But almost a century ago, residents of Rock County faced a rampant killer in the form of a particularly deadly influenza. People could be healthy in the morning and dead by evening.

The misnamed Spanish flu was a strain of virus unlike anything anyone had ever seen, and it turned the whole world into a killing zone.

Historical sources say the disease claimed 675,000 people in the United States, the worst epidemic in U.S. history.

Around the world, estimated influenza deaths ranged up to 50 million, according to the National Archives and Records Administration.

Janesville not spared

During a terrifying October of 1918, influenza hit hardest in Janesville.

In just three weeks, doctors confirmed more than 750 cases in the city of about 20,000, the Janesville Daily Gazette reported.

On Oct. 9, Health Officer S.B. Buckmaster ordered all public places, including dance halls, theaters, schools and churches, closed to prevent rapid spread of the disease.

The order came in a rare newspaper notice on the front page, normally packed with World War I news from Europe.

The health officer also urged citizens to obey a state law against spitting on sidewalks and in public places.

A newspaper ad tried to calm worried residents by saying that Spanish influenza was nothing new, simply “the old grip,” and victims should “go to bed, stay quiet and take a laxative.”

Things took a turn for the worse when more than 100 men from Camp Grant in Rockford, Illinois, became sick while on furlough in Janesville. They sought shelter at the YMCA, where 39 slept in the lobby and others on billiard tables and benches because there were not enough beds.

By mid-October, the health officer was home with the flu, and all of the city’s doctors and nurses “are working night and day.” At one point, the city called for more nurses from Madison and Milwaukee.

For 25 cents, Smith’s Pharmacy in Janesville sold Smith’s Cold Tablets and called them “a guard against influenza.”

Some people wore sacks of camphor around their necks to ward off disease. Others preferred garlic bags. Two young women on their way to work were featured in the newspaper because they wore gauze masks in public.

Unfortunately, such anti-flu methods offered no protection against viruses, which were still mostly unknown by the medical community.

By Oct. 25, doctors said new cases of flu were still increasing, especially in rural areas of Rock County. The local health officer implored people who had lost loved ones to keep the services small so large numbers would not gather.

The newspaper reported that “local physicians are being taxed to the limit of their endurance.” Still, doctors insisted “there is no cause for the public to become alarmed.”

By the end of October, reports of new cases of flu dipped dramatically, and a headline in the newspaper read: “The Crisis Has Passed.”

Theaters, churches and schools re-opened in early November.

Young Marge recovers

Marge Van Galder survived the flu, but her Aunt Abby did not.

Abby, who helped care for Marge, became ill as the child recovered.

Many years later, Marge wrote about Abby in her 1994 book, “Growing Up In Monterey Back When.”

“Dear Aunt Abby—who was so determined to help others—was gone,” Marge wrote, painfully.

Two weeks after Abby’s death, Marge’s family celebrated the signing of the World War I Armistice.

They gathered with thousands of others Nov. 12 at the Five Points in Janesville, where they cheered and waved flags.

Sadly, in the American military, more men died from influenza than on the battlefield.

Marge, who lived a long life, died in 2000.

For her, like so many others, the flu of 1918 was defined by the terrible loss of a loved one or loved ones.

Lessons for today

Brenda Klahn of SSM Health St. Mary’s Hospital-Janesville is optimistic the flu pandemic of 1918 will not repeat itself.

“You never say never,” the infection control specialist said. “But we know so much more today. Part of the reason it was so deadly in 1918 is because doctors could only treat patient symptoms. They did not have vaccines or anti-viral drugs.”

One of the lessons to be learned from the 1918 epidemic is that influenza is a serious disease, Klahn said.

“Even though we have better methods of treating it and preventing it, it can kill people,” she explained. “Two years ago, I had a co-worker whose husband almost died from it.”

Klahn urged people to be vaccinated.

“A lot of people say they have never gotten sick, so they don’t need the flu shot,” she said. “But it is a vaccine-preventable disease, even though the vaccine is not 100 percent effective every year.”

In Janesville, the number of influenza cases has been high since before Christmas.

“We haven’t seen them slow down yet,” Klahn said. “It’s something people shouldn’t take lightly.”

Anna Marie Lux is a Sunday columnist for The Gazette. Call her with ideas or comments at 608-755-8264, or email amarielux@gazettextra.com.


Angela Major 

UW-La Crosse’s Dani Craig, left, dribbles past UW-Whitewater’s Camri Conley in a key Wisconsin Intercollegiate Athletic Conference game Saturday at UW-Whitewater. La Crosse came away with a hard-fought 66-62 win, knocking Whitewater out of a tie for the top position in the conference. Story, Page 1B.


Long shutdown could hurt economy, a short one just 'a blip'

If the shutdown lasts just days or even a couple of weeks, the robust stock market that President Donald Trump has boasted about probably will emerge unscathed. A longer impasse, economists say, could rattle consumer and investor confidence, pulling stocks lower and dragging down the economy.

Economists and investment advisers interviewed by The Associated Press generally didn’t foresee the shutdown that began Saturday lasting long enough to stifle the economy much. With pivotal elections in November, both parties would want to shield voters from any pain. Investors and consumers are feeling optimistic now based on the tax cut signed into law last month, and the economy is strong enough to power through a short shutdown.

But Randy Warren, CEO of Warren Financial Service, a Philadelphia-area investment advisory firm, said shutdown that drags on for six weeks or longer—an unimaginable scenario—could kill a bull market and discourage people from spending money. “These things start to pile up,” he said Saturday. “When you start to doubt the future, then you start to doubt investing.”

And that’s among the reasons Warren and others don’t see a lengthy stalemate.

“It seems unlikely at this point that it would be a four-week shutdown,” said Beth Ann Bovino, chief U.S. economist at Standard & Poor’s. “It will hopefully be a blip.”

The Standard & Poor’s 500 index and Nasdaq composite closed at record highs Friday. The Russell 2000 index, composed of smaller, more domestically-focused companies, climbed more than 1 percent and also finished at a record high.

“Unless it meaningfully impacts the U.S. consumer and leads them to spend much less money, leading to some kind of major (economic) slowdown, it’s not a big deal,” said Sameer Samana, global equity and technical strategist for the Wells Fargo Investment Institute.

The economy could take a hit if national parks and monuments are closed or operations curtailed for a long period. Trips could be canceled, cutting vacation dollars that roll into communities near the parks. The Interior Department pledged to keep as many parks and public lands open as possible, but the pattern on Saturday was spotty. Some parks such as Yellowstone and Yosemite were open with limited services, but the Statue of Liberty in New York and the Liberty Bell in Philadelphia were closed.

After the 16-day government shutdown in October 2013, the Bureau of Economic Analysis estimated that it trimmed an annualized 0.3 percent from growth during the final three months of that year. The reduced growth was mostly because federal employees worked fewer hours.

Leslie Preston, a senior economist at TD Bank, said the economy is currently “strong enough to withstand” a similarly sized hit because growth is projected to be nearly 2.5 percent in the January-March quarter.


glance

Local • 2A, 3A

UW Extension role is changing

Nick Baker’s official job title is agriculture agent for UW Extension’s Rock County office. But his role has expanded due to the overall UW System merger, a restructuring plan approved by the Board of Regents in November and still being implemented. Under the merger, UW-Madison will absorb the UW Extension program. Baker said he isn’t quite sure what that will look like because it does not take effect until July.

Film features ‘Bray Road Beast’

Rumors of a werewolf-like creature known as the Beast of Bray Road have swirled for years in Walworth County. The monster has been the subject of newspaper articles and a book, and now it will appear in a documentary, “The Bray Road Beast,” which is set to release this fall, said Seth Breedlove, the director of the film and head of the production company making it.

nation/world • 8B-9B

Battles over baby powder

In the early 1970s, a Johnson & Johnson official posed a question that haunts the company today. If Johnson’s Baby Powder contained asbestos at a level of, say, 1 percent, how much of the cancer-causing substance would a baby inhale when dusted with the powder? The company continues to face legal trouble over its baby powder with a new trial set to begin Monday.