Quantcast
Get breaking news alerts via email

Click here to manage your alerts
David and Barbara Ludwig pose for a portrait at their home Wednesday, May 28, 2014, in Reading, Pa. The Ludwigs lost their manufacturing jobs and have been struggling financially ever since. For decades, American manufacturing provided entrée to the middle class, especially for workers without college degrees. No more. Globalization, automation and recession destroyed nearly 6 million manufacturing jobs between 2000-2009, casting many displaced workers out of the middle class and, consequently, widening the income gap between rich and poor. (AP Photo/Matt Rourke)
Income gap widens as American factories shut down
First Published Jun 15 2014 10:28 am • Last Updated Jun 15 2014 11:18 am

Reading, Pa. • In August 2008, factory workers David and Barbara Ludwig treated themselves to new cars — David a Dodge pickup, Barbara a sporty Mazda 3. With David making $22 an hour and Barbara $19, they could easily afford the payments.

A month later, Baldwin Hardware, a unit of Stanley Black & Decker Corp., announced layoffs at the Reading plant where they both worked. David was unemployed for 20 months before finding a janitor job that paid $10 an hour, less than half his previous wage. Barbara hung on, but she, too, lost her shipping-dock job of 26 years as Black & Decker shifted production to Mexico. Now she cleans houses for $10 an hour while looking for something permanent.

Join the Discussion
Post a Comment

They still have the cars. The other trappings of their middle-class lifestyle? In the rear-view mirror.

The downfall of manufacturing in the U.S. has done more than displace workers and leave communities searching for ways to rebuild devastated economies. In Reading and other American factory towns, manufacturing’s decline is a key factor in the widening income gap between the rich and everyone else, as people like the Ludwigs have been forced into far lower-paying work.

It’s not that there’s a lack of jobs, but gains often come at either the highest end of the wage spectrum — or the lowest.

"A loss of manufacturing has contributed to the decline of the middle class," said Howard Wial, an economist with the Brookings Institution and the University of Illinois at Chicago. "People who are displaced from high-paying manufacturing jobs spend a long time unemployed, and when they take other jobs, those jobs generally pay substantially less."

Globalization, automation and recession destroyed nearly 6 million manufacturing jobs between 2000 and 2009. In Pennsylvania, between 2001 and 2011, 258,000 middle-income factory jobs were lost. At the same time, Pennsylvania added jobs at the lower end of the wage spectrum — in health care and social services — and at the highest end, in sectors like management and finance.

Berks County, of which Reading (pronounced REH’-ding) is the county seat, is a mirror of that larger problem.

Decades ago, Reading was a mighty manufacturing town where the Reading Railroad — once the world’s largest company, now a spot on the Monopoly board — built a 19th-century transportation empire, and factories produced everything from hats to hardware. At one time, the city boasted so many manufacturing jobs that you could quit one, cross the street and easily land another, longtime residents say.

"You made a very, very good middle-class living. You could get a new car every couple years, send kids to college," recalled Ed McCann, Berks County’s longtime director of workforce development.


story continues below
story continues below

Then the factories shut down. The wealthy fled to the suburbs, their grand Gilded Age mansions carved up into apartments, and poor immigrants moved in. Now Reading, population 88,000, is one of the nation’s neediest cities, with more than 40 percent of its residents living in poverty, up from 19 percent in 1990.

As poverty grew, so too did the gap between the rich and everyone else. The difference between the income earned by the wealthiest 5 percent in Berks County and by a median-income household rose 13.2 percent in 20 years, according to the U.S. Census Bureau. Nationally, the wealth gap became even more pronounced, increasing 15.8 percent.

Six years after David Ludwig lost his factory job, the couple have exhausted their retirement savings. They don’t go out to eat or spend on their grandchildren.

Barbara, 56, said she has applied for more than 200 jobs since January and gotten one offer, as a shipping clerk, for $7.50 an hour. She has lost 40 pounds, blaming it on the stress.

"I don’t mind wearing the big baggy clothes, but just to put money aside to buy one or two bras because I lost too much weight, I couldn’t even do that. It sounds silly, but it’s true," she said.

The toll can also be seen at the Greater Berks Food Bank. It distributed 7.2 million pounds last year, up from 2.5 million pounds in 2001, and the food bank plans to move into a larger building to accommodate the surging demand.

The latest wave of plant closures, beginning around the turn of the millennium, hit companies like Dana Corp., Agere Systems, Luden’s, Glidden and Baldwin Hardware. Some 9,300 jobs evaporated between 2001 and 2011 — nearly a quarter of Berks County’s manufacturing base, according to Penn State economists Theodore Alter and Theodore Fuller. They were replaced by jobs in lower-wage sectors like education and especially health care, a phenomenon that has played out around the state and nation.

"The manufacturing sector was decimated, and the people who had those skills had no place to go," said Karen Rightmire, a longtime United Way official who now runs the Wyomissing Foundation, a private philanthropy outside Reading. "The days of the factory job that just required a strong back are gone."

Nationally, manufacturing declines accounted for 40 percent of the increase in joblessness from 2000-2011, according to labor economist Erik Hurst. And the middle class was hit hardest.

For high-income college graduates, "It doesn’t look like there was a recession," said Hurst, of the University of Chicago. "For lower-skilled (manufacturing) workers, the recession comes along, you get a big decline in employment, and it hasn’t rebounded at all."

The jobs picture isn’t entirely dark. Manufacturing is still the No. 1 employer in Berks County, led by battery maker East Penn Manufacturing Co. and a specialty steel company. Economic development officials say they’ve seen a recent uptick in factory hiring, and graduates of local technical career programs are virtually guaranteed a job. Berks County has placed a huge bet on worker training, launching a "Career in 2 Years" marketing campaign that encourages people to become certified in high-skilled manufacturing fields like precision machining and robotics.

Next Page >


Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.