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Ground zero for rising unemployment

Elkhart, Ind., has one of the highest jobless rates in the country. Now the president is hoping to sell his stimulus package there.

By David Whitford, editor at large
Last Updated: February 9, 2009: 1:21 PM ET

New York (Fortune) -- President Obama spoke at Concord Community High School in Elkhart, Ind., on Monday, trying to make a case for his $827 billion economic stimulus package.

"I am calling on Congress to pass this bill immediately," the president said in a town hall meeting. "Folks here in Elkhart and across America need help right now, and they can't afford to keep on waiting for folks in Washington to get this done."

Why Elkhart? Not because they like him there - they don't really. Obama took Indiana, barely, in November but McCain beat him soundly in Elkhart with 56% of the vote. While a majority of Americans support the economic stimulus bill that Congress is debating, it might be a tough sell in Elkhart.

But if ever a town could use a little help from the federal government right now, it's Elkhart.

According to the latest numbers from the Bureau of Labor Statistics, the Elkhart-Goshen Metropolitan Statistical Area suffered the sharpest unemployment increase in America in 2008. The jobless rate jumped from 4.7% when the year began to a stunning 15.3% when it ended. That leaves Elkhart-Goshen with the third-highest U.S. unemployment rate overall, and the highest outside California.

Elkhart is one of those "traditional manufacturing economies" - a phrase that used to imply stability, but is now code for economic disaster. It's not a place where real estate speculators piled up bad loans, but people are losing their homes anyway.

Elkhart, on the Michigan border, with a population just over 50,000, was once home to the Dr. Miles Medical Company, which brought us Alka-Seltzer and Flintstone Vitamins. Conn-Selmer still makes trumpets for high-school bands there. Elkhart Brass makes firefighting equipment. And many companies in and around Elkhart make RVs and mobile homes (the Recreational Vehicle and Manufactured Housing Hall of Fame is there).

What happened to this "quiet masterpiece of the Midwest," as the Chamber of Commerce calls Elkhart? Higher gas prices led to layoffs in the RV industry, producing widespread devastation. Tax revenues are down. Foreclosures and food stamps, up. Job placement services, swamped.

The scope is hinted at in this scary collection of recent local headlines: "Plastics Manufacturing Company Fortis to Shut Down Elkhart, Indiana Plant." "Dexter Axle to close plant in Elkhart." "Elkhart County to cut back on plowing, paving, filling potholes." "Elkhart Jazz Festival shortchanged in city budget crunch."

Elkhart Mayor Dick Moore went to Washington the day after the inauguration to beg for $92.4 million for infrastructure projects that he says will put 2,300 people back to work. Looks like he may get his wish. To top of page

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