Janesville: An American Story Hardcover – April 18, 2017

“Even a small city wrenched by the worst of what a mighty recession metes out does not have a single fate.”Amy Goldstein tells the varied fates of the people of Janesville, Wisconsin beginning with the closing of Janesville’s manufacturing plants in 2008. She retells the lives of those who lost their jobs, explaining how they have fared in the following eight years. Janesville is a microcosm of hundreds of towns in the Rustbelt that starts at the Delaware River in eastern Pennsylvania and ends along the Des Moines River a thousand miles west in Iowa. It's the story of many towns in this distressed part of our country that roared in last year’s election.The book interested me because as an industrial consultant I’ve worked in Janesville and dozens of similar industrial towns from Wisconsin to Upstate New York. I’ve witnessed first-hand how my clients among America’s former great industrial companies booted thousands of their employees out the door and shipped their jobs off to China and Mexico, often after brutally extorting the fired American employees into training their foreign replacements by threatening to withhold their severance pay.Though I moved to Florida in 1998, I returned in 2011 to a town in Michigan’s beautiful NW Lower Peninsula that is now reinventing itself, with some success, as a recreational town of marinas, boutique shops, craft breweries, and fishing charters. It is right across Lake Michigan from Green Bay.I get over to Wisconsin in most years, and have observed the changes described in this book.The story begins with the closing of the Janesville’s GM plant in 2008, which had operated since 1923. GM’s closing caused a chain reaction of closures among the other auto component factories in town. It was followed by the unrelated closing of the town’s other major employer, the famous Parker Pen Company, which fired its American employees and moved their jobs to Mexico.What happened to all these people booted from employment?As usual in life, it’s a mixed bag. Some of the union members with seniority were offered positions at other GM factories hundreds of miles away. They left their families in Janesville and commuted home on weekends for years until they retired. (Perhaps they did not make permanent moves to the other towns because they held out hope that GM would eventually re-open the Janesville plant. Or perhaps, they were worried that the other GM factories would be closed too, stranding them yet again in another jobless town).A few moved into jobs in social work (getting paid with public money to rehabilitate their laid off neighbors) and criminal justice (prison guards for the unemployed who became criminals).Being the home of Speaker of the House Paul Ryan, Janesville had the political pull to make a mighty effort to recover its fortunes with grants of tens of millions of dollars of state, local, and federal money to potential new employers. The town succeeded, by paying $11,500,000, to attract the distribution center of one of the “dollar store” chains, Another grant of $36,000,000 of public money (state, local, federal) attracted a startup medical devices manufacturing company, that may eventually employ up to 150 people. However, offers of nearly $600,000,000 failed to convince GM to reopen its plant.The new jobs pay much less than GM paid, so many people have drastically reduced their standard of living. And the new jobs took years to be created (the medical company will not create most of its projected employment until 2019 at the earliest). Many people were permanently removed from the middle class and drifted into the despair of living from food stamps in public housing, and of resorting to substance abuse to fill their empty days.The most surprising aspect of the book is that going back to trade schools and community colleges for “retraining” was generally counterproductive.=====“Laid-off workers who went back to school were less likely to have a job after they retrained than those who had not gone to school.”Retraining did not translate into greater success at finding a job. Among those who went back to school, the proportion who ended up with steady work was smaller than among the laid-off workers who did not. Worse still, more of those who retrained were not earning any money at all.=====Perhaps this should not be surprising. When the major employer in a town closes, every other employer loses business and starts laying off its people too. What good does it do to retrain from being a factory hand to an office worker, when every office in town is also letting its office people go?The story ends in 2016, with Donald Trump elected President by the votes of folks battered by unemployment in the Industrial Midwest --- people who until then had leaned Democratic. (I was one of them --- having voted Obama in 2012 and Trump in 2016). Janesville’s county voted for Obama in 2012 and Ms. Clinton, by a much narrower margin, in 2016. But it elects Conservative Republican Speaker of the House Paul Ryan to Congress. Anyone who wants to find a place to study American politics should start in Janesville, which mirrors the national mix of Democrats, Republicans, and IndependentsMy takeaways from the book are:1. Plant closings create an economic cataclysm that is always worse than anticipated. They take down the component feeder factories that supply parts to the big plant. They destroy many small businesses that provided contracted services to the closed plant. The town’s restaurants, merchants, bowling alleys, and so on lose much of their business and start to close. Foreclosed homes owned by the unemployed who are unable to continue paying mortgages flood the market and devalue everybody’s property. It is difficult, if not actually impossible, to fully recover the economy of a town after a major employer lays off its people.2. We were sold a pack of lies about free trade benefiting our workers. NAFTA-WITH-MEXICO and GATT-WITH-CHINA were sold on the promise that they would “create millions of high paying jobs for American workers who will make products for export.” American companies never intended to use free trade agreements to export to other countries. Not a single vehicle was ever exported from Janesville to Mexico or China. The pool of $2 / hour labor in Mexico induced the Parker Pen Company to give its American employees the boot, and perhaps expedited the decision by GM to permanently close its Janesville operation. (I don’t know if GM’s management made this calculation, but I witnessed management’s calculation at other companies that moving work to Mexico and China would enable the closing of US factories during the next recession).3. The “New Economy of high-paying ‘information worker’ jobs” is bogus propaganda. Once high-paying jobs are lost, they never come back. The pool of low-cost jobs in Mexico and China impedes the creation of middle class jobs in the USA like we had prior to NAFTA being ratified in 1994.4. “Retraining for a better job” is a delusion foisted by executives and Wall Street money funds who profit by beating Americans out of their jobs. They want to make it socially acceptable to profiteer by sending their people’s jobs to Mexico or China by pretending that it’s the American workers’ fault for being too dumb to retrain for some line of work more in demand. In truth, there aren’t enough well-paying jobs anywhere in the USA to soak up the slack from industrial dis-employment (which, by the way, also dis-employs professional people in accounting, production management, and technology). It’s like a game of musical chairs where after every round there is always somebody left standing who doesn’t have a chair.5. I’m also wondering if Congress should pass laws making it illegal for governments to bribe companies with tens of millions, hundreds of millions, and even billions of dollars to set up shop in their jurisdictions. This merely creates “bidding wars” to see which government entity can offer the most incentive to bring in mediocre businesses. We’ve run up $10 trillion of national debt and no telling how much debt at the state and local levels paying bribes to businesses, which often never fulfill their promises to hire people. This is yet another sign that the so-called “new economy” failed to replace the jobs that were lost when we relocated the high-paying jobs to Mexico and China.Nevertheless, despite all odds, there has been some recovery in the Rustbelt. Wisconsin, even with its diminished manufacturing economy, retains some family-owned, closely-held companies that haven’t yet been taken over by Wall Street hacks who buy companies in order to shut them down and move the Americans’ work to Mexico and China. I recently bought a Wisconsin-made Gravely lawn mower and a Wisconsin-made Speed Queen dryer. Excellent products built with the old-fashioned American pride of quality engineering and workmanship. Many other of Wisconsin’s famous industrial companies like Harley Davidson, Kohler, and Manitowoc, have found ways to prosper by remaining in the state. Some are even hiring faster than they are laying people off. Some of my son’s friends from Florida moved to Wisconsin in order to go to work building construction machinery.There are also quality of life issues that make the Midwest a special place. I moved my family back to NW Michigan, across the lake from Wisconsin, in 2011. Many of us who moved to glamor spots like California, Florida, Colorado, and Seattle when we were young returned to the Midwest in middle age. In Florida, I have neighbors from Michigan. In Michigan, I have neighbors who returned from Florida. Others are back from Colorado, and dozens are back from California. We like living in communities here the people know each other and care for each other’s families.New businesses with new jobs, albeit primarily at minimum wage, are also coming to town for the first time in decades. A shadow of prosperity is glimmering for the first time in living memory.Places like Janesville and other towns in the middle of the country have a sense of community that will always make them home to the people who grew up there. If they have not recovered as quickly as we expected, neither have they died.

This is a very sad story. It's about the failure of America. No one individual or organization can be blamed. This story is about the total meltdown of a society. I grew up in Flint Michigan so I got to witness this first hand. This may be the best description you'll read about what it's like to live in a failing economy.I also worked in job training programs. This book give a very accurate picture of those programs. People who participate in job training often end up worse off than those who do not. Job training programs are just a way for politicians to say they're doing something. They do very little good.The sad thing is that nothing does much good. Going from middle class to food stamps is not a pretty thing. This book captures the very real horror that so many are now living through.

Perhaps it's that, as the saying goes, familiarity breeds contempt. As a fifth generation native of southern Wisconsin--descended from immigrant dairy farmers who prospered in Rock, Green, and Dane Counties, but also of a father with an 8th grade education who spent a working life in a foundry in suburban Milwaukee--perhaps I'm too close to Marv and Matt Wopat and their colleagues to see the heroism in showing up to work everyday and hoping for the best. But what I see here is just what I saw in J.D. Vance: the apotheosis of good people whose lives are shaped by profound insularity and a deep fear of change. Who believe with unassailable certainty that the arc of American economic expansion after the war--an anachronism just as surely as plantation farming in the South and textile milling in England during the 18th and 19th centuries--constitutes an eternal truth. Frankly, I find little in any of that to exalt.Compare, as fairly as you can, the stories of George Parker and Joseph Craig, and even the stories of my immigrant ancestors, and those of (I'm willing to hazard) many of the former line workers at Janesville Assembly. What's gone wrong in the 100 years since? When did the descendants of intrepid people become opiated by the notion that factory jobs paying comparatively high wages for unskilled work--not to mention the campers, basement rec rooms, hunting land, and Packers season tickets that those wages buy--are a birthright, to be handed down from generation to generation without any of the risks of ownership? Where does nobility reside in an unskilled worker, spending to the edge of solvency, who's now so afraid of the unknown--or, in any event, the uncomfortable--that he won't train for a new job that requires a move to, or even immediately consider a relocation that preserves his lifestyle but that requires starting over in (perish the thought), a new town 200 or 400 or 800 miles away?Plainly, I don't like the story. As for the book, it's competently told, at least. I do find the author's approach rather syrupy. Whether she set out with a disposition to lionize the lineworker or whether she simply warmed up to people who are obviously honest and hardworking, there's a consistent tone that's better suited to a high school essay about grandpa who served in the war than to a vigorous piece of journalism. The consistent use of first names is sometimes distracting; why is the congressman from Wisconsin's first district called "Paul," and the former senator from Wisconsin's 15th district "Tim"? Just because they were born in Janesville? (Rick Wagoner of GM is "Wagoner" and Jim Doyle, a native of nearby Madison, is "Wisconsin's governor.) The book does require consistent and unflinching focus, and for that the author deserves credit. If her work becomes required reading at Janesville Parker and Janesville Craig, and at a thousand other schools in the Midwest where immigrant ambition has lost its way, it may yet be a worthy read.