TOPICS > Economy > Making Sen$e

It’s a slow, painful recovery for this former manufacturing town

May 4, 2017 at 6:30 PM EDT
Once a proud industrial town, Janesville, Wisconsin, was knocked for a loop in 2008 when General Motors idled its assembly plant, the area's long-time largest employer. Economics correspondent Paul Solman talks to Amy Goldstein, author of "Janesville: An American Story," about the complicated picture of how the town and its people have tried to recover and adapt.
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HARI SREENIVASAN: But, first, the story of what happened to Janesville, Wisconsin, after its biggest employer shutdown. It’s the hometown of House Speaker Paul Ryan.

Economics correspondent Paul Solman reports. It’s part of the series Making Sen$e which airs Thursdays on the NewsHour.

PAUL SOLMAN: At Janesville, Wisconsin’s Parker High School, there’s a room that’s unmarked, and usually closed.

WOMAN: The Parker Closet is a resource area for students that are struggling financially. And so, we offer food, toiletries, clothing, school supplies.

PAUL SOLMAN: All free. All donated. A larder for the hungry begun surreptitiously by teacher Deri Eastman in 2008, when this proud industrial town of 63,000 was knocked for a loop.

General Motors idled the Janesville assembly plant, for nearly a century, the area’s largest employer.

AMY GOLDSTEIN, Author, “Janesville: An American Story”: This was the oldest operating plant in the United States when it shut down.

PAUL SOLMAN: Journalist Amy Goldstein.

AMY GOLDSTEIN: In 1919, it started making tractors. And in 1923, it began turning out Chevrolet trucks.

MUSIC: On Wisconsin! On Wisconsin!

PAUL SOLMAN: For decades thereafter, a job at the plant was a ticket to the middle class.

Dave Vaughn went to the plant straight from high school, retired after 35 years.

DAVE VAUGHN, Retired GM Worker: When I hired in in 1967, there were approximately 7,200 people that worked there. It was like a small city. It was security. It was good benefits. I had a vested pension.

PAUL SOLMAN: Even by the time the last Chevy Tahoe rolled off the assembly line, there were still 1,200 workers making $28 an hour, all laid off, along with thousands of others at local GM suppliers.

DAVE VAUGHN: I knew a lot of the people down there — families, friends, neighbors. That’s a lot of people in one little city of Janesville.

PAUL SOLMAN: Vaughn’s son and daughter-in-law both lost their jobs at Lear, which made seats for GM vehicles.

MIKE VAUGHN, Former Lear Worker: I was shocked. Then I guess I was scared. What’s next? All of a sudden, we’re both unemployed. Financially, what are we going to do?

PAUL SOLMAN: Mike Vaughn’s wife Barb felt the same, even though the job had taken quite a toll on her.

BARB VAUGHN, Mike Vaughn’s Spouse: I was working with bolts about that big around and that long, torquing them into the seat. I had surgery on my shoulder. And then I ended up with a surgery on my wrist.

PAUL SOLMAN: So, some relief for Barb; none at all for Mike.

MIKE VAUGHN: At the time I was the labor leader for almost 900 people, and ultimately I had to be a part of giving the news that the plant is closing.

PAUL SOLMAN: What was that process like?

MIKE VAUGHN: They were angry, they were upset, they were hurt, and they were scared.

PAUL SOLMAN: It was shortly after this that Deri Eastman started slipping day-to-day essentials to formerly middle- class students, now struggling, stressed and often embarrassed.

DERI EASTMAN, Social Studies Teacher, Parker High School: Some of the kids were, “Wow, I can’t believe this all is in here” and some of them would be very open to taking things, others would be like, “Nope, we’re OK.”

PAUL SOLMAN: About 250 kids made use of the closet, including two brothers who asked for soap and shampoo after their mother’s daycare business went bust.

DERI EASTMAN: When the plant closed, the parents were home. They didn’t need a daycare anymore and so Carrie’s Day Care Center kind of washed up. And I remember realizing this was going to be a huge ripple effect for Janesville.

PAUL SOLMAN: In all, the region lost some 9,000 jobs. Amy Goldstein’s book, “Janesville: An American Story,” is about what came next.

AMY GOLDSTEIN: This is a story of what choices people made when there were no good choices left, because it was impossible to keep your income and stay working here. Some people chose to stay here and make less money, and some of the GMers chose to work farther away and keep up their standard of living.

PAUL SOLMAN: Thus the term “GM Gypsies,” workers who accepted a transfer to other GM plants hundreds of miles away.

MAN: Good morning, transferees! How many of you all this is the first move you’ve ever made?

There will be difficulties. I’m living experience of it. I’ve got one failed marriage behind me.

AMY GOLDSTEIN: Indiana was the closest place you could work, and Lordstown, Ohio. So, these families were very split up, and to this day, some of the families are still split up with workers coming home, depending on how far away they are, once a week, once a month.

PAUL SOLMAN: But other workers took the path so often pushed in de-industrializing America these last few decades — stay in town and go back to school for retraining — in Janesville, at highly-respected Blackhawk Technical College, tuition paid by the federal government. It was here that the Vaughns trained to reinvent themselves.

MIKE VAUGHN: It was obviously it was scary. It was something that was uncharted and unknown.

PAUL SOLMAN: Mike stuck it out and finished an associate’s degree in human resource management.

MIKE VAUGHN: Because I’d been unemployed, I took the first job that was offered to me, which was a second shift human resources position at Seneca Foods Corporation.

PAUL SOLMAN: And what was the difference in pay?

MIKE VAUGHN: It was a lot less pay. Yes, a lot less pay.

PAUL SOLMAN: Barb, long ashamed that she’d dropped out of high school, quickly got her diploma and then a criminal justice associate’s degree and after that, her bachelor’s.

MIKE VAUGHN: I can’t even describe how focused she was.

BARB VAUGHN: I couldn’t have anything less than a 4.0.

MIKE VAUGHN: She couldn’t. She was a perfectionist. She had to have straight A’s.

BARB VAUGHN: I received an A-minus and it just threw me for a loop.

MIKE VAUGHN: She was angry. I thought something really bad might’ve happened, and she got an A-minus, and I was thinking, “That’s not bad. That’s pretty good, you know?”

PAUL SOLMAN: The Vaughns are success stories. Mike has worked his way back up to the salary he earned at Lear. Both have found new work they like locally. But they turn out to be stunning exceptions. Fully two-thirds of those who went to Blackhawk Technical College never finished.

AMY GOLDSTEIN: This was a heartbreaking thing that I heard over and over from some of the people who work at the college, that people started a course, but they need to grab any job they could because they just didn’t have the money.

PAUL SOLMAN: But even more heartbreaking: the minority who did get a degree fared worse than those who did not.

AMY GOLDSTEIN: The people who retrained ended up less likely to have steady work. They had bigger drops in their wages than the people who hadn’t gone back to school. So, the question is, why?

You know it’s possible that those few jobs that were around in the community were absorbed by the people who didn’t retrain.

PAUL SOLMAN: So that if you were retraining, you were stepping out of line.

AMY GOLDSTEIN: Exactly.

Another possibility is that if you were successful at retraining and you managed to shift into a new line of work, it’s very likely that you were starting at the bottom of the ladder.

PAUL SOLMAN: But whatever the reasons, job retraining, one of the precious few economic policies pretty much everyone lauds, simply fizzled.

MIKE VAUGHN: I’ve seen a lot of people that are potentially still struggling or not where they may have wanted to have been as a result of the re-schooling, the training, if there’s no jobs available after retraining, now what do you do?

PAUL SOLMAN: In the years since the plant left, there’s been a big push to attract new businesses to Janesville. Even Janesville native Paul Ryan has courted potential employers to the area.

So, will the town come back?

AMY GOLDSTEIN: There are some jobs that have come back. They aren’t the kind of jobs that used to be here. I mean, the unemployment rate here in early 2009 rocketed up to more than 13 percent. It’s now down to just under 5 percent. So, if you look just at that number, you can say this community has really come back.

PAUL SOLMAN: Rebounded just as America has.

AMY GOLDSTEIN: Just as America has. But if you look at other things, it’s a more complicated picture. Manufacturing jobs have not come back and in terms of real wages, factoring inflation into account, this area is running behind where it was in 2008. So, people are working again, but they’re not working making the kind of money they were before.

PAUL SOLMAN: Which may explain why Deri Eastman still has almost 200 students using the Parker Closet.

For the PBS NewsHour, this is economics correspondent Paul Solman reporting from Janesville, Wisconsin.

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