Searching for hope in the recession
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Kai Ryssdal: This is an economy where everything depends on everything else. That applies on a global scale as with the new banking regulations that came out of Basel this weekend.
It applies on a very local level, too. Tomorrow morningm we’re going to get manufacturing data for the month of July — how much American factories are making and selling. In those numbers we’re probably going to be able to see the continuing thriftiness of American consumers. We’re not buying as much, so factories aren’t making as much. In a company town where one plant is the big employer, that’s bad news for locals no matter where they work.
Marketplace’s Jeremy Hobson continues his travels through Tennessee now for our series on how the recession and recovery are being felt in the heartland.
Group of people: To look at the sunny side of everything and make your optimism come true.
Jeremy Hobson: It’s a warm evening in the east Tennessee hill town of Kingsport. And as they do each week, members of the Optimist Club have gathered at the Lynn Garden Restaurant to plan their good deeds. But it’s a struggle to remain optimistic around here these days.
Mary Underwood is the wife of a club member. She used to do community outreach for a medical office.
Mary Underwood: They called me in about a year and a half ago and told me they could no longer afford me in that position.
Since her layoff, she’s been able to pick up a lower paying job, but she says:
Underwood: I’m making about $1,200 a month less. I stopped putting into retirement. So I’m going to school part-time to get a degree, hopefully, in medical lab technology, so I can regain that income.
Her 22-year-old son hasn’t fared any better. He’s been unable to find steady work as a welder and is still living at home.
And all over town, the story is the same. From a small business owner named Jack Gannaway…
Jack Gannaway: It doesn’t look good right now. You know, a lot of my clients are cutting back. You don’t have any money left to put back into your business.
…to a hairdresser named Kimberley Moneyhun.
Moneyhun: People will go longer in between times if they can hold off haircuts for another week or two, make it last. So I’ve felt it a lot.
That’s because everything in Kingsport revolves around the chemical company Eastman. It employs one out of every seven people here. Bob Underwood is Mary’s husband, a local pastor and senior member of the Optimist Club.
Bob Underwood: It used to be a big time of the year when Eastman had their bonuses. And I mean, companies really pushed for those bonuses for them to come in and spend their money. And you don’t see that now.
Underwood says as the national economy has dipped further into recession, this manufacturing hub has fallen right along with it. Last year, Eastman laid off about 5 percent of its work force. Employees who stayed on the job took a temporary cut in pay.
Bob Underwood: The way Eastman goes, really so goes the community.
That’s because the materials that go into things we buy in New York, Los Angeles and everywhere in between are made right here in Kingsport.
Wayne Chastain is a chemical engineer for the company.
Chastain: You know we’re in paints, we’re in adhesives, we’re in plastics. And so when consumers stop buying, we definitely do feel it.
And neighboring communities are feeling it too. They’re the makers of everything from paper to ammunition.
Matt Murray: Blount County here, almost one in four jobs in manufacturing.
Matt Murray is a regional economist at the University of Tennessee in Knoxville. He met me outside a brand new office park that has no tenants yet.
Murray: Statewide, we’re closer to around 15 percent of our jobs in manufacturing. That’s substantially higher than the national average and so when consumers across the country quit buying manufactured products, we suffer. When they quit buying building materials, because we have a fairly strong lumber industry in Tennessee and so on, this economy suffers.
He says many of the laborers who came here for manufacturing jobs have fled to larger cities. Immigrant workers, he says, may have left the country altogether. As for those who’ve stuck around, waiting for a rebound:
Murray: I really don’t know what these people are going to do. They’ve borne the brunt of the weight of the recession, but looking forward, it is very hard for me to see where the opportunity will be once the economy begins to grow again.
Back at the Optimist Club meeting in Kingsport, Wayne McConnell worries for the next generation. He’s retired now but spent most of his life working at a paper mill. I asked him who he blames for the hurt here and he starts with Washington.
Wayne McConnell: I’m about to the point that in my book, they need to load all of them in Washington up on a big plane, take ’em over and turn ’em loose in Afghanistan, and leave ’em over there.
But McConnell saves his real anger for Wall Street bankers.
McConnell: Well in my book, they ought to hang ’em. I mean, when you take bailout money and then you pay ’em $2 or $3 million bonus, something ain’t right there on that. We’re not used to that high-paying job down here though, I don’t think.
There’s no doubt about that. The average person here makes about $20,000 a year. McConnell says many of the workers at his old paper mill are in their 70s. He says they’re afraid if they retire, they won’t be able to make it.
In Kingsport, Tenn., I’m Jeremy Hobson for Marketplace.
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