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Original article URL: http://bridgemi.com/2013/06/moving-from-we-had-money-to-they-want-money-i-dont-have/

Economy & competitive position/Quality of life

Moving from ‘we had money’ to ‘they want money I don’t have’

GREENVILLE – The line began forming an hour before the food truck arrived, starting in the parking lot next to the barren acreage where once stood the nation’s largest refrigerator factory and winding around the front of the former UAW hall. Men and women, some with children, held empty boxes and laundry baskets they soon would fill with free produce, bottles of orange juice and loaves of bread, a scene reminiscent of Depression-era bread lines.

While there are hopeful signs that the economy is recovering — including rising corporate profitsa booming stock market and a declining unemployment rate — many who once considered themselves solidly middle class are struggling to hang in there, or even have slipped beneath the poverty line.

Several waiting in the Greenville line said they lost their homes after Electrolux closed its Frigidaire plant in 2006. Many lost hope of ever recovering the economic status they once enjoyed. One said she had attempted suicide.

Officially, Michigan’s unemployment rate stood at 8.4 percent in April, way down from 14.2 percent in August 2009.

But — “I’m starting to not put much credence in the unemployment rate,” said George Erickcek, an economist and senior regional analyst with the W.E. Upjohn Institute for Employment Research in Kalamazoo.

Michigan’s work-force participation rate (the percentage of working age adults who are employed or actively seeking jobs) dropped from 65 percent in 2005 to 61 percent in 2011, according to the U.S. Census Bureau. That means that thousands of the state’s unemployed simply gave up looking, Erickcek said.

“One of the questions I’m struggling with is, what are these people doing who are not part of the work force?” he said.

Many of those in the food line have exhausted their unemployment benefits. One woman said her husband’s unemployment compensation was reduced 11 percent as part of the federal sequestration cuts imposed when Congress and President Obama failed to agree on a deficit reduction plan.

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“Let’s face it: the economy is messed up,” said Bob LaBonville, waiting in line with his girlfriend Rose Zerbst, who worked 27 years at the plant until it closed. “Our government is messed up. The rich get richer, and the poor get poorer. This is America? Come on.”

His assessment is not far from what economists see when they look further into the numbers.

“There was a time when the middle class in Michigan was the envy of the rest of the nation,” said Charles Ballard, a Michigan State University professor of economics. “That’s no longer so.”

Thirty or forty years ago, a high school diploma and a job building autos, office furniture or refrigerators were enough to assure workers permanent membership in the middle class.

“We had this phenomenon where there were hundreds of thousands of people working in factories, and they had a house with a two-car garage and a boat and a cottage at the lake,” Ballard said. “Manufacturing was what drove it, and autos more than anything else, but the share of our economy that’s attributable to manufacturing went way down.”

As recently as January 2000, Michigan boasted 906,500 manufacturing jobs, according to the U.S. Bureau of Labor Statistics. By April, it had dropped to 553,700. Construction saw a similar decline from nearly 212,000 jobs in August of 2000 to 125,000 in April of this year.

“It was a horrendous fall,” Ballard said, yet it is an over-simplification to say Michigan’s entire middle class is struggling. In Oakland County, average annual per capita income ($36,314) is twice as high as in Luce County ($18,294), according to the U.S. Census Bureau.

MORE COVERAGE: So you think you are a member of the middle class?

Montcalm County, former home of the Greenville refrigerator plant, often vies for the state’s poorest county, with a per capita income of $19,010, and a poverty rate of 19.6 percent. Prior to 2000, Michigan’s poverty rate was consistently below the national average. In 1998, 10.2 percent of the state’s residents were living in poverty. By 2011, the state’s rate had climbed to 15.7 percent compared to the national average of 14.3 percent.

Much of the decline in personal income in recent decades is due to what Ballard called the “education gap.” On average, a worker with a bachelor’s degree earned about $26,000 more each year than a worker with a high school diploma, the Census Bureau reported in 2009.

As a result of Michigan’s historic reliance on manufacturing, “we developed a culture that didn’t put a whole lot of emphasis on post-high school education,” Ballard said, and the outcome is lower wages and expectations for those once considered middle class. The percentage of Michigan residents over age 25 with a bachelor’s degree or higher (25.3 percent) is lower than the national average of 28.2 percent.

Ballard pointed to the assembly plant General Motors opened in 2006 in Delta Township near Lansing, where “there are a lot fewer people around and a lot more robots and computers. The technological change has been a challenge for people who do simple, repetitive tasks.”

Outsourcing of manufacturing to Mexico, China and other countries, where wages are much lower, also has contributed to the decline of Michigan’s middle class. That’s what happened when Electrolux closed its Greenville plant in 2006, moving manufacturing to Ciudad Juarez, Mexico, and idling nearly 3,000 workers.

Stan and Jennifer Soules share dinner with their three children in their home near Greenville. Since both Stan and Jennifer were laid off from factory jobs, the family meals revolve around pasta and beans, Jennifer said. Still, the family considers itself middle class. (Bridge photo/Lance Wynn)

Stan and Jennifer Soules share dinner with their three children in their home near Greenville. Since both Stan and Jennifer were laid off from factory jobs, the family meals revolve around pasta and beans, Jennifer said. Still, the family considers itself middle class. (Bridge photo/Lance Wynn)

Most of the adults waiting in the food line once held what used to be called “good jobs” in that refrigerator plant, the kind that assured them a livable wage and a ticket to the middle class. Many still consider themselves members of that nebulous group, although by most standards, they are not.

Stan Soules Jr. says he is middle class, although his $10-an-hour factory job and $20,000 annual income places his family of five well below the federal government’s poverty line of $27,570. He was laid off three months last year. “It’s tough,” he said. “It would be nice to be making more money, so you don’t have to tell the kids, ‘no’ when they want a new shirt or new pants or new shoes.”

They get by partly because his wife, Jennifer, buys groceries with a state-issued Bridge Card, makes regular rounds of four area food pantries and stands in line when the Feeding America West Michigan Food Bank truck makes its monthly visit to Greenville. She was laid off from her job at another Greenville factory, Clarion Technologies, in 2008.

“I think we’re lower middle class,” she said, preparing dinner for the young couple and their three children. The tomatoes in the spaghetti sauce she got from the food truck. Likewise the lemons for the lemonade. The spaghetti came from a nearby food pantry.

“We do pasta and beans, so we don’t need a lot of meat,” she said. “I mean, we’re not struggling as bad as some people are. If you budget, you can do it, but it’s a struggle.”

Their home, a former Danish Brotherhood hall in the small town of Sidney, was in serious disrepair when they bought it from her father and began making it livable.

Edith and Phillip Flowers once had good jobs, nice vehicles -- "we didn't have to worry about nothing," Edith said. But after Phillip went on disability and Edith was laid off, the couple lost their home. They now are raising their four grandchildren on less than $1,500 per month. (Bridge photo/Lance Wynn)

Edith and Phillip Flowers once had good jobs, nice vehicles — “we didn’t have to worry about nothing,” Edith said. But after Phillip went on disability and Edith was laid off, the couple lost their home. They now are raising their four grandchildren on less than $1,500 per month. (Bridge photo/Lance Wynn)

Not many miles away, a storm blew through, taking with it many shingles from the home where Edith and Phillip Flowers are raising four of their grandchildren, ages 4 to 19. A tarp covered a part of the roof where an earlier storm had peeled off more shingles. There is no money for repairs, and the couple cannot afford homeowner insurance.

In 2000, certain their place in the middle class was secure, the couple built a new home in Greenville. Phillip worked for a foundry in Belding, and Edith assembled refrigerators at Electrolux.

“It was a good job,” she said. “A lot of people raised their families when they worked there. We had money. If we wanted to go somewhere, we could. We had nice vehicles. We didn’t have to worry about nothing.”

Then Phillip injured his back and went on disability, and, in 2006, after 28 years working for Electrolux, Edith lost her job when the plant closed.

The following year, they lost their home to foreclosure and moved into their current home, an old house in rural Montcalm County, where Phillip’s late mother had lived. Their only income for the family of six is $1,300 a month from his pension and Social Security disability.

The couple, both in their 50s, worry constantly about paying their bills and are afraid to answer the phone, since it often is a bill collector.

“We can’t do anything about it anyway,” Phillip said. “They want money I don’t have.”

Their oldest granddaughter, Kasey, graduated high school a year ago, but hasn’t yet found a job, although she conceded she’s done little beyond calling around. Children raised in poverty often develop a sense of limited possibilities, psychologists say, and simply give up.

“Hopefully, when these children get old enough, there’ll be something there for them,” Edith said. “I just don’t know.”

Her husband doubts it.

“Right now, it just don’t feel like it can get any better,” he said. “We’re in a hole, and we can’t climb out. I never thought we’d be here. We had a good income when I was working and she was working. We were making close to $50,000 a year. I thought we were doing pretty well, then we got shot down to this.”

Pat Shellenbarger is a freelance writer based in West Michigan. He previously was a reporter and editor at the Detroit News, the St. Petersburg Times and the Grand Rapids Press.

9 comments from Bridge readers.Add mine!

  1. ***

    The so called official unemployment rate has always been suspect, not counting people who have
    given up looking for work as no longer unemployed is dubious at best, if they are no longer unemployed
    then what exactly is their status? retired at a young age? doubtful.

    Manufacturing jobs, especially the ones once considered the cream of the crop like working at GM
    no longer pay the kind of wages for new hires like they did in the past, while they might not be starving
    the economic impact is much less than it used to be. The Wall St. Journal not too long ago did an
    article about how this has lessened the price and demand for cottages up north which used to be
    a reflection of the prosperity of manufacturing jobs in Michigan.

  2. jjdraw

    Since graduating with an engineering degree in 1995, my wages have no way kept up with rising prices.
    Funny how that supply/demand curve never applies when we are talking about regular people.
    “We have a skills shortage” BULL>
    But hey, if you are an executive, you have to pay to get the talent, right?

  3. sam melvin

    Just check the” budget “of the state for INCRESES of paper printing and pay to employees on the Foodstamp iusse alone.Every six (6) months it is rearanged…
    Every “bill” in the house/senate ….etc etc
    increse of rent for Senior and vetreans evry year(takes money away for the living item…Time for ALL goverment empoyees to get a 25% paycut in cluding washington//till the budget is balance NO MORE conventions etc or dinner paries without the Senior or vetreans or Homeless peron women and children..back to Blockparties PAYER for by ALL the congressmen and CHARITIES ….aron..

  4. sammelvin

    Pay out THE HOME HEATING CREDITS to the Low-income Senior and vetreans That where over $ 200 last year .This year measly $ 2-36………Thank to Gov.Snyder..Renrrefund taken from the Senior and vetreans Big fat O…..Home heating credits and foodstamps ARE FEDREAL PROGRAM that put money into the local ECONOMY….
    Raise the minium wages to $ 12.00 at age 18 …
    Colleges and university HAVE to garantee STUDENT get Employement or NO PAYMENTS ?no payments of Student loans TILL student is FULLY employed.
    WE need the “MARSHALL” PLAN for DETROIT NOW.Call the European and make detroit a DEMOCRATIC city(the first).

  5. RobBob

    This IS the depression…in Michigan! Time to wake up, make a plan and carry it out! Move to where the jobs are. During the great depression people moved to where the jobs were. In the 70’s people moved out of Michigan in droves, does anyone remember the slogan “Last one out of Michigan turn out the lights”? Time for people to take a gamble and MOVE! Michigan is a nice place to visit, you can come back and visit family. I have had friends move to Florida, Texas, Indiana, Illinois, Kansas and Massachusetts. Where do you think those 750,000 people from Detroit went? It is a big country out there, if I didn’t have a job here in Michigan I would move someplace warm and come back to visit in the summer. My advice “Go West Young Man”

  6. Mark Liss

    Sadly, this article conflates corporate profits with a healthy economy.

    But, people are not doing better because of laws designed to reduce the ability of labor to demand better wages and a shift of corporate taxes to labor and retirees. The return to profitability of corporations has been paid for by the lower and middle class. That’s a vampire economy, not a healthy one.

    Wages have been stagnant since 1981, the year Ronald Reagan was sworn in as the 40th president of the United States.

  7. TeacherPatti

    While we can’t say for sure that the labor movement created every middle class lifestyle, we can say for sure that it sure helped a lot of folks. Continuing to destroy labor rights and collective bargaining will not help us rebuild a middle class. I have some bad news for folks who continue to vote against their economic interests: a) you will never be one of those rich people so please stop trying to vote like them and b) employers don’t freely give you higher wages, benefits, maternity leave, vacation, etc…those things had to be fought for. A very lucky few can bargain for those things on their own…the rest of us need collective bargaining.

  8. Michel d Montaigne

    Michigan’s reliance on manufacturing did create a culture that did not value higher education and that culture has yielded two aspects: in the data, there is a lower percentage of the population that have undergraduate degrees but there is a general sense among Michigan residents that college (or higher education in general) is only equated with job prospects rather than cultivating a curious, knowledgeable, or humane individual. This attitude is reflected in the general populace all the way through the government leaders, education = jobs, and that remains one of the most frustrating aspects about discussions in higher education in Michigan and the U.S. at large.

    The article quotes the psychologist about children who grow up in poverty having a limited sense of opportunities; I feel like the industrial manufacturing boom in Michigan from the early 20th century through the 1970s (and lingering through the 80s, 90s, etc.) means that there are entire generations of Michigan residents who have a limited sense of the opportunities of higher education. The classes I took as an undergrad about classical history or modern lit didn’t lead to a job with benefits but they did enrich my understanding of the world. Snyder can talk as much as he wants about valuing creativity but creativity isn’t innate or even taught but cultivated and practiced and developed.

  9. Chuck Jordan

    Read _The Meritocracy Myth_. Meanwhile, Michigan Legislature cut education especially higher education for years culminating in cutting taxes on business last year. Costs of higher education continue to go up. Soon only the wealthy will be able to go to college and there will be no middle class.

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