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As Factory Job Losses Rise, So Do Risks to Bush

October 25, 2003|Warren Vieth | Times Staff Writer

MENOMONEE FALLS, Wis. — The gales of globalization are blowing hard across America's Factory Belt, but Cathy Schuldt does not plan to go quietly into the postindustrial era.

Schuldt, owner of Butler Wire & Metal Products Inc. in this Milwaukee suburb, laid off 19 of her plant's 49 employees after her customers began buying welded-wire baskets from Chinese suppliers who could deliver finished products for less than she was paying for raw materials.

She had plenty of company: The exodus from America's factories is responsible for all but 29,000 of the nearly 2.6 million U.S. jobs lost since President Bush took office. And that could have political ramifications as people like Schuldt share their pain in the voting booth.

Schuldt and her friends say they feel betrayed, abandoned and disenfranchised by the nation's economic elite and its defenders in Washington.

"George Bush had better get off his butt and start doing something. He still doesn't understand that the jobs that have left have left forever," said Schuldt, who is struggling to preserve the company her father founded 37 years ago. "Most of us have been conservative Republicans all our lives. I've never voted for a Democrat. But if I had someone I could vote for on the Democratic side that saw the picture, I definitely would."

Schuldt and other small manufacturers in Wisconsin have formed an organization called Save American Manufacturing Now, which is evaluating candidates for office based on their positions on trade issues. SAMNow recently endorsed the reelection bid of Sen. Russell D. Feingold, a liberal Democrat, and is considering endorsements in other congressional races, and possibly the presidential campaign.

Since 1979, when manufacturing employment peaked at 19.6 million, 1 in 4 factory jobs has disappeared. It took more than two decades to lose the first 2.5 million. The second 2.5 million have gone away since Bush took office in January 2001.

The main reasons: The sluggish economy reduced demand and forced companies to cut costs aggressively. Surging productivity enabled employers to produce more goods with fewer people. Outsourcing of production to China and other countries is responsible for as much as a third of the job loss, economists say. Other factors include rising production costs associated with regulation, litigation, health coverage and pension benefits

For the most part, the causes reflect long-term trends that began well before Bush arrived in Washington. But as his father learned a decade ago, voters tend to direct their economic anger at whomever is occupying the White House when the economy hits the skids.

As the 2004 campaign season begins, Bush's policies for dealing with the loss of so many jobs are under sharp scrutiny. The hemorrhaging has slowed in recent months amid a general economic rebound, and some analysts express hope it will be staunched as the recovery gains strength.

But even the optimists tend to agree this recovery is different. So far, it is occurring without a net gain in factory employment, and economists say it is likely that many of the lost jobs will not be restored. That's because most of the losses are attributable to permanent structural shifts instead of the cyclical layoffs typical of past recessions.

"They're not all going to come back," National Assn. of Manufacturers President Jerry Jasinowski said. Displaced factory workers "will have to move on," he said, into growing sectors of the economy, such as home building and health care.

Pete Merriman moved on earlier than most. After being laid off several times as an industrial electrician, he staked his claim in the service economy shortly after Bush assumed office in 2001. For the last three years, he's been delivering pizza for a living.

"It's hurt [Bush] in my view, that's for sure," said Merriman, who said he is making decent money toting thick-crust pizzas around Green Bay but would rather be wiring paper-making machinery again.The rate of decline during Bush's tenure dwarfs the experience of his father, George H. W. Bush, who was turned out of office in 1992 after presiding over the first "jobless recovery." Over the four years of the elder Bush's presidency, America lost factory jobs at a rate of about 26,000 a month. Since his son settled in the White House, the monthly job loss has averaged nearly 80,000.

"Unless perceptions change, this could be a big problem for the president," said G. Donald Ferree Jr. of the University of Wisconsin Survey Center.

The White House is paying attention. While still counting on tax cuts to revive the economy, administration officials have promised to crack down on trading abuses by China and other low-wage countries and are cajoling the Chinese to adjust their undervalued currency.

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