For those who recall its sweeping impact, the recession that struck the Dubuque area in the early 1980s serves as both a grim memory and a cautionary tale.
As the 1970s drew to a close, the economy appeared to be firing on all cylinders. Dubuque County was home to more than 43,000 jobs. About 25% of those positions were provided by a pair of cornerstone companies: John Deere Dubuque Works employed more than 8,000, while Dubuque Packing Co. had more than 2,000 workers.
Then, suddenly, the bottom fell out.
“In the early 1980s, we saw a depression in ag and a recession nationally,” recalled Rick Dickinson, president and CEO of Greater Dubuque Development Corp. “Dubuque was extremely vulnerable, and it was especially hard hit. A big reason was because we had all of our eggs in two baskets.”
The local economy collapsed swiftly.
Dubuque Packing and John Deere Dubuque Works each slashed jobs at a rapid clip, with the latter reducing its staff to about 1,500, Dickinson recalled.
Over the course of four years, Dubuque’s employment fell from 43,000 to 36,000. The local unemployment rate peaked in the early 1980s at 23% — the highest in the U.S. at the time.
More than 3½ decades later, the community seemingly has made its way to the opposite side of the economic spectrum.
The Dubuque metropolitan area — which covers all of Dubuque County — surpassed 62,000 jobs for the first time in May and added 200 more jobs in June.
The unemployment rate, meanwhile, was just 2.2% in June, the most recent month for which data has been released. That figure was a tick below the 2.3% jobless rate in June 2018 and below both the June 2019 state and national rates of 2.4% and 3.7%, respectively.
Perhaps most noteworthy is the number of employers who helped elevate the local economy to its current level.
In the early 1980s, John Deere and Dubuque Packing Co. accounted for about a quarter of the jobs in the county. Today, the top 19 employers collectively account for 25% of the jobs.
These job creators hail from a variety of industries, including health care, education, advanced manufacturing, insurance and finance.
Perhaps no other company encapsulates Dubuque’s transformation more than Cottingham & Butler.
The company’s history can be traced back to 1887, when Dixon Cottingham opened the doors of D. Cottingham insurance agency.
The firm remained a relatively small employer nearly a century after it was founded. Vice Chairman Andy Butler recalls that Cottingham & Butler employed 20 to 30 workers in the early 1980s.
He believes the economic turmoil of that era was jarring but ultimately beneficial, largely because it forced community leaders to embrace the public-private partnerships that ultimately propelled the community’s growth.
“It was a really difficult time, but I think it was transformational for Dubuque,” he said. “It brought about this community culture, where people banded together for a common cause. It was a springboard for what Dubuque turned itself into and what it is continuing to build upon.”
In the past three-plus decades, Cottingham & Butler’s growth has been staggering.
The company has introduced employee benefits and property and casualty third-party claims administration services, safety and loss prevention services, health care coordination and a variety of other services.
Today, it is the 25th-largest insurance broker in the nation and employs about 1,000 people, including 650 in Dubuque County.
The company has clients in all 50 states, and the vast majority are outside of Dubuque. Even so, Butler said the growth trajectories of his firm and the broader community are interconnected.
“As the business community has grown, the population has grown,” Butler said. “That means more people who were raised here and who choose to stay here. That is critical for a stable workforce.”
In recent decades, Dubuque Bank and Trust and its parent company, Heartland Financial USA, enjoyed massive growth as well.
When Heartland was founded in the early 1980s, it had just more than $200 million in assets. That total now has soared past $12 billion, making it the 80th-largest bank holding company in the nation.
Employment at the institution hovered around 100 in the early 1980s. Today, Heartland and Dubuque Bank and Trust employ 600 people in Dubuque.
DB&T President and CEO Tut Fuller emphasized that the bank’s ascendance would not be possible if not for Dubuque’s turnaround.
“As the largest financial institution in Dubuque, our success is almost completely tied to our community,” he said. “If Dubuque does well, our bank does well. On the flip side, if our bank is doing well, it is a pretty good indication that Dubuque is doing well.”
While employment in the county is more diverse and less reliant on agriculture and manufacturing, those industries still play an important role.
John Deere Dubuque Works, in particular, continues to be a pillar of the local economy. Its 2,600 workers make it the county’s largest employer. Company officials declined to comment for this story.
“What we see now is an economy that prides itself on advanced manufacturing, which means manufacturing jobs that require more skill and higher pay,” Dickinson said. “Then, you take the growth we have seen in three particular sectors — financial services, insurance and technology — and that is a big part of what makes up this economy.”
PLAN OF ATTACK
Fuller believes the region’s recent economic success is attributable to more than just good fortune.
“The only way you get from an undiversified economy with more than 20% unemployment to today’s economic landscape is by having those key decision-makers in the public and private sectors align toward a common goal,” he said.
Dickinson believes that the waning days of Dubuque’s meat-packing business represented a key moment. He noted that the city threw its support behind the operation, then known as Farmland Foods, in hopes of keeping it open as long as possible.
Farmland ultimately closed its doors around the turn of the century, but keeping the operation on life support as long as possible proved to be a vital stepping stone.
“The fact that they kept it open, it bought time for the city to figure out other ways of serving existing business and recruiting new ones,” Dickinson said.
In the late 1990s, the city purchased large swaths of land that ultimately would become Dubuque Industrial Center West, along Chavenelle Road, and Dubuque Technology Park, located along U.S. 61/151 in the Key West area.
Rockfarm Supply Chain Solutions, which was founded in 2008, is among the companies that now reside in the latter.
Co-founder Brad Stewart said the company began with a straightforward vision.
“Our focus was on seeking out midsized Midwest manufacturers and helping them gain a competitive edge,” he said.
The company now employs 50 in Dubuque and plans to hire an additional 20 in the near future.
While local clients are the “cornerstone” of Rockfarm’s business, Stewart said, the bulk of clients are outside the community.
Even so, he believes the diverse business environment in Dubuque has propelled Rockfarm forward. Dubuque Technology Park itself is a microcosm of that variety, with its mixture of architects, health care companies, accounting firms and tech companies.
“When you can find local companies that provide things like insurance, security, accounting (and) legal services, that propels our business forward,” Stewart said.
Dickinson said efforts to improve both the downtown and the riverfront also have been a boon to the economy.
The redevelopment of Lower Main Street and the Port of Dubuque have helped to establish Dubuque as a “community of choice,” he explained.
“That (Port of Dubuque project) helped bring people to the river when it used to be a place to avoid,” he said. “Up until 2000, for all practical purposes, it was a place that was inaccessible.”
Such amenities are critical to attracting and retaining talent, as well as building the area’s population.
That growth, in turn, is critical to supporting jobs in fields such as education and health care.
In smaller communities, achieving economic diversity can be a harder hill to climb.
Ron Brisbois, executive director of Grant County (Wis.) Economic Development Corp., said creating that kind of balance is a top priority.
“It is one of the things I have really preached,” he said. “It can help you weather economic storms. When you don’t, it creates a boom-or-bust situation.”
Economic data from the U.S. Census Bureau shows that Grant County has 150 institutions that employ at least 20 workers.
Thirty-two of these employers are classified as “retail trade” companies, while 27 are manufacturers, 21 are in health care and social assistance, and 21 are in accommodation and food services.
Seven finance and insurance companies employ 20 or more people, while just two of those employers are categorized as “professional, scientific and technical services.”
While there is some economic diversity in Grant County, Brisbois said the mix is not yet ideal.
“I do think we need to further diversify, try to target industries like tech and bring in more white-collar jobs to go along with the blue-collar jobs we have now,” he said.
Other rural communities are mindful of that balancing act as well.
Nicolas Hockenberry, director of Jackson County (Iowa) Economic Alliance, said “the majority of jobs” in that county are in the manufacturing sector, while ag also looms large in the local economy.
Census data shows that Jackson County is home to 32 manufacturing businesses, nine of which have 20 or more employees. Two of these companies employ more than 100.
Hockenberry said such a heavy reliance on one industry could leave the region vulnerable.
“One of the things we have conversations (with these manufacturers) about is ensuring that they are diverse in their customers,” he said. “It’s important that they are not tied to just one market segment.”
In that sense, he thinks Jackson County is on the right track.
“Our manufacturing firms are doing so many different things, and their products are going to different markets,” he said. “It goes all the way from your traditional metal fabrication and CNC up to Collins Aerospace, which is in avionics equipment manufacturing. That helps create a more resilient economy.”
In Jo Daviess County, Ill., the impact of tourism is apparent in employment numbers.
The county boasts 102 retail trade companies, 10 of which employ 20 workers or more. Meanwhile, there are 17 accommodation and food services companies with at least 20 workers.
Jerry Howard, membership ambassador for Galena Area Chamber of Commerce, believes these numbers reflect an economy that revolves around the attraction of tourists.
“We’ve created a pretty vibrant downtown in Galena, and I think we’re continuing to move forward,” he said.
Howard did, however, acknowledge that tourism-centric approach could pose problems “if the economy takes a dive.” And while he is confident in the retail and hospitality offerings in Galena, he knows a diverse economy ultimately is a more resilient one.
“If we had the chance to add some more industry, I would absolutely welcome that,” he said.
The U.S. now is in its 122nd month of uninterrupted economic expansion, marking the longest period of continued growth in the country’s history.
Even so, global economic struggles and ongoing trade disputes have sparked concern that a recession looms in the not-too-distant future.
Dickinson, of GDDC, said a community’s economic diversification is particularly important at times when conditions are not ideal. Having more large employers, spread across a variety of industries, is the surest way to prevent immediate and massive economic disruptions.
“No community is recession-proof,” Dickinson said. “But you can become — and I believe we are — recession-resistant.”
Evidence of this resilience was on display a decade ago, when the U.S. endured its worst economic turmoil since the Great Depression.
Dubuque saw only a modest increase in unemployment, while other metro areas in the U.S. were hit much harder.
“For all practical purposes, we were unscathed,” Dickinson said.
Fuller, of DB&T, believes that, in one sense, economic turmoil already has arrived.
He noted that the ag industry — from row crop farmers to livestock and dairy producers — has been in a recession for multiple years. Conditions for farmers today are perhaps the worst they have faced since the 1980s.
The regional economy has soldiered on nonetheless.
“Because of our economic diversification, Dubuque is still at near-record-low unemployment levels,” he said.
Dickinson emphasized that external forces are not Dubuque’s greatest concern. Rather, he believes the key to sustained success is continued investment and commitment within the community.
“I’m more concerned about our community becoming complacent than I am about the national economy dragging us down,” he said. “Any economy is more vulnerable to what they do than what happens from the outside.
Fuller, meanwhile, believes continued economic success will require strong leadership.
“(What has happened in Dubuque) is a great story,” he said. “It is up to the current business leaders and that next generation of business leaders to make sure that story continues.”