I recently read a book called “Janesville – An American Story” by Washington Post reporter Amy Goldstein. It was gripping and thoroughly readable – but it doesn’t have a happy ending.
Janesville – as I found out – is a medium sized city in Southern Wisconsin near the Illinois border. It is famous as the home town of conservative American politician Paul Ryan, and as the founding site of the Parker Pen Company. But Janesville’s biggest employer for close to 90 years was the massive GM assembly plant. Four generations of Janesville people worked in the plant or at one of the supporting factories that supplied it. It was never easy work but it paid well enough to support a middle class lifestyle for the 7000 or so workers at the plant. They figured it would be there another century or so.
The Great Recession , high oil prices and the GM insolvency dictated otherwise. The plant closed in December 2008 (mothballed at the time, permanently closed 7 years later.) At the end it was building gas guzzling Suburbans and Tahoes and GM didn’t offer the plant a new more fuel efficient product.
The American story follows the fortunes of a few families and influential people in the town. It is at times inspirational with tales of self-sacrifice and hard work; at other times it’s totally depressing with accounts of desperation, poverty and death. It’s well worth the read.
What struck me the most was that studies by Goldstein and labor economists seem to disprove the generally accepted wisdom that the best course of action when a labor force is displaced is to invest heavily in retraining those folks for new and supposedly better jobs. This axiomatic conclusion seems to be about the only thing both progressive and conservative politicians can agree on these days.
To be sure, a lot of time and money went into technical training for the displaced members of UAW 95. Of the more than 7000 men and women affected, close to 2000 started in to retraining courses at the local community college. They studied everything from Criminal Justice to Heating and Air Conditioning to Electrical Transmission.
One particular couple stands out. The husband leveraged his job as a Union Personnel Rep to train in Human Resources and got a job in HR management. The wife went through the Criminal Justice program, got a job as a Correctional Officer, started part-time studies in social work through a nearby University and ended up working with developmentally delayed individuals. Both liked their jobs better than working in the factory and they got to stay in their home town. Win-win, right?
Well, maybe. The two “new and improved” jobs paid them about the same as one factory job had before. In fact the research carried out by Amy Goldstein’s associates concluded that if you had gone into a retraining program you ended up making 33% less than before and – this is scary – 25% less than displaced workers who didn’t go to school at all.
The reasons for this inconvenient truth about retraining are not clear but some theories put forth include:
- The workers who didn’t retrain kept working and simply had more hours where they got paid.
- The displaced workers who didn’t go back to school sucked up the remaining lower skill jobs that were around while the retrainees were – well, retraining.
- The folks coming out in a new field had to go into entry level positions and it would take years for them to catch up financially to where they were before.
Now it wasn’t all sunshine, rainbows and unicorns for the factory workers who did not return to school. Most of them ended up in jobs with inferior pay and benefits. The best off financially were the “GM gypsies” who left Janesville during the week to live and work in distant cities. The closest GM plant is 4 hours away, and closer Chrysler factories were not hiring. These weekly commuters managed to keep going but they certainly paid the price in family relationships.
I’m still a big fan of retraining – in fact I believe in lifelong learning. Nothing stays the same forever. But it is best to retrain while you still have a job.
In my career I worked in 6 different factories. One is a collection of small businesses today. Another is a warehouse. Another is still open but only half in use. Another went from a flavour company headquarters to a fish processing plant. Another was demolished recently. The one remaining one is facing an uncertain future.
An awful lot of factory workers lost their jobs in those establishments and honestly I don’t know how they all coped with it. I would like to think that if they retrained they found something satisfying and financially OK. But if Amy Goldstein and her associates are correct the odds are against them.
Oh, and in case you were wondering the Parker Pen Company doesn’t have a factory in Janesville either. They closed the final small operation shortly after GM left the town.