A Real Manufacturing Story From Janesville, Wisconsin

Hearing the statistic that the U.S. has fewer manufacturing jobs is very different from reading about Janesville, Wisconsin.

Through the Economics Show podcast, we meet the Vaughns and Wopats. When the Janesville General Motors plant closed, Mike Vaughn lost his job at a company that depended on the GM plant. Going back to school, and then returning to the labor force, he got a management position. But attending school did not help everyone. Many wound up with lower paying jobs than those that continued working.

Meanwhile, the Wopats had a very different story. Part of a multigenerational GM family, Matt Wopat became a “GM gypsy.” Still today, staying at an apartment during the week and returning for the weekend, he commutes to a GM plant in Fort Wayne, Indiana.

The Janesville GM Plant

Just before Christmas, during 2008, the last Chevy Tahoe rolled off the assembly line at the Janesville General Motors plant. Occupying 4.8 million square feet, and historically employing as many as 7,000 people, the factory physically and economically dominated the small city. In 2008, with its 3,000 high paying jobs, the plant had guaranteed its employees a middle class life. Then though, as Great Recession car sales plunged, GM had to abandon Janesville. The result affected not only its workers, but many businesses and Janesville itself.

However, through deindustrialization and diversification, the city came back.

Below, more than an upward sloping line, the graph displays Janesville’s recovery from 13% unemployment. Now, mirroring the country, 3.7%. are jobless. The region’s diversification included a Dollar General distribution center, countless businesses hiring new employees, and Main Street getting a new wine bar and olive oil shop:

Our Bottom Line: Externalities

When the GM plant closed in 2008, individuals, families, and the city felt the impact of losing so many manufacturing jobs. Defined as the ripple of an event, the externalities of the closure were widespread. As families slid out of the middle class, their spending affected local businesses. The city still is trying to repurpose the 4 million square feet occupied by the plant.

On an individual basis, the $28 an hour that GM paid and the benefits that even included time off to hunt, had evaporated. Families earned less:

Either commuting to a GM plant in a distant state or accepting lower paid jobs locally, workers lost the middle class life that the Janesville plant had provided since 1923. You can see the jobs that replaced their old lives:

Returning to where we began, we can remember that a statistic is very different from meeting the people that compose it.

My sources and more: Thanks again to Soumaya Keynes and her Janesville podcast for inspiring today’s manufacturing post. Then, in addition, I read her Brookings article for more detail. And finally, to complete the story, I also recommend this past econlife post.

Our featured image is from REUTERS / Allen Fredrickson.