Recent Posts by Dan Miller

The Shrinking World of Newspapers: Chicago Edition

◆ A key factor is missing in the hand-wringing analysis over the inevitable purchase of the Sun-Times by Tronc’s Chicago Tribune, and it’s this:

The sales and marketing departments of the Tribune and Sun-Times will be combined.

⇒ And that foreshadows the death of the Sun-Times.

A Little History

The same death dance played out in the 1970s, when the Sun-Times and the Chicago Daily News comprised Field Enterprises’ two-newspaper portfolio, with ad sales staffers selling space in both newspapers to advertisers such as Sears, Carson’s, Z Frank and First National Bank.

But those sales pitches lasted microseconds when advertisers balked at buying space in two newspapers when the Sun-Times had more than twice the circulation of the Daily News.

It mattered not a whit that the demographics of the evening Daily News were superior to  the Sun-Times or that the quality of the content in the Daily News was more distinguished.

Advertisers weren’t interested in advertising in its pages, and ad sales staffers weren’t about to waste their sales call trying to convince advertisers otherwise.

By 1975, the Tribune had killed its afternoon paper, Chicago Today, and absorbed its 400,000 daily circulation into its million-plus base. That meant Tribune ad sales people could offer far more circulation and at a cheaper cost-per-thousand in a single newspaper and with a single sales pitch than the Sun-Times could by offering two newspapers and two sales pitches.

Why buy space in two newspapers when you could do better in one?

Sales efforts focused on the Sun-Times’ circulation, and the Daily News was ignored to death.

What’s Past Is Prologue

The same logic will apply in 2017.

When it comes time for a Tribune sales staffer to pitch an ad schedule to an advertiser, he’ll focus on the Tribune’s superior circulation.

Maybe on the way out the door, he’ll say, “Oh, wait. I have a Sun-Times media kit here. Want me to leave it?”

The answer already is all too clear.

 

Dan Miller is one of Chicago’s most respected and experienced economic journalists.

He served as Chairman of the Illinois Commerce Commission in the 1990s, then business editor of the Chicago Sun-Times, and, in recent years, as policy adviser to the Heartland Institute, a libertarian think tank.  He also co-founded the Chicago Innovation Awards, which as recognized best-practices in products and services for over 15 years.

US Job Market Is Tightening Significantly: Why It Matters. What Policies Would Help

◆ That tightening sound you hear in the economy is coming from the labor market.

And you soon may hear a more ominous sound – the US economy choking, unless policy makers begin addressing the regulatory and education constraints on labor.

The Evidence Is Increasingly Clear

 Commercial real estate contractors told the Wall Street Journal Monday (May 8) that major building projects are soaking up huge gulps of available electricians, carpenters and other subcontractor laborers.

Those labor-hungry projects include O’Hare modernization in Chicago, office-building projects in New York, condo and rental-housing projects in Boston, Miami and Los Angeles.

Elsewhere, shortages of auto mechanics due to increasing complexity of cars are driving up labor rates to where a certified master mechanic can command $100,000 pay check. Fiat Chrysler Corp. said its dealers – forget about your local auto mechanic — will need 25,000 new mechanics in the next five years.

With the US unemployment rate now at 4.4 percent – lowest since the recession began, according to the April jobs report – and with 700,000 workers having moved in the past year to fulltime status from part-time status, the market grows tighter.

It seems unlikely the Trump administration will encourage immigration to mitigate the shortage.

Exasperated employers are raising wage rates, but there are fewer workers on the sidelines to lure into jobs. That’s a stiff headwind for any economy, even one growing at the dismal 0.7 percent annual rate for the first quarter.

What Policies Could Help?

(1)  US business needs a skills-certification program for key jobs – an education and certification program that’s national in scope so certified workers can move easily and quickly into jobs in many states without having to jump through local-union apprenticeship hoops.

(2) Long term, the US education system has to confront its depressing record of failing to educate students for 21st Century jobs in the trades.

Indeed, social and education policies discourage students from investing in a trade-school education.

Dan Miller is one of Chicago’s most respected and experienced economic journalists.

He served as Chairman of the Illinois Commerce Commission in the 1990s, then business editor of the Chicago Sun-Times, and, in recent years, as policy adviser to the Heartland Institute, a libertarian think tank.  He also co-founded the Chicago Innovation Awards, which as recognized best-practices in products and services for over 15 years.