Not in His Backyard?: Congressman Paul Ryan and the Deindustrialization of Wisconsin’s 1st District

Posted on August 21, 2012

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*Originally posted on my Facebook page 8-14-2012

 

By now, many Americans are familiar with deindustrialization. Many of us are probably related to, or know, someone who has been laid off, or even worse, lost a job because a corporation decided to close a plant. And most likely, the particular corporation exported their jobs out of the state, region, and/or country.

It is possible.

The manufacturing sector in the United States has lost 5.3 million jobs between January 2000 and June 2012.[1] Partly, the U.S. experienced an uneven recovery after the 2001 recession. According to economic observer Richard McCormack, however, the manufacturing sector never really recovered—the country lost over 42,000 factories. Fewer than 12 million are currently employed in the country’s manufacturing sector, which is the fewest number since 1941.[2]

Congressman Paul Ryan, the newly minted vice presidential candidate of the Republican Party, should be familiar with plant closings and job flight as well. Workers at a General Motors plant in Janesville, Wisconsin—Ryan’s hometown—punched the clock for the last time two days before Christmas in 2008. Janesville lost 1,200 workers as a result of the closing of that particular plant. The city also lost 3,000 additional workers who held auto-related employment that year. Even though the city boasted a population of over 60,000, there was a sense that the closing touched the city’s residents as the president of Fagan Chrysler-Cadillac remarked, “GM was the town, not so long ago…If you didn’t work there, you were related to someone who did.”[3]

Another corporation closed a plant in Paul Ryan’s political backyard in 2010. The Chrysler Corporation shut down its engine plant in Kenosha, Wisconsin in the midst of the corporation’s crisis. Of course, Chrysler’s closing of the plant came on the heels of management demanding concessions from its workers in 2006. The workers eventually agreed to a six-year wage freeze. Ultimately, the plant closed—eliminating 575 jobs—and moved its operations to Mexico.[4]

Apparently both the sitting governor at the time, Democrat Jim Doyle, and Paul Ryan felt as if Chrysler duped them. Ryan reportedly said, “’I have been given assurances [by Chrysler’s management] that this would not occur.’”[5]

MSNBC’s Ed Schultz asserted that Ryan stood by and did nothing in response to those closings on his television show last night. Well, this is not necessarily true. Ryan released a statement about the plant closings in his district on his website. It almost reads like a condolence letter:

“These layoffs and closures have been a painful blow to our communities because manufacturing jobs are and always have been the bedrock of Southern Wisconsin’s economy. My thoughts, prayers, and efforts are focused on helping the affected workers and their families, many of whom I’ve grown up with and am still close friends with.

As our economy slowly tries to recover, it is vital that our leaders provide support for those who have been hit hardest by these closures. I have continued to work with state, local, and union officials in an effort to bring new companies and new jobs to replace those that we’ve lost.”

Then, he drops this doozy to punctuate his statement:

“For those who have been directly impacted by layoffs in Southern Wisconsin, the links below provide helpful online resources on available assistance programs. Please be advised that that while I am unable to use my position as a federal elected official to secure employment for my constituents, I have listed below resources that may assist you in your job search efforts.”[6]

What?

I almost fell out of my chair. My first thought was, “He offered links?!” Ryan did not promise to try to find any legislative solutions besides, considering his economic libertarianism, presumably supporting further economic deregulation and tax incentives to attract business. Ryan said that he could not use his position as a “federal elected official to secure employment”[7] for his constituents. Sure, Ryan could not hire anyone himself (duh), but could he have not said that he would go to Washington and fight for long-term and expanded unemployment insurance (He did vote for a short-term extension of unemployment benefits.), plant closing legislation, or legislation to prevent corporations from using taxpayer money to move out the country? Nope.

Of course not.

So, one might ask:  what are some potential legislative solutions?

In September 2010, Senator Dick Durbin introduced “S.3816:  Creating American Jobs and Ending Offshoring Act.” This bill would have extended tax incentives to employers who in-sourced jobs. Also, the bill would have eliminated tax loopholes enabling outsourcing. Of course, Republicans killed the bill by filibuster.[8]

Senator Bernie Sanders introduced an interesting proposal on July 23, 2012. Sanders submitted “S.3419—the United States Employee Ownership Bank Act.” This bill would institute an employee ownership bank that would support the creation of worker-owned enterprises. Under this type of arrangement, any corporation that decided to move would first have to offer its employees an opportunity to buy the plant.[9]

Now, Sanders’s plan is a radical one and I am sure many would be skeptical. But remember when the workers at Chicago’s Republic Windows and Doors occupied their plant in 2008? Well the workers staved off shutdown and on May 30, 2012, they incorporated themselves as a worker-run cooperative.[10] Even though Sanders’s bill has little chance of moving beyond committee, it seems as if he and his co-sponsors are on to something—maybe some workers could be open to exploring a greater degree of economic pluralism (a greater mixed economy where multiple forms of property ownership exists)? Yet, even if some American workers are not open to exploring this possibility, Durbin’s and Sanders’s bills point to a greater need for corporate accountability to their workers and their towns and cities, at the very least. Congressman Ryan has aired a commercial promising a plan to address corporate tax loopholes for overseas production, but he has not demonstrated a willingness to call for more corporate accountability while standing on the House floor.[11]  I mean, would he support taxing US companies who manufacture products overseas?

But Democrats should also be careful. It is true that many of them have sought to preserve whatever remaining shards of the safety net, but they need to think about constructing an industrial policy that extends beyond bailing out corporations. Obama has trumpeted the success of the auto bailout since his State of the Union address this year. He declared that the “American auto industry is back.”[12]  But this could be a tough position to take once someone asks why the federal government allowed Chrysler to take taxpayer money while allowing the corporation to move its Kenosha engine factory to Mexico.[13] In other words, with the bailout allowing Chrysler to survive, some taxpaying workers indirectly subsidized the flight of their factory to Mexico and the loss of their jobs. What is ironic considering Ryan’s affinity for Ayn Rand and free market economics is that he supported the auto bailout that incidentally enabled the Chrysler plant’s move to Mexico.

Oops. There is always enough tar and feathers to go around.

Now, mentioning the destination of the Kenosha plant is not meant to stir up any nationalist/racist resentment. This is precisely the reason why it is important to build transnational, if not global, worker solidarity and fight for globalized worker benefits. Some may argue that corporations move because of the “market” or because “corrupt unions” dictate irrationally high wages and benefits.  Yet, we should not forget what Chrysler chief Lee Iacocca said in the midst of Chrysler’s crisis in 1979:

“Ford, when I was there, General Motors, all over the world, we would pit Ohio versus Michigan. We’d pit Canada versus the U.S. We’d get outright grants and subsidies in Span, in Mexico, in Brazil—all kinds of grants. With my former employer (Ford), one of the last things I did was, on the threat of losing 2,000 jobs in Windsor, I got $73 million outright to convert an engine plant…I’ve had great experience in this. I have played Spain against France and England so long I’m tired of it, and I have played the states against each other over here…”[14]

That’s right. Sometimes deindustrialization, or the threat of, could represent a conscious strategy to maintain and/or increase profits (Bain Capital, anyone?), but one that serves to divide workers according to race/ethnicity, place/space, gender, class, etc.

So, as November approaches, it is important to think about the type of hardship that Ryan allows in his own backyard. We should also think of his “leadership” (links and austerity). However, if the economic crises of the 1970s and the 2001 recession could serve as possible cautionary tales, an uneven recovery displacing scores of workers could be on the horizon. The Bureau of Labor Statistics’ figures regarding the loss of manufacturing jobs in the last decade suggest a disturbing downward trend. We may have to push the Democrats to fight harder for measures enabling greater employee control of workplaces and greater corporate accountability to both its workers and their towns and cities.

Endnotes:

[1] United States Congress, “S.3419:  United States Employee Ownership Bank Act,” Govtrack.us (23 July 2012), accessed 13 August 2012, http://www.govtrack.us/congress/bills/112/s3419/text.  This is part of a longer historical trend of manufacturing job loss. Manufacturing employment in the US has declined by 34 percent between January 1973 and June 2012. See the U.S. Bureau of Labor Statistics for graphs and tables. http://data.bls.gov/pdq/SurveyOutputServlet.

[2] Richard McCormack, “The Plight of American Manufacturing,” The American Prospect (21 December 2009), accessed 14 August 2012,  http://prospect.org/article/plight-american-manufacturing & United States Congress, “S.3419.”

[3] Bybee, Roger, “The Truth About Paul Ryan,” The Progressive  (March 2011), accessed 13 August 2012, http://www.progressive.org/bybee0311.html . Bybee’s article is an excellent overview of Ryan’s rather contradictory politics. “Ripple effect felt in closing of GM’s Janesville plant,” JSOnline (11 December 2008), accessed 13 August 2012, http://www.jsonline.com/news/wisconsin/36026504.html; “Conservative Star’s Small Town Roots,” New York Times (13 August 2012), accessed 14 August 2012, http://www.nytimes.com/2012/08/13/us/politics/family-faith-and-politics-describe-life-of-paul-ryan.html?_r=1&pagewanted=all.

[4] “Chrysler won’t keep Kenosha engine plant,” JSOnline (1 May 2009), accessed 14 August 2012, http://www.jsonline.com/business/44162607.html.

[5] “Chrysler won’t keep Kenosha plant.”

[6] Rep. Paul Ryan, “Displaced Worker Assistance,” U.S. Congressman Paul Ryan Website, accessed 13 August 2012.

[7] Ibid.

[8] “U.S. Manufacturing Employment, 1970-2010:  Down 34%,” DailyKos (19 December 2010), accessed 13 August 2012, http://www.dailykos.com/story/2010/12/19/927976/-US-Manufacturing-Employment-1970-2010-down-34. This bill seemed to lack provisions addressing plant closures and capital movements within the U.S., though.

[9] In fact, the leftists I study like long-time activist Staughton Lynd, political economist Gar Alperovitz, the Detroit for a Rational Economy (DARE), and others have pushed for worker-owned enterprises as potential answer to plant closings since the mid-1970s.  Lynd and Alperovitz allied themselves with Youngstown’s steelworkers in their fight against shut downs during the mid-to-late-1970s and early-1980s. Alperovitz and economist Richard Wolff continue to advocate for such measures today.

[10] “Workers Who Occupied Their Factory and Beat Bank of America Now On Their Way to Owning the Factory,”Alternet.org (1 June 2012), accessed 14 August 2012, http://www.alternet.org/story/155683/workers_who_occupied_their_factory_and_beat_bank_of_america_now_on_their_way_to_owning_the_factory.

[11] For the Ryan commercial about outsourcing:  http://www.youtube.com/watch?v=DeVD7LsMoUU.

[12] “Obama:  ‘The American auto industry is back,’” The Detroit News, 25 January 2012.

[13] The auto bailout has also enabled Chrysler and GM to institute a temporary two-tier wage system. See “Detroit Sets Its Future on a Foundation of Two-Tier Wages,” New York Times (12 September 2011), accessed 14 August 2012, http://www.nytimes.com/2011/09/13/business/in-detroit-two-wage-levels-are-the-new-way-of-work.html?pagewanted=all.

[14] The federal government also bailed out Chrysler in 1979. Jeanie Wylie, Poletown:  Community Betrayed (Urbana:  University of Illinois Press, 1989), 36.

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