Listen: Hibbing Rec. wasnt (Kelleher) - 4358

As part of MPR News series “Stress-Testing the Recovery,” MPR’s Bob Kelleher profiles Hibbing, an area in northeastern Minnesota which has the highest jobless rate of any city in the state.

Hibbing is the center of the state's taconite mining industry. The industry is seeing a mild rebound after a summer shutdown, but so far the upturn has skipped Hibbing.

Stress-Testing the Recovery” presents stories from areas of Minnesota where economic recovery means overcoming unemployment rates that have reached double digits.

Report is one in a four-part series.


2009 NBNA Eric Sevareid Award, first place in Series - Large Market Radio category

2010 MNSPJ Page One Award, third place in Radio - Mini-documentary/in-depth series category


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BOB KELLEHER: Mining accounts for only 3% of the jobs in St. Louis County, but a recent study gives the industry credit for a third of St. Louis County's gross regional product. Mining jobs pay an average of about $68,000 a year, double the typical wage in the county. Earlier this year, the recession hit mining hard. At one point, the state's entire taconite industry, six mines, had shut down last summer. Most are open again.

But within a short drive of downtown Hibbing, the area's two taconite mining companies remain idle, along with most of their 900 workers. And when the mines are hurting, nearly everyone feels the pain.


Mike Banovitz is wandering among the booths at the up north jobs fair in Hibbing's Irongate Plaza mall. He wasn't laid off from a mine, but from a construction project.

MIKE BANOVITZ: I'm a mechanical engineer, and I was looking to find a job so I can stay here in northern Minnesota. Otherwise, I'm going to have to hit the road and work elsewhere.

BOB KELLEHER: Banovitz wants to stay near Ely, but the clock is winding down on his unemployment benefits. And he may have to go job hunting out of state.

MIKE BANOVITZ: Right now, it looks like that's where I'm going to end up having to go. So I came to the job fair here to see what was available in northern Minnesota, to see if I can't stay closer to home.

BOB KELLEHER: But at this job fair, there are more booths offering education than employment. None of the area's taconite mining companies are here, and that's not surprising, according to Charlotte Hanegmon with the Department of Employment and Economic Development in Hibbing.

CHARLOTTE HANEGMON: You know, it's hard getting employers to come to a job fair this year. Many of the major employers that we've had in the past chose not to come because they have people off work.

BOB KELLEHER: Companies that supply the mines are nowhere to be seen, and there are not many construction or nonmining companies here either.

JEFF RONCHETTI: Everything evolves around what the mines are doing.

BOB KELLEHER: Police Sergeant Jeff Ronchetti is recruiting for the Hibbing Police.

JEFF RONCHETTI: If the mines are doing poorly, all the spinoff businesses do poorly. The regular business climate also starts to deteriorate because it's dependent upon people getting salaries and their paychecks from the mine.


BOB KELLEHER: It's another gray day in Nashwauk, a dozen miles west of Hibbing, as the rain falls outside the big front windows of a nearly empty Wauk-In cafe. Longtime miner Guy Gangl says the times feel a lot like the 1980s again, a decade when some mines failed, and thousands of people left the Iron Range for good.

GUY GANGL: For any job that's available, I'm sure there's over hundreds of applications put in for the jobs. I have three sons that are currently looking for work also. They were never employed in the mines, but-- a lot of young people looking for work, a lot of old people looking for work.

BOB KELLEHER: Gangl says the tight times have nearly everyone very cautious about spending. Gangl is surrounded by empty tables, and the Wauk-In is the only cafe in town. "It looked like things would change a couple of weeks ago," Gangl says, "when more than 100 workers were recalled to the KeeTac plant a few miles away."

GUY GANGL: Yeah, they called all the maintenance people back. Very few operations got called back. We all went in and took our physicals to go back. And then because of the economy or whatever the reason was, they said they're not going to open this winter.

BOB KELLEHER: US Steel said the plant may not reopen now until next April. Gangl and other steelworkers MPR interviewed described deep shock and frustration, facing another winter's high heating bills without work. The company blames market conditions, but the two plants around Hibbing are the only ones still idle in Minnesota.

A slight improvement in the market convinced four other plants in the state to come back online between July and the end of September. Hundreds of workers have been called back to work at those plants. Still, the steel market does remain soft, and that means the demand for taconite is soft, according to

Phil Englin, managing partner from World Steel Dynamics, which monitors the world steel industry. Englin says the budding rebound in iron mining is based mostly on a need to replace depleted steel inventories. He says there's no evidence of any sustained increase in demand for products made of steel.

PHIL ENGLIN: The number of washers, dryers, cars that are being sold-- yeah, the Cash for Clunkers being an exception-- a few more cars got sold in August. After that, they fell off a cliff again.

BOB KELLEHER: Inventories, he says, will soon be replenished. And manufacturers are not likely to boost production without a strong signal consumers are buying again.

PHIL ENGLIN: I think the outlook is tough for the next year or two, I would say, in the advanced world. Things will probably be a little better in the developing world. In the long run, Englin says the industry will rebound. That's because for mining companies, it's not like the 1980s anymore. The industry has learned how to weather the ups and downs much better.

In the past, they would have kept producing until they went out of business. Now, the mines can shut down quickly when demand slows and resume taconite production almost as fast. But the repeated regional booms and busts don't get any easier for residents, according to Dr. Steven Carter, a psychologist who practices in Virginia.

STEVEN CARTER: People have lost their jobs. They believe they're going to get them back. They've gone through similar ups and downs in the past, but they're not fully secure in that belief.

BOB KELLEHER: That insecurity is showing up in Carter's practice in Virginia, where the local mine just reopened a month ago after closing in the spring.

STEVE CARTER: I've seen more marital distress. I've seen couples that I don't think would normally be requesting help come in, and I've seen a certain-- some of them losing perspective that what is really stress from the economic situation that they find themselves in is being interpreted as problems in the relationship.

BOB KELLEHER: A few miles away in Nashwauk, Louis Chellico is passing another afternoon at his home. He's one of the workers who is hoping to be called back at the KeeTac mine but was not.

LOUIS CHELLICO: It's a lot of stress. It's hard on a guy.

BOB KELLEHER: Now with his one-year layoff anniversary approaching, Chellico faces a cutoff of his unemployment compensation. He's hoping a much-discussed extension of federal benefits will come through to help with the bills.

LOUIS CHELLICO: Just like everyone else-- mortgage, car payment, truck payment. If we don't get that extension, it's going to be a-- I don't know what we're going to do. It's getting more and more stressful as it gets closer and closer.

BOB KELLEHER: If the experts are right, the two closed mines might reopen early next year. But for many people, like Louis Chellico, that might not be soon enough. Unemployment benefits will be exhausted next month for the first wave of layoffs at the KeeTac mine. Bob Kelleher, Minnesota Public Radio News, Hibbing.


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