Janesville, Wisconsin

The recent book by Amy Goldstein looks at American poverty close up. Janesville is a town where GM shut down a plant. Home of Paul Ryan. The county, unlike Wisconsin, went for both Obama and later Hillary. It did not even back Paul Ryan when he ran for vice president with Mitt Romney. The book looks at several families close up for 5-10 years.

The book can easily be read by anyone (Democrat, Republican, independent), as it does not really focus on politicians, other than highlighting their failures. Republicans in Wisconsin have consistently turned away federal money to help those in need. The jobs created came slowly to Janesville. No politicians were able to influence GM.

The review of the book in Amazon that got the most comments brought up NAFTA and free trade.  The topic is a favorite of nationalists and Trump supporters and also some Democrats. The nationalists have apparently believed Trump in that they they think free trade agreements favor foreigners. They do not have much to do with manufacture jobs. If your goods are too expensive to sell in low wage countries, you must sell them at home or in Europe. Protectionism is a thing of the past, it is not going to come back.

[Added free trade note] Free trade agreements between countries allow free trade, that is clear. What they do is eliminate import taxes. Neither party pays a tax. You have to export something to Mexico, for example, to get a benefit from it. No giant SUVs from Janesville are ever going to Mexico. But we do in fact gain from free trade. We export a lot of food to Asian countries, particularly Japan, as they can no longer raise all their food. If a country wants to keep growing some crops locally, like rice in Japan, those products are then left out of the free trade agreement. The free trade agreements are essentially lists of goods not covered by the agreement. You can be protectionist about some goods and still benefit from trade.

Back to the book. The book focuses on families barely getting by. One dad laid off from the GM plant has endless short term jobs. He ends up in the end driving a fork lift in a warehouse near Madison, an hour away. No more 25-30 dollar per hour auto worker wage. Warehouses and distribution centers also move into Janesville. One drug company with very perishable products moves in, as Janesville is a short drive from O'Hare from where the drugs are shipped by air freight.

Teenagers are working two or three jobs to bring in family income. Curiously they then get fewer offers of college scholarship as the income is lumped towards family income. Three of the four working may get the 160 dollars worth food stamps a month, all four working low wage jobs is too much income. No food stamps. They are stuck paying a mortgage on their home as the home is not sellable. Those stuck in too small houses or renting when the recession came are luckier.

Over 4000 jobs were lost and the city remained a Democratic city and county. Part of this was due to the little help Republican politicians were able to offer. Neither did they bring jobs. Governor Scott Walker promised 250 000 jobs and never delivered. Yet the state legislature remains in Republican hands.

The book is in journalistic style. In the end is a set of tables that are more sociology than journalism. We find that training laid off auto workers in community college for two years did not get them more job offers. Finding a job directly after layoff was more successful. A few examples in the book got two women jobs at the prison.

All in all, this will be the future of many small cities. Bigger cities will escape a lot of this fate if they already are no longer dependent on manufacturing jobs. If your city is considering the "hosting" (tax breaks) of a company with 4000 possible jobs or three insurance companies with 500 jobs each, take the three companies. They are not likely to go bankrupt all at the same time.