The Associated Press has created an interactive map that can be used as a resource in determining where economic pressure is the greatest and least across the country. The map calculates a stress index for the current month and compares that figure to October 2007 figures for unemployment, foreclosure, and bankruptcy rates.

In his introductory comments, author Ted Anthony stated:

• “Places with large numbers of government jobs – state capitals, university towns, communities with concentrations of hospitals – remain fairly recession-proof. These are places like Columbia, Mo.; Madison, Wis.; the Raleigh, N.C., area; and Athens, Ga.”
• “State government is not hurting that much – at least, not yet.”

Those two statements lend additional support to MCH’s position that institutions are the B2B Growth Markets of 2009!

John F. Hood
President, MCH, Inc.

MCH has been talking about the advantages of B2i, the recession resistant institutional sector of the economy, for years. According to recent newspaper headlines the institutional sector is getting hit as hard as businesses. But it is not. It’s the bad news that gets attention and readership and the headlines and news stories are biased accordingly.

Here are some recent examples:

• Cape May Herald.com (New Jersey) “February Unemployment Rate Jumps to 8.2 Percent”
• The Daily Astorian (Oregon) “Unemployment rises with economic tide”
• DAILY HERALD (Utah) “Utah’s job losses hit new high”
• The Detroit News (Michigan) “State jobless rate up to 12%”

Buried in each of the articles, typically near the end, are the following statements (in order):

• (NJ) The only area of significant job growth was in education and health services, which added 3,600 jobs in February. Employment in this industry sector has continued to add jobs (+13,600 over the year), running counter to recessionary declines recorded in every other industry sector.
• (OR) Across Clatsop, Columbia and Tillamook counties, healthcare is the one industry that has been growing over the past year. In February, Clatsop County lost 180 jobs in the private sector and governments added 40. Mining and logging employment fell by 60 jobs, construction cut 90 and manufacturing lost 40 and retail trade dropped 40 jobs. Local government education gained 70 jobs. … In Columbia County, the private sector lost 70 jobs and governments added 70. Manufacturing cut 60 jobs, trade cut 30 but educational and health services added 20. Local government education added 70 jobs.
• (UT) On a brighter note, the government and healthcare sectors in Utah are still hiring. The federal, state and local government sectors added 6,800 jobs in February from a year ago, while the health care industry added 3,000 jobs from a year ago, albeit at a slower rate.
• (MI) The education and health care sectors have been the only employment categories to show an increase since February 2008, posting a gain of 10,000 jobs.

Let’s examine another, more specific example:

The Kansas City Star “KCK school board cutting 36 central office slots”

Here is the text of the article in its entirety (bolded text is mine):

“The Kansas City, Kan., school board formally eliminated 36 central office positions Tuesday night, preparing for big budget cuts next year.

With vacant positions, the cut means 26 employees will lose their jobs and two others will be asked to work fewer hours for less pay.

A second wave of staff reductions starts Friday when preliminary pink slips are issued to about 50 employees, including teachers, aides, building-level administrators and more.

The pink slips will be preliminary because board members won’t give final approval to the second wave of cuts until at least April 14. Even then district officials said they expected to recall some of those teachers and employees depending on state funding, stimulus money and rate of attrition.

Board members had agreed to the plan to give employees as much notice as possible and comply with a state deadline that designates when districts must give teachers a contract.

State officials told the district to prepare to lose at least 6 percent of state funding next year – a loss of about $16 million.

Although the news is bleak, it’s not nearly as grim as board members had once expected. The board had feared it might have to eliminate up to 185 positions from a staff of 3,450.

Unlike teachers and those who learn their fate on Friday, district officials said it was unlikely the central office positions would be recalled. Those eliminated include custodians and employees from human resources, student and family services and elsewhere.

Assistant Superintendent J.D. Rios presented the report with a “heavy heart,” but said he saw few options if the district wanted to preserve instruction.

“Frankly the news from the state gets worse,” he said.

Affected employees will work through the school year.”
—————————————–

Let me try and help you interpret this article. Can you tell me how many education jobs will be lost? I doubt it. First of all, none until after the school year several months away. So why the early notice? One reason is institutions like the Kansas City Kansas School District can’t spend money they don’t have. If they are told they won’t have enough, they inform their employees quickly (as a matter of law). But then if the money is restored, so are the jobs. So this article is written as if the stimulus funding doesn’t exist when everyone knows it does, and the money is provided specifically to prevent job losses in education. Of course, restored jobs don’t make headlines. If you can tell what’s really happening from this article, please let me know where the Dow Jones Industrial Average will be in a few months. We’ll both make a killing.

A similar thing happened in California in 2003. Tens of thousands of teachers got layoff notices under state law. In the end relatively few lost their jobs. The layoff notices got the press but the reality ended up differently.

The bottom line? Education, healthcare, and government (B2i in shorthand) are expanding while business is contracting. As a share of the economy B2i is growing while the rest of B2B is shrinking. The stimulus spending just getting underway will accelerate the growth of B2i. If you are looking for opportunity in this time of gloom, B2i is it. And if you are going to read those newspaper articles, read until the end and be a little skeptical.

Scanning headlines today can either make you worried or hopeful depending on what you’re most concerned about. The Washington Post reported today that President Obama’s budget would require the federal government to hire tens of thousands of new workers. With a combination of increased spending and retiring baby boomers, the federal government will probably remain the brightest spot in the employment sector for the next year or so.

The Department of Veterans Affairs is estimating it will hire more than 17,000 employees by the end of 2009. The Social Security Administration may receive a 10% increase that will help fund hiring front-line and field staff.

In the healthcare sector, funds are already starting to flow. President Obama released $155 million of ARRA funds that will support 126 new health centers. Although this is a small allocation, it’s a good indicator that agencies are abiding with the President’s goal of quick disbursment of funds. Click here to see the state-by-state funding distribution and job growth projections.

Federal agencies are to begin reporting tomorrow on the use of funds so we’ll be watching the news closely.

CNN used data from RealtyTrac, The National Bureau of Economic Research, and the US Bureau of Labor Statistics to create an interactive map showing unemployment, employment, and foreclosure trends. Users can capture statistical information for a specific month or view the changes in each category from the time the recession began in December of 2007 through December 2009. MCH has been tracking the impact of the economic crisis for many months and we have consistently reported that safe havens are the education, government, and healthcare sectors. Although every industry has suffered, the job situation in the safe haven industries is on the positive side of the scale.

President Obama will address a joint session of Congress tonight and is expected to provide a high-level overview of the administration’s recovery plan.

The White House has released details about the state-level impact of the newly signed economic recovery package. The report estimates that the combination of tax relief, safety net enhancements, and discretionary government spending will “create or save 3.5 million jobs over the next two years,” adding that the “Jobs created will be in a range of industries from clean energy to health care, with over 90% in the private sector.”

• OVERVIEW ON AMERICAN RECOVERY AND REINVESTMENT ACT
• IMPACT OF AMERICAN RECOVERY AND REINVESTMENT ACT ON WORKING FAMILIES
• EMPLOYMENT NUMBERS BY STATE
• EMPLOYMENT NUMBERS BY CONGRESSIONAL DISTRICT
• EDUCATION FACT SHEET
• ENERGY FACT SHEET
• HEALTH CARE FACT SHEET
• INFRASTRUCTURE FACT SHEET

Last night, President Obama spoke at a dinner in honor of the 200th anniversary of Abraham Lincoln’s birth. This 15-minute speech deftly sums up his philosophy about why government exists and what he believes government should do. Whether you agree or disagree with his approach, it’s important for B2B marketers to understand Mr. Obama’s mindset about government’s role in solving problems.

Referring to the mindset that prevailed under the Bush administration, the president said:

“what’s dominated is a philosophy that says every problem can be solved if only government would step out of the way; that if government were just dismantled, divvied up into tax breaks, it could somehow benefit us all.

“Such knee-jerk disdain for government — this constant rejection of any common endeavor — cannot rebuild our levees or our roads or our bridges. It can’t refurbish our schools or modernize our health care system; it can’t lead to the next medical discovery or yield the research and technology that will spark a clean energy economy. Only a nation can do these things.”

His remarks indicate that he sees America’s institutions — local government agencies, schools, hospitals, etc. — as essential organizations in improving the quality of life and driving economic growth. This is further evidence that the Obama administration and Congressional Democrats will continue to fund the growth of institutions over the current term.

The first part of the speech is embedded below, and the second part will run after, assuming that we’ve configured things correctly.

USA Today featured a job growth forecast, prepared by Moody’s Economy.com. The report is segmented by geographic region and 14 key industries. Although the forecast for job growth, like the economy, is for the situation to get worse before it gets better, Education, Health Services, and Government are segments that are projected to either remain stable or grow in 2009. Manufacturing, Retail Trade, and Construction are industry segments that may not experience growth until at least 2010.

Moody’s will be adding interactive graphics on 318 metro areas in the coming weeks.

Kirk Chritton, Marketing Director
MCH, Inc.
kirkc@mailings.com

The stimulus bill has — as expected — changed in many ways in its trip through the Senate. Because the support of a small handful of moderate Republican senators will be required for final passage, the version of the bill that becomes law is likely to look much more like the Senate version than the House version. The Senate’s changes may have significant importance for marketers who are trying to align their product development and promotional strategies to the emerging legislation.

• The largest cut, $40 billion, was in the fund to stabilize state budgets. Had this money remained intact, many states with substantial budget gaps would have been made whole, and the state budget crisis that MCH tracks in our BudgetAware reports would have been greatly reduced in importance. Without the original funding, many states will still struggle to meet the requirements of their balanced budget requirements. MCH is currently developing the next release of the BudgetAware Bulletin, which will measure the current and expected budget pressure in each state.
• Preventative health initiatives had been targeted to receive $5.8 billion in the House bill. This money was likely to funnel down to a wide variety of public health agencies, clinics, and social service agencies.
• School construction funds totaling $16 billion were removed from the bill. That will reduce the potential opportunities for construction contractors and for the marketers who provide the furniture, fittings, and other products that are needed to stock new classrooms.

The list of items cut is long, but the overall scope of the spending is still large (more than $280 billion), leaving many opportunities for marketers who can align their offers with the initiatives of the bill.

On February 18th, I’ll join MCH President John F. Hood to present a free webinar (register here) in which we’ll review the final legislation. We will present an overview the opportunities and urgent action items for companies who hope to benefit from the stimulus spending. If you have questions about the funding, you can reach me at kirkc@mailings.com.

CNN obtained a list of the items that were either partially or fully eliminated from the stimulus package by the bipartisan committee. Highlighted below are the cuts that will negatively impact healthcare, education, and technology. In addition to the listed funds, institutions will also be impacted by the $40 billion cut from the proposal for state fiscal stabilization.

• $19.5 Billion – School & Higher Ed Construction
• $2 Billion – Broadband
• $2 Billion – Health Information Technology Grants
• $1 Billion – Head Start
• $600 Million – Title I (NCLB)
• $100 Million – Distance Learning
• $98 Million – School Nutrition

After the Senate votes on the bill, it will go to committee to iron out the differences.

In a town hall meeting in Indiana today, the President discussed the economic stimulus plan, saying “You know, look, it’s not perfect…But it is the right size, it is the right scope…it has the right priorities to create jobs that will jump-start our economy.”

President Obama will address the nation from the White House tonight.

Free MCH Webinar – Stimulus Marketing: Thrive in ’09
Is your company ready to lead the economic recovery?
February 18th, 11:00 a.m. Central Time

The federal government is providing hundreds of billions of dollars in stimulus funds for institutions including local governments, schools, and healthcare systems to spend with America’s businesses. Are you and your company in the best position to capitalize on these emerging opportunities?

This webinar will help you follow the money and identify:

• Which agencies will be receiving the money.
• Which decisions makers will spend those funds.
• How the term “use or lose it” can be a golden revenue opportunity.
• How your company can benefit.
• Why NOW is the time for institutions.

Join us on Wednesday, February 18th at 11:00 central for this free webinar. MCH presenters are John Hood, President and Kirk Chritton, Director of Marketing & Product Development.

Why should you attend?
After our previous webinar, 90% of survey respondents said they would change their 2009 marketing strategy based on the information presented.

“I have referenced the webinar to my clients…the information is a literal goldmine for the business I’m in.”

“We were looking for some direction on who to target in 2009…this webinar helped to clear some of the questions.”

Who should attend?
CEOs, CMOs, B2B Sales and Marketing VPs, Directors, Managers, Circulation Directors, List Brokers, and anyone whose company needs to thrive in ’09.

Click here to register for the Free February 18th webinar!