Economy_of_Omaha,_Nebraska

Economy of Omaha, Nebraska

The Omaha Nebraska has been a major commercial hub in the Midwestern United States since its founding in 1854. Dubbed the "Motor Mouth City" by The New York Times, Omaha is widely regarded as the telecommunications capital of the United States. The city's economy includes agriculture, food processing, insurance, transportation, healthcare and education. Warren Buffet of Berkshire Hathaway has lived in Omaha all of his life, as have the ConAgra Foods, Union Pacific Railroad and Mutual of Omaha Companies, all Fortune 500 corporations.

According to the Nebraska Department of Labor, in March 2008 the unemployment rate in Omaha was 3.9 percent. Between 2000 and 2005 Omaha's job growth was 0.70 percent. In 2006 the sales tax rate was seven percent, with income tax at 6.68 percent. That same year the median family income was $56,869, with a 1.80 percent housing price gain.

In September 2007 the city ranked eighth among the 50 largest cities in the United States in both per-capita billionaires and Fortune 500 companies. According to USA Today, no other city in the country could claim a ranking as high as Omaha on both lists. The paper identified the richest residents of Omaha as Ameritrade founder Joe Ricketts, worth $1.5 billion; Walter Scott of Peter Kiewit Sons, worth $1.2 billion; and Warren Buffett, then valued by Forbes magazine at $44 billion. The city ranks fourteenth among the states for philanthropic giving, according to the Catalogue of Philanthropy.

Historic economic sectors and industries

In the years after the founding of Omaha, the city's economy grew in cycles. Early success as a transportation hub drew a variety of economic sectors to the downtown area. The early warehousing area was located next to the Missouri River, drawings good from steamboats coming upriver from Kansas City and St. Louis, Missouri, as well as points east. The Union Pacific Railroad has been headquartered in Omaha since its inception, eventually bringing the meatpacking, stockyard, and regional brewing companies to the city. The American Smelting and Refining Company owned a large plant on the Omaha riverfront from 1881 into the 1990s, when the Environmental Protection Agency forced it to close.

Omaha has a long history of labor unrest and conflict between management and workers. As a long-time open shop the city gained the reputation for actively breaking unions; however, with the loss of large-scale railroad operations and meat production, the labor-driven protests, rioting and civil unrest of the past appears to be gone.

Wholesaling and manufacturing

In 1880 Omaha began its role as a wholesale jobbing center for the United States. The wholesale jobber purchased goods directly from the manufacturer, transported these goods via the railroads, and sold them directly to small businesses through traveling salesmen. Omaha jobbers handled a wide variety of wholesale products along the Great Platte River Road and beyond, including groceries, dry goods, hardware, fruits, paper, and liquor.

Omaha earned its nickname, the "Gateway to the West", because of its central location as a transportation hub for the United States in the middle and late 1800s. Emmigrants, gold seekers, Mormons, freighters, Native Americans, speculators and land sharks all contributed. The Omaha Claim Club was an early land claim seller, court, jury and enforcement group. Jobbers Canyon grew as a warehousing center as carriage factories, wholesale houses, and barbed wire factories, along with Downtown Omaha department stores such as Brandeis and hotels such as Hotel Fontenelle. The city's breweries, brickyards, iron works, flour mills, and the Union Pacific headquarters caused the city to swell rapidly between the 1880s and the 1920s.

Businesses

Warehousing and manufacturing operations out of Omaha from its founding through the 1920s include the Western Bridge and Construction Company. Other important businesses included the Byron Reed Company and the N.P. Dodge Company.

Stockyards and meatpacking

The meatpacking industry, built in conjunction with the Omaha Stockyards, started to grow in the 1890s, and provided financial strength to the city through the 1970s. A fierce rival of Chicago's Union Stock Yards, the Omaha Stockyards were third in the nation for production by 1890. In 1947 they were second only to Chicago in worldwide ratings. Omaha overtook Chicago as the U.S.'s largest livestock market and meat packing industry center in 1955, a title which it held until 1971. The 116-year-old institution closed in 1999.

Businesses

There were several small-scale meatpacking operations in Omaha during this period. Large plants in Omaha included Armour, Cudahy, Swift and Morris, along with several smaller companies. All together they employed over 13,000 men by the 1950s.

Transportation

The Missouri River provided the initial source of revenue for young Omaha, as fur trappers such as Manuel Lisa used the area to build their inland empires with local Native American tribes. As steamboats started pouring in goods manufactured in the Eastern United States, thousands of tons of goods came through the city. However, the problem of transporting materials for the growing Midwestern United States needed to be addressed, which luckily opened the doorways to the city's major growth engine in its earliest years. The second period of growth in Omaha, from approximately 1865 through the 1880s, is attributed solely to the city's railroad connections, which drew almost all significant rail traffic from the Pacific Northwest through the area. By the 1870s, Omaha had seven major rail lines.

Major bus lines and airlines have traveled through the city for almost 100 years. Several major highways and bridges come into the city as well.

Businesspeople

Early businesspeople who were important to the growth and development of the city include a variety of bankers, investors, promoters, lawyers, and entrepreneurs. Omaha is said to have been founded by William D. Brown, the entrepreneur behind the Lone Tree Ferry which brought settlers across from Council Bluffs, Iowa. Alfred D. Jones was a surveyor and lawyer who first platted the city. Later the brothers Edward and John A. Creighton traveled west from their native Ohio planting telegraph wires along the way. Their contributions to the city's growth were innumerable, with varied backgrounds in banking, investing and philanthropy. Similarly, the Kountze family's impact on the city was immense. Augustus and his brother Herman founded the bank that became the First National of Nebraska, which today is the largest independent bank in the U.S., and is still headquartered in Omaha. Gilbert Hitchcock and Edward Rosewater were among the many influential newspaper editors in the city, founding empires that promoted, molded and drove economic development. Frederick Krug, Frederick Metz and Gottlieb Storz were all early beer brewers, with counterparts in the meatpacking industry included Edward Cudahy, Sr. among others.

Current economic sectors and industries

Currently the service sector accounts for nearly 40 percent of total employment in Omaha. Other key sectors are trade, transportation and utilities, as well as the finance, insurance and real estate sectors. Telecommunications and architecture/construction are also major influences on the local economy. The Greater Omaha Economic Development Partnership identifies the defense industry, manufacturing, and information technology as important areas, as well.

The presence of the Strategic Air Command during the Cold War and the U.S. Strategic Command has led to a strong defense industry. Transportation in Omaha has been vital to the city's growth, with more than 144 million pounds of cargo passing through Eppley Airfield in 2004. The Union Pacific and several other major railroads provide freight service that is coordinated with many of the trucking companies serving the metropolitan area.

Studies also show that the Holland Foundation, which is based in Omaha, is one of the most generous philanthropic foundations in the United States.

Finance and insurance

The insurance industry has also been important to the city's fiscal well-being, while its finance and real estate sectors have been less-so than the nation as a whole. The nation’s largest privately held bank, First National of Nebraska, as well as three Fortune 1000 financial services companies: Berkshire Hathaway, Mutual of Omaha and TD Ameritrade, make Omaha one of the highest density clusters of the financial sector in the country.

Telecommunications and information technology

According to Newsweek magazine, "Omaha is where the blue-collar work of the information economy is done. Phones are answered, money is counted, and data are processed. Six national fiber optic networks converge here."

The telecommunications industry has gravitated to Omaha over the last 30 years. After the U.S. government relocated the Strategic Air Command here after World War II the city became home to one of the world's most advanced and secure phone systems. Other factors in the city's success include Omaha's location in the Central Time Zone, making it more convenient to call either coast during the work day, as well as local speech patterns, described as "pure American," making it easily understood everywhere. Nebraska state regulators granted local phone companies wide latitude to deploy new services rapidly, and Omaha's Metropolitan Community College created telecommunications-related courses and training programs. Since the early 1980s a number of large hotel and travel reservation operations, including those for Marriott, Hyatt, Radisson and Westin hotels, as well as the traffic information center for Greyhound Bus Lines have all been located in the city. After the AT&T breakup, US West, the phone company whose 14-state territory includes Nebraska, adopted the slogan "Dial 800 and get Omaha" to promote its services.

Omaha was one of the first U.S. cities to develop a fiber optic network. Over the past 10 years its telecommunications foundation has expanded into a thriving information technology sector. Today the city has several educational facilities focused on information technology and telecommunications, including the University of Nebraska's Peter Kiewit Institute, Creighton University's Joe Ricketts Center in Electronic Commerce and Database Marketing, the Creighton Institute of Information Technology Management and programs at Bellevue University.

Companies

The largest employer in the Omaha metropolitan area is the Offutt Air Force Base, which employs more than 10,000 military and civilian workers. Next is Alegent Health, with approximately 7,500 employees, followed by Omaha Public Schools and First Data Corporation, each with approximately 7,000 employees. Other major employers include Methodist Health System, Mutual of Omaha, ConAgra Foods, Nebraska Health System, Odyssey Staffing, Inc., Staff Mid-America and the West Corporation.

Businesspeople

''For further information see Businesspeople from Omaha, Nebraska

According to USA Today, Omaha ranks eighth among the nation's 50 largest cities in both per-capita billionaires and Fortune 500 companies. Warren Buffett, nicknamed the "Oracle of Omaha", was ranked the richest person in the world in 2007richest people in the world. Other influential businesspeople in the area include Cathy Hughes, owner of Radio One.

Retail

The Dayton-Hudson Company entered the hypermarket format in 1995 by opening its first SuperTarget store in Omaha.

Headquarters

Omaha has five companies listed on the Fortune 500 list, including Berkshire Hathaway (#12), Union Pacific (#151), ConAgra Foods, Inc. (#173), Peter Kiewit and Sons, Inc. (#446) and Mutual of Omaha (#489). Omaha is home to the headquarters of several other major corporations, including The Gallup Organization, TD Ameritrade, infoUSA, Werner Enterprises and First National Bank. Many large technology firms have major operations or operational headquarters in Omaha, including First Data, PayPal and LinkedIn. The city is also home to three of the 30 largest architecture firms in the United States, including HDR, Inc., DLR Group, Inc., and Leo A. Daly Co.. The Lozier Corporation, First Data Corp, ITI Marketing Services, Omaha Steaks, Pamida, Oriental Trading Company, Valmont Industries, and Godfather's Pizza also are based in the city.

Current urban growth

Recently the city has experienced a large amount of economic growth. In the downtown area the Omaha World-Herald's Freedom Center, the First National Center, the Omaha Convention Center and Arena and the Gallup University campus have each been identified as central to the city's revitalization efforts. WallStreet Tower Omaha is a downtown addition that will be the third tallest building in the city when its finished. The Missouri River waterfront development project features a pedestrian bridge between Omaha and Council Bluffs, as well as two condominium towers and an area for retail and restaurants. In the north downtown area redevelopment has been ongoing, with interest piquing after the recent announcement of a new downtown baseball stadium for the College World Series in the area.

In West Omaha, parts of which were covered in cornfields as recently as 2002, several commercial districts and high wealth neighborhoods have developed. A mixed-use development in southwest Omaha called Coventry will be a complex of mansions, commercial development, and retail/restaurants. Projects are also under way for improving North Omaha. In the Midtown area, Mutual of Omaha is redeveloping an area bordering 31st to 33rd streets and Dodge to Harney streets that is called "Midtown Crossing at Turner Park. Featuring condominiums, apartments and an Element Hotel, the area will also host a movie theater, grocery store, restaurants and a health club. After renovating and expanding the public Turner Park, the development seeks to be a catalyst for further redevelopment in the area. Another mixed-use project in Midtown is situated on the site of the former Ak-Sar-Ben Collesium. Aksarben Village will be a complex of restaurants, shops, lounges and clubs along with a theater and residential areas.

Current poverty and economic isolation

Census data from 2000 in Douglas County show more than 7,800 families live below the poverty line, about 6.7 percent of families. The director of a statewide poverty advocacy group was quoted as saying in 2007, "In Omaha, you start talking about low-income issues, people assume you’re talking about minority issues... As of October of 2007, the city of Omaha, the 42nd largest in the country, has the fifth highest percentage of low-income African Americans in the country.