The economy of Omaha, Nebraska is linked to the city's status as a major commercial hub in the Midwestern United States since its founding in 1854. Dubbed the "Motor Mouth City" by The New York Times,Feder, J. "Omaha: Talk, Talk, Talk of Telemarketing", The New York Times. July 21, 1991. Retrieved 4/1/08. 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 Buffett of Berkshire Hathaway has lived in Omaha all of his life, as have the ConAgra Foods, Union Pacific Railroad and Mutual of Omaha Companies, and Kiewit Corporation, all Fortune 500 corporations."Omaha, Nebraska: The Good Life", Creighton University. Retrieved April 1, 2008.
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."Best places to live 2006: Omaha, Nebraska", Money. Retrieved April 1, 2008.
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.Piersol, D. (2007) "Deeper pockets", Lincoln Journal-Star. Retrieved 4/1/08.
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 1870 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.Pilgrim, S.C. (1996) Omaha Rail and Commerce Historic District. National Register of Historic Places, National Park Service. p 20. The city created a market house and a food-oriented warehousing district to meet the needs of this sector of the economy.
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 19th century.Mullens, P.A. (1901) Biographical Sketches of Edward Creighton and John A. Creighton. Creighton University. p 24. Emigrants, 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.Federal Writers Project. (1939) Nebraska. Nebraska State Historical Society. p 230.
The "Big Four" local breweries in Omaha were the Storz, Krug, Willow Springs and Metz breweries.Larsen, L.C. and Cotrell, B.J. (1997) The Gate City: A History of Omaha. University of Nebraska Press. p 144.
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.Menard, O.D. (1989) Political Bossism in Mid America: Tom Dennison's Omaha, 1900–1933. University Press of America. p. 41. The "Big Four" meat packers during this time were Armour, Wilson, Cudahy, and Swift. There were several breweries established throughout the city during this period. 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.Graham, J. (1999) "Omaha stockyards packing it in." Chicago Tribune. 3/28/99. Retrieved 6/23/07. The 116-year-old institution closed in 1999.Nolte, B.T. (1999) "Stockyards to leave South Omaha after 115 Years." Nebraska Farmer. 1/15/99.
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.Larsen and Cotrell. (1997) The Gate City: A History of Omaha. University of Nebraska Press. p 68.
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.Federal Writers Project. (1939) p 231.
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 Bank of Omaha, 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.Larsen and Cotrell. (1997) The Gate City: A history of Omaha. University of Nebraska Press.
Current economic sectors and industries
Currently, the service sector accounts for approximately 40 percent of total employment in Omaha. Other key sectors in the city include trade, transportation and utilities, finance, insurance, and real estate. Telecommunications and architecture/construction are also major influences on the city's local economy. The Greater Omaha Economic Development Partnership identifies the defense industry, manufacturing, and information technology as important areas as well."Top Business Sectors" Greater Omaha Economic Development Partnership. Retrieved 4/1/08.
The presence of the Strategic Air Command during the Cold War and the U.S. Strategic Command has led to a strong defense industry. The city's transportation has been vital to its 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 coordinated with many trucking companies serving the metropolitan area.
Studies also show that the Holland Foundation, which is based in Omaha, is one of the nation's most generous philanthropic foundations. "Top 50 U.S. Foundations Awarding Grants for Performing Arts, circa 2004" , Foundation Center. Retrieved 5/2/08.
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 Federal Reserve Bank of Kansas City. "Overview of the Tenth Federal Reserve District" . Retrieved 4/1/08. The nation's largest privately held bank, First National Bank of Omaha, as well as Fortune 1000 financial services companies Berkshire Hathaway and Mutual of Omaha make Omaha one of the highest density clusters of the country's financial sector. In addition, insurance companies based in Omaha include Blue Cross Blue Shield of Nebraska, Physicians Mutual, Woodmen of the World, and Berkshire Hathaway subsidiaries National Indemnity Company, and Central States Indemnity.
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."Kotok, C.D. "A New Brand of Tech Cities," Newsweek. April 30, 2001.