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Ghost Towns: from sea to shining sea

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Mayor of Braddock PA in a gutted old steel mill

Is the United States ready to compete for the world’s best jobs?  In a study comparing the US to the world’s top 40 industrialized nations, the US ranked 40th or dead last in “rate of change in innovation capacity” over the last decade.  In other words, we’re far behind the power curve when it comes to investing in our country’s future.  While we were playing withreal estate bubbles and propping up our lifestyles with trillions borrowed from China, our competitors we’re quietly innovating their human capital infrastructure.  

In the news this week, Intel, the chip maker recently decided to build its newest manufacturing plant in China.  Intel’s CEO said that the Chinese government sweetened the deal with big tax savings, a deal the U.S. government couldn’t afford to compete with because we’re too burdened with bailing out our investment banks (with money literally borrowed from China).  Intel ’saved’ $1 billion to set up their new $4.5 billion shop there.   How’s that for a slap in our great country’s face?  Our dour economy must not be dour enough, the rest of the industrialized world is eating our lunch and we don’t seem to care. 

As the global economy slowly begins to ramp back up over the next several years, how much do you want to bet that most of the new growth won’t happen in the U.S.?  Intel’s CEO said he found top notch science and math talent in China, he doesn’t have to hire a single American, and that’s one of the reasons they didn’t build the plant in the US—our workers aren’t skilled for these high-end manufacturing jobs.  Welcome to the future we’ve been “planning” for since the 1970s. 

Intel is the tip of the iceberg.  The Governor of Michigan is working hard to attract high-tech ‘green’ jobs to her state to help reemploy laid off autoworkers, but guess what, these jobs require highly skilled training (skills these ex-autoworkers don’t have).  Detroit wants to transform itself into a green technology corridor and move itself away from manufacturing.  Their pumping tons of money into giving people access to a college education.   This sounds like a good idea, and it truly is for some people, but not everyone is intrinsically cut out for careers engineering and science, no matter how much training you give them. 

About 30 miles south of Pittsburgh there was a small steel town, Monessen Pa, that was once referred to as “little Chicago.”  It boomed along with the building of our country, employing tens of thousands of blue collar steel workers who were proud to create a robust middle class and a thriving town.  Today, it’s population is about 5,600 (a rough estimate), about a sixth of what it was in it’s heyday.  It’s downtown stores are all boarded up, most of the schools are abandoned or torn down, all that’s left is a bank, post office, drug store and a grocery mart.  The river front where the mill stood is a barren dirt lot, the mill was razed after all hope was lost that it could ever be revived.  Parts of this town are so far gone that six foot weeds and trees are growing in the middle of the streets.  Houses are literally collapsing in slow motion from years of neglect and decay.  

There are many, many hollowed out towns like this in Pennsylvania, West Virginia, Kentucky, Ohio, Indiana, Michigan, to name a few states in the “ghost belt” (the rust is gone, nearly everything has been torn down).  There are not many manufacturing plants or mills left, there’s nothing standing to “rev up” to create more new jobs.  There’s very few young people left to fill those would be, fantasy jobs.   Guys and girls like me who grew up there went to college and headed for one of the coasts, thirty years ago we saw what was coming.  The same thing is happening in Michigan today, the auto industry is a fraction of the what it used to be, many more people are leaving the state than moving in. 

Over the last 40 years our manufacturing base left, little by little, to chase cheap labor overseas.  We no longer make most of our textiles, clothes, shoes, cars, TVs, electronics, steel, appliances, furniture, machines, etc, etc, etc.  Intel’s bid for China’s future was inevitable, we’ve spent four decades turning the middle of our country into ghost towns, while the Chinese were financing and investing in their version of a “new deal”.   American CEOs have played a key role in international development—pumping trillions of their infrastructure and human capital investment to breathe life into a new middle class in the far east and elsewhere.

Americans are adaptable.  With little to no highly skilled, good paying manufacturing jobs left, we herded our kids toward college, then we turned up the volume knob and created our love-hate relationship with the “best college” rat race admissions mania.  Of course, to get into these best colleges you have to get your kid into the best high schools, so we collectively bid up housing prices to live in the right zip code to get into those schools.  Now, the most desirable places to live is on one of the coasts, but you can’t really afford to live there unless you make gobs of money—that means your kids have to go to college if they want to keep up with this rat race.  Parent’s lives have been completely hijacked, everything is about branding their kids to succeed in this clusterfuck.  Not so obvious is how many mid-career, high-paid, college-educated professionals feel trapped in jobs they hate (doctors, lawyers, engineers) so they can finance their kid’s chance to have a good life, but that’s another story.   

Pressure on kids to get ahead is fierce.  The states of Maryland and Virginia are the top two in the country with 50% of high school students taking AP courses, twice the national average, with 70% of students in these states on track to go to college, more than double the U.S. average.  Most of this is concentrated in the DC metropolitan area, one of the east coast hot spots. 

Demographically and geographically we have a great divide.  Those who succeed live on the coasts; they have a college degree and can afford to pay a half million for a starter house.  Those who will fail live in the great middle; they work odd jobs and at Walmarts, scratching out a living as they hover just far enough above the poverty line to afford the stuff that Walmart made in China.  The great irony here is that the great middle ‘real’ America, being mostly red states, voted for the politicians who pushed for the pro-business, free-trade and deregulatory policies (read: “the market will take care of everything, government is bad”) that gutted their towns and livelihoods.

With most of the best hands-on manufacturing jobs gone, there is extreme pressure to go to college.   If you don’t go to college, you can go to a voc-tech school to become an electronics technician, but then you’d have to move to China to get a hands-on job with Intel.  There are few good and well-paying vocational, technician and highly skilled manufacturing jobs left here.  Young people on the thriving coasts aspire to be investment banker millionaires, young people in the middletown USA are happy to land a job as a retail clerk, there’s not much in between, especially for young men.  Middle class women are going into good careers in nursing, allied health, and school teaching, as do some young men, but there’s a vast majority of guys who won’t do pink collar work.

So, how do we fill this gapping hole?  Experts who study this problem know that it’s going to take at least a decade, easily two, to literally rebuild our middle-class, manufacturing job sector from scratch.  They also say we have to promote math and science to young people, “we’ve got to make math cool”.  Sure, that’ll help the people who are innately talented for math, but what about all the people who are just average at working with numbers and much better at building and making physical things?  About 50% of men are hard-wired spatial-senors, they are born gifted for pratical hands-on work.  Well, I meet these guys through my career coaching practice.  They went to college to become lawyers, bankers and accountants, and they are not happy.  They would rather be building gadgets with machines and tools, not sitting behind a desk shuffling paper.  For these guys, going to college bumped them up the ladder to become a white collar professional and they’re biting the bullet doing work they hate—and they’re the lucky ones, they can go back to college to become engineers or doctors to engage their spatial, hands-on talents. 

The truth is, most guys and girls with these kinds of talents don’t want to go to college, they don’t get the grades in high school and deep down know that higher education is not their element.  If they do get into college, they’re the ones that tend to drop out.   They don’t excel at book smarts, their genius is building, fixing and working with 3-D objects: tradesman, craftsman, technicians, mechanics, electricians, equipment operators, construction workers, etc.  Right now, there isn’t a promising future for these people.  Along the way, we made it cool to go to college and wear a suit to work, but we didn’t make it cool to build stuff with your hands and wear a tool-belt to work.  So out of fashion, we literally gave away our whole blue-collar, middle-class sector, one that took a century to build.  There’s nothing left.  Don’t believe me, take a drive up through southwestern PA, and keep on going into Ohio and west.  We did this to ourselves, the great country that we are.

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5 Comments

  1. Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor

  2. This article could also be titled: The US Innovation Bubble.

    In the same study noted above, the US is ranked 6th among the 40 industrialized nations for innovation and competitiveness, but this likely grossly overstated.

    Alan Tonelson, author of Race to the Bottom, reveals some fuzzy math in how innovativeness is calculated.

    http://www.nytimes.com/2010/03/06/opinion/06Tonelson.html

    The US Labor Department’s figures show that American workers in 2009 could produce the same product they did in 1980 in 40 percent less time (which largely means doing it with less people). Less input to get the same output = productivity gain, which means “innovation” must’ve played a role. Better technology, smarter people, we can do more with less.

    However, given all this gain, why have wages for middle-class, blue-collar workers lagged since 1980? If we’re so innovative, where is all the payoff over the last 30 years?

    Tonleson and Kevin L. Kearns show that one reason why it appears to require fewer workers less time to produce a product is that the Labor Department is not counting labor that has been offshored. What kind of work have we offshored over the last 3 decades? Manufacturing.

    For example, take an American company with an overseas plant in China that builds part of it’s product at home and part over there. It would appear to be innovating–doing more with less people in the US–but what’s really going on is that the offshored labor isn’t being counted into the equation. Actually, they say, it’s taking about the same number of human-hours to make the product, but the worker-hours in China aren’t being counted. This means we’re not as innovative as it might appear.

    In short, the pro-business argument - that our economic policies of free trade and deregulation are helping the US make extraordinary gains in productivity, innovation and competitiveness - no longer has teeth.

    How innovative are we, really? Well, the truth is out there in those ghost towns. It’s time to rethink our ecomomic policies and our attitudes about manufacturing as a livelihood for people who are naturally talented to build stuff with their hands. These are our fellow countrymen and they need a viable way to do what they do best.

    Anthony

  3. Anthony Spadafore

    More Ghost Towns in the news, March 11, 2010:

    The Kansas City, MO school board voted to close half of its 61 public schools. School enrollment shrunk by half over the last decade.

    One mother said, “. . . What happened to the time when our schools had a future? I live in Midtown and we already had too many vacant buildings. Now we’re going to have more? I guess we’ll just keep falling.”

    See article: http://www.nytimes.com/2010/03/11/us/11kansascity.html

  4. Anthony Spadafore

    USA Today also did a recent article about our nation’s manufacturing “Ghost Towns” teetering on the edge. Here’s an excerpt from the USA Today article by Rick Hampson:

    “Whether it’s textiles in the Carolinas, paper in New England or steel in the Midwest, most industrial cities and mill towns “are on pins and needles,” says Donald Schunk, an economist at Coastal Carolina University. “Day to day, week to week, any manufacturing facility seems vulnerable. People don’t know if they’ll be there.”

    That’s true in:

    • Georgetown, S.C. (pop. 9,000), where the closing of the local steel mill last year left International Paper as the last major private employer.

    • Madawaska, Maine (pop. 4,000), where workers voted last month to take an 8.5% wage cut to keep the financially strapped paper mill going.

    • Glenwood, Wash. (pop. 500), where flat lumber prices and rising land prices are crippling the forest products industry.”

    See full USA Today article:

    http://www.usatoday.com/news/nation/2010-03-01-townhangingon_N.htm

  5. Fantastic article, Anthony. I wish more people could understand these concepts, especially parents who feel that white collar career paths are the only acceptable futures for their children.