Mon, 14 Oct 2019

Thriving Economy Comes at a Price to American Workers

Voice of America
12 Jul 2019, 22:05 GMT+10

YOUNGSTOWN, OHIO - The growing U.S. economy is creating new manufacturing jobs in northeastern Ohio, part of the country's once vibrant industrial heartland, but these new jobs pay about half of what union workers made in the past.

This region, sometimes called the Rust Belt, has struggled economically as automobile and steel plants shifted operations over decades to low-wage countries or increased automation to cut the high cost of labor. The region continues to deal with higher unemployment, more than 6% in the Youngstown area, compared with the national average of 3.7%.

The mixed regional economic outcomes of increased jobs but lower wages has divided working class support for President Donald Trump, who won this key battleground state in the 2016 election with a promise to revive American manufacturing and to stop corporations from sending jobs abroad.

Ohio Manufacturing Jobs Surge But Pay Less Than Shuttered Auto Plants video player. Embed Copy

Kicked to the curb

The General Motors automobile factory in Lordstown laid off more than 5,000 workers over the last two years before shutting down entirely in April.

"You know we gave them the reputation of a good quality car. We did nothing but earned what we had, and I feel like we just got kicked to the curb," said Sherry Pratt, who worked on the assembly line before being laid off.

These jobs paid about $30 an hour. The plant closing was part of a GM restructuring plan that also eliminated four other North American factories, while shifting some production to Mexico where workers make $2.30 an hour on average. GM's stock values rose nearly 5% after the plant closures were announced. The moves came one decade after GM received a $50 billion bailout from the U.S. federal government to save autoworker jobs after the company filed for bankruptcy during the deep recession of 2008-2009.

Some GM workers are expected to be offered jobs in remaining plants in other parts of the country. Pratt, who is 51 years old, says it's not possible to relocate her family, yet she doubts she can find a comparable job and salary close to home.

America first

Trump made bringing back American manufacturing jobs a major focus of his economic agenda. The president increased tariffs on low-wage competitors like China that the White House accused of unfair trade practices, and provided tax cuts and economic incentives to American corporations to keep jobs in the United States.

In 2017, Trump held a rally in Youngstown, where he promised that factory jobs "are all coming back," and later criticized GM for closing U.S. plants. Trump's nationalist economic positions helped win support among a large portion of GM union workers during the 2016 presidential election. Some still give the president credit for speaking up on their behalf.

"I credit Trump for putting our name in his mouth. I credit Trump for getting the message out there and actually talking about it. But I would like to see some more action," said John Debernardo, who worked for GM for 25 years before he was laid off in April.

Others say Trump has made empty promises to workers while giving tax breaks to corporations that continue to move operations overseas.

"He didn't do anything. I don't give him credit for anything. He didn't come out. He didn't do anything for us," said Mark Pratt, Sherry Pratt's husband, who was also laid off in April from the Lordstown plant.

The GM closure is expected to have a negative ripple effect on regional auto supply companies and other area businesses.

Expanding business

Still, more than 150,000 job vacancies are listed on the state-run Ohio Means Jobs website.

The Summer Garden Foods manufacturing facility in the Youngstown area, which makes specialty pasta and barbecue sauces, is increasing production and hiring more workers to meet growing demand brought on by the U.S. economic expansion.

Company CEO Tom Zidian credits Trump's tax cuts and financial deregulation for boosting private sector growth and investment. His company recently raised wages by 15% to attract qualified help as many businesses in the area are also expanding their operations.

"I think that the competition and the lack of enough people coming to apply for jobs has actually, it's risen the percentage that everyone has had to raise their minimum, that they hire people for," he said.

Reduced earnings

The Summer Garden Foods factory jobs pay about $15 an hour. The manufacturing team works an average of 60 hours a week. These jobs provide a significant increase in pay for many workers who had previously earned the Ohio minimum wage of $8.55.

But for GM workers who made double these wages, these non-union factory jobs would be a significant reduction in earnings.

"$15 an hour is not enough. It's not that we make too much money. It's never been that issue. It's that some people don't make enough money to survive," said Karen Eusanio, a mother of two children, who also lost her job at the GM Lordstown plant.

Skilled labor

Business is also expanding for the City Machine Technologies in Youngstown that repairs heavy equipment for construction companies and factories. Skilled labor positions are available here and at other industrial sites that require vocational training and time on the job to make a higher wage.

One of the main challenges in reducing regional unemployment is getting people who need work to pursue the training necessary to qualify for these skilled labor openings.

"It's a challenge because there's a gap there that needs to be filled," said Sharon Woodbury, director of community planning and economic development for the city of Youngstown.

Despite the GM losses and high regional unemployment, Geno Difabio, a forklift driver for City Machine Technologies, remains an unwavering supporter of President Trump. The lifelong Democrat switched parties to vote for Trump in 2016 and appeared with the president at the 2017 Youngstown rally.

"President Trump has done more screaming about America first, putting tariffs on and bring jobs back here," Difabio said, adding that GM workers "have supported and still do support the president because they know he's trying."

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