Wednesday, July 12, 2017

The Sad Tale of Janesville

In 2008 General Motors, rocked by the recession and facing record losses,  announced that it was closing its 78-year-old plant in Janesville, Wisconsin. Sociologist Amy Goldstein has written a book on what happened next, and it sounds grim. About 300 workers took jobs at other GM plants in Kansas City and Texas, but since they were unable to sell their Janesville homes they mostly left their families behind, becoming "GM Gypsies."

The rest tried to find other work, but in the midst of the recession there mostly wasn't any:
Some decided to retrain at the local Blackhawk Technical College, hoping to gain new skills and find new careers. Yet even then, the jobs weren’t there. One former GM worker, Matt, was one of many that enrolled at Blackhawk to train to become a lineman at the local utility company, Alliant Energy. But, as a rather candid conversation with his lecturers made clear, his chances of being hired were really rather low. Indeed, between 2008 and 2011, Goldstein found that those who had re-trained after the plant’s closure were, in actual fact, less likely to find work than those who did not re-train. And even those who did find work after completing their re-training picked up much lower wages than they received at GM. As Goldstein concludes, ‘job retraining, it turned out, was not a path to more work or better pay in and around Janesville, at least not during the time when jobs were so scarce’.

Yet, even after the economy had recovered, things were little better. In 2015, average incomes were still way below what they were when the GM plant was still open. Indeed this is one of the bleakest parts of Janesville: for years now, it’s been federal policy to re-train workers whose old jobs have gone so that they can ease into new jobs and avoid the dreaded ‘worker dislocation’. But, as Janesville shows, re-training doesn’t necessarily lead to new jobs let alone better ones. Unemployment levels may have now dropped to their pre-factory-closure levels, but incomes are way down, with little prospect of a revival anytime soon. While some workers have maintained pre-closure incomes – by travelling to other GM factories hundreds of miles away – the workers left behind are earning far less than they did at GM. Even when new employers come to town, the jobs on offer are nowhere near as well paid as they had been in the past. Dollar General, for instance, opened a distribution centre in Janesville, offering, on average, $16 an hour – GM once offered an average of $28 an hour.
To me this pretty much sums up the bad mood in America; tens of thousand of people have lost good jobs and will never again earn as much as they did in the factory days. Also notice the way ownership of our expensive homes can quickly become an albatross when the economy turns sour, preventing people from moving to places where the job prospects might be better.

If there is a silver lining to this story it's that while assembly work paid well, everybody hated it:
Not all residents initially saw the plant’s closure as a disaster. Some even viewed the impending end of GM in Janesville as an opportunity. One Goldstein spoke to, Bob, the executive director of the Southwest Wisconsin Workforce Board, felt ‘the shackle of big GM pay cheques bred complacency and tethered people to the assembly line for 30 years or 40 – for an entire working life, even if they hated the work’.

Indeed, as Goldstein’s cast of Janesville residents make clear, no one much liked working in the plant. But they did like getting paid. Some such as Jared, a GM worker for 13 years, downright hated the work, as did his father and father-in-law. But for $28 an hour, overtime and a raft of other union benefits, plenty like Jared were prepared to do something they hated. So, as Bob quietly hoped at the time, the ‘catastrophe might prove to be an unbidden opportunity to help people find the work paths that would have suited them all along’. Unfortunately, this didn’t happen.
If the end of factory work meant the rise of some other kind of work at comparable pay, we should probably celebrate that. But it hasn't, and that has embittered a generation.

1 comment:

G. Verloren said...

Tthis sounds like a community that relied way too heavily on a single source of incomes, which is something we've seen over and over again in history.

Fishing, logging, mining communities... it happens again and again. An industry which cannot be sustained moves in, workers follow, they make good money, they settle down to start families, the industry dries up in that particular location and moves on, and the firmly entrenched workers suddenly have no means to support themselves anymore.

In many cases, the workers grow accustomed to having high incomes, and begin spending more of that money that they probably should. They develop an expectation of a level of affluence beyond anyone'sability to sustain once the industry they work in inevitable moves on. They buy houses, they have children, they settle in permanently for the rest of their lives, not realizing that their entire lifestyle is tenuous. In their minds, the reward for their hand work doing awful jobs is supposed to be wealth and stability, and when those both inevitably disappear, they suddenly feel lost and robbed.

There are strong parallels to aspiring actors in Hollywood landing their first high paying jobs, and to up and coming musicians signing on to record labels. You hear all sorts of stories about people who work themselves into the ground because they're being offered very attractive wages, but they fail to realize those wages won't always be there for them, and they don't save and carefully manage their money, but rather spend it almost as fast as they can earn it.

The problem is one of overreliance on the goose that lays the golden egg, and a lack of diversification and planning for the future. Janesville propped itself up on a crutch, and never gave thought to how it would limp along once that crutch inevitably snapped in half.

Barring some great revelation on how to prevent this sort of thing from happening in the first place, I believe the only solution is government intervention after the fact. Retraining is definitely a step in the right direction, but there also needs to be a system of relocation. The government needs to be willing to help these people move elsewhere, to follow the jobs.

When a mine dries up, the mine companies leave town, because why wouldn't they? Realistically, shouldn't the mine workers leave too? And when advances in technology render a particular job or even and entire industry obsolete, the corporations manage to adapt and move on to new field. Shouldn't their employees do the same?

We need to have a system in place to deal with these problems. Those houses no one can manage to sell because they're in a now-deceased boom town? The government either needs to prevent people from building them and wasting their money on buying them, or they need to help people liquidate them after the fact.

Maybe we need to put floors or ceiling on the sale values of homes in boom towns, based on conservative government estimates of the longterm viability of the local economy. Because the actual people working in the mines and factories have to live somewhere, leaving it in private hands only seems to encourage exploitation and ripping people off. When the boom is happening, the demand for housing is high, and people end up paying through the nose for a place to live. When the boom ends, the demand plummets, and the houses are suddenly worthless. It's untenable.

Alternatively, maybe the government should just buy back the houses for some reasonable percentage of their sale price.

The point is, the boom and bust cycles we keep seeing need to have some sort of organized response designed to help the people caught in between. They need to not only be retrained, but relocated and reemployed. And we probably should do more in the way of preventative measures, educating people about the dangers of settling down to start a life when you work in a business without longterm prospects for stability and economic viability.