Can Trump revive manufacturing? Waynesboro as a case study
What some of us try to call the River City was once the envy of Western Virginia for its manufacturing economy. As recently as 1990, almost half of the city’s workforce was employed in manufacturing. According to data from the Virginia Employment Commission, there were 5,400 manufacturing jobs in the Waynesboro labor force in 1990, and that number, impressive as it was, told only part of the story about the role that manufacturing played not only in the local economy, but in practically every other facet of life.
Physicists at DuPont and engineers at General Electric demanded the kind of school system that could educate their sons and daughters to be just as productive in their adult years if not more so, and so our schools were also the envy of Western Virginia, if not the entire state.
The money that they made, and that the thousands of other employees on the production lines made, fueled locally owned retail and food establishments. Our downtown was bustling.
And then … reality.
What happened in Waynesboro
Not going to sugarcoat it: globalization and automation happened, and they kicked our asses.
My dad worked at General Electric, and I remember him being out of work for two years in the mid-1980s, a time that probably not entirely coincidentally preceded my parents’ divorce.
He eventually got back on at the company that replaced GE, Genicom, and after their divorce my mom eventually went to work at Genicom as well.
We weren’t rich, by any means, but had weekly paychecks, and maybe most importantly health insurance.
It all went away in the mid-1990s when Genicom moved the bulk of its manufacturing operations to Mexico.
DuPont, for its part, was slowly moving its jobs to other locations, inside the U.S. and globally, and by the dawn of the 21st century had sold out its Waynesboro facility to Invista, the Koch Brothers conglomerate, which has steadily decreased the employment footprint of the operations since coming to town.
From a personal perspective, my dad, who passed in 2008, followed up 25 years at the plant with a series of odd jobs that of course never did quite replace what he’d had before.
Mom, who passed in 2014, worked in the grocery sector, also not nearly as beneficial as manufacturing, and without benefits.
The impact on Waynesboro on a macro scale has been, well, not devastating, but we’re still trying to get a handle on what our present and future is and will be.
From that benchmark of 5,400 manufacturing jobs in 1990, we’re at 1,255 manufacturing jobs today, the dawn of the administration of the 45th president of the United States, Donald J. Trump, who campaigned on a message of rebuilding the American manufacturing base.
I’d say good luck to him on that effort, if I didn’t also cynically say, don’t hold your breath thinking it’s actually going to happen.
I mean, looking at Waynesboro’s example, it’s not like we’re not trying. The city created an Office of Economic Development in 1998, bought up some land on the south side of town to create an industrial park around that same time, worked with the state to help one of the suitors that we lured to the industrial park expand around 2010 or so, then added more industrial park land in 2011 that we’re now trying to get the state and feds to help us fix up to put on the open market.
Just in salary and print costs, not even accounting for the money that we put into bare earth and tax incentives, we’ve spent millions here trying to get our manufacturing sector back, and none of it has stopped the hemorrhaging.
And the hope for reversing decades of trend of decline in U.S. manufacturing is … what, exactly? That we simply rip up NAFTA, fail to ratify TPP and threaten American-based multinationals with tariffs for products made overseas for sale in the home market?
Even if this strategy were to work, it’s not like the jobs would come back tomorrow, this year or anytime reasonably soon. To use Waynesboro’s example, what, so Invista and Genicom are just going to come back to town and get the production lines going again like they never left?
For starters, since the heyday of manufacturing here in Waynesboro, coinciding with the trend toward globalization, we’ve seen advances in production efficiency that make workers much more productive, which is another way of saying, we don’t need nearly as many people to produce stuff as we used to.
So, even if you get the Invistas and Genicoms of the world to come back, they’re not going to come back at 1990 levels, to use the Waynesboro benchmark.
For some insight into what would happen, let’s look at the only manufacturing success story we can tell in these parts from the past 25 years, the successful effort to lure PGI to expand its facility here back in 2010, as opposed to either expanding at another of its global locations or building a new facility somewhere else.
We got 41 jobs out of that one, and had to pay $4.55 million in incentives to the nice folks at PGI to get them here.
The jobs were paying an average of $18 an hour in 2010, and assuming wage growth corresponding to the rest of the economy should be paying in the range of $22 an hour today.
The VEC pegs the average wage for all jobs in Waynesboro at $17.58 an hour today.
Meaning we spent a lot of time and money to get 41 slightly-above-average-paying jobs.
This is the reality of manufacturing in the American economy in 2017. Hell, by my math, Waynesboro, in its decline, is still ahead of the curve when you look at the U.S. economy as a whole.
Manufacturing jobs account for 13 percent of our local workforce, while the U.S. economy as a whole is at 8 percent.
Just to have the macroeconomy catch up to where Waynesboro is now, we’d have to add about 7 million manufacturing jobs nationally.
Are there 7 million manufacturing jobs to be had simply by forcing American-based companies to repatriate? And before you answer, what impact does that forced repatriation have on those companies having to wade through what you’d have to expect in the form of retaliatory actions by, oh, let’s say, for instance, China, where a lot of cheap labor is done, and where a lot of the world’s consumers also happen to live?
The more you dive into this, and this is far from being more than a cursory look at the big, big, big picture, the more you come to realize that you’re not doing much more than sloganeering if you suggest that we can just snap our fingers and get all of those jobs back.
Let’s look again at what Waynesboro has been doing for the past quarter century as a guide. Not that we have it anywhere near right, because we spent roughly the first decade or more trying to pretend that what was happening wasn’t, in fact, happening.
Finally, in the mid-2000s, the city started to position itself as a sort of regional center for commerce, taking advantage of growth in nearby Albemarle County, whose western residents have easier access to Waynesboro than they do Charlottesville.
This has helped the city government, at least, recover as much as possible in terms of tax revenues lost to the decline of the manufacturing sector.
We’re still struggling with the impact on the wage side. Retail and food-service jobs pay about 60 percent of the prevailing wage of the manufacturing sector, so it’s not a surprise to see that 60 percent of the students in our local school system qualify for free or reduced lunches.
The growing number of kids in need is coupled with growth in the senior population here, which means more pressure, on two fronts, on local government in terms of services, at a time when government revenues are stagnant, even in light of the retail and food-sector growth.
Our issues are but a microcosm of those facing us as a nation, of course.
One thing missing here in Waynesboro, from my observation, is the sense that the task is too big for us to try to attack that seems to permeate the national discussion.
Our downtown, once bustling in the heyday of big manufacturing, was practically dead and buried in the 1990s and 2000s. I can again add personal flavor to help illustrate, having lived in Downtown Waynesboro since 2007, and having once observed that downtown closed for business at 5 p.m. Friday, and reopened on Monday at 8 a.m., the only thing driving traffic downtown being city hall being located down the street from our house, and the post office a block away.
This now being our 10th year downtown, I can walk for lunch or dinner to three high-end downtown restaurants, meet with business clients for coffee at one of two thriving coffee shops, and go out for a live show two or sometimes three nights a week at a 385-seat downtown live theatre that opened in 2016 after a $7.5 million renovation.
After thinking many times over the past decade that it would make sense for us to relocate our tech business in a more vibrant environment (i.e. a college town), we came to the realization a couple of years ago that the vibrant environment that we’d been seeking had grown up around us.
The result has been an influx of new residents to town associated with the University of Virginia, located 20 miles away in Charlottesville, drawn here by the low cost of living, with the cultural life and breathtaking beauty of living in a city literally two miles away from the intersection of the Blue Ridge Parkway and Appalachian Trail sealing the deal.
What we’ve done, and are doing, doesn’t fit easily on a bumper sticker, but it’s what communities like Waynesboro across the country need to be doing to move forward.
Which isn’t to say that we just give up on manufacturing, but, OK, we’ve already been hit hard by reality when it comes to manufacturing once.
No matter how hard we try, we can’t take life back to the 1950s.
And that doesn’t need to be, and isn’t, in fact, bad news, by the way. It just is what it is.
Article by Chris Graham