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$17 an Hour: Where the Jobs Went

A Rough Ride for Schwinn Bicycle

As the World Economy Shifted, So Did the Fortunes of an American Classic

By Griff Witte
Washington Post Staff Writer
Friday, December 3, 2004; Page A01

MADISON, Wis. -- In the glass atrium that marks the entrance to the Pacific Cycle company, the old and the new of the bicycle business are displayed side by side. Each is called the Schwinn Sting Ray, and each in its time has been a bestseller.

But the similarities end there. In the space of a generation, everything about the process of designing, producing and selling a Schwinn has changed.


Richard Schwinn, left, part of the last generation to run the company that bears his name, now runs a small custom bike factory in rural Wisconsin. At right is Marc Muller, co-founder. (Darren Hauck For The Washington Post)

_____Live Discussion_____
Transcript: Staff writer Griff Witte was online to discuss this article.
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Post writer Griff Witte discussed this story on MSNBC.
_____Graphics_____
The number of bicycles produced in the U.S. has shifted overseas.
Sketches by Frank W. Schwinn show commitment to quality.
Decline in manufacturing jobs corresponds to broader wage slowdown.
Specialty bike stores are becoming less common as mass merchants grow.
_____$17/Hour Series_____
About This Series (The Washington Post, Dec 3, 2004)
Slowdown Forces Many to Wander for Work (The Washington Post, Nov 9, 2004)
Permanent Job Proves An Elusive Dream (The Washington Post, Oct 11, 2004)
As Income Gap Widens, Uncertainty Spreads (The Washington Post, Sep 20, 2004)
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The old Sting Ray broke the conventions of bicycle design, boasting a banana seat, high handlebars and extra-wide tires. In the 1960s and early '70s it became not only a symbol of middle-class aspirations, but also a provider of thousands of jobs that paid good wages with health and retirement benefits.

Today's model, which projects the rough look of a motorcycle, comes from China, where the average factory worker makes less than a dollar an hour. It is a symbol of a different sort -- an illustration of how global economic forces and the sometimes clumsy responses of U.S. companies transformed middle-class jobs into low-wage work both at home and abroad.

In a nation that measures jobs in the tens of millions, changes to a few thousand barely register. But when multiplied across a wide range of industries, the rise and fall of companies such as Schwinn help explain why the economy has become less forgiving of workers who lack higher education or specialized skills.

"We're missing a big, important part of our society. Either everyone has to go to college or everyone has to have very low-paying jobs," said Richard Schwinn, part of the fourth and last generation to run the firm that bears his name. "I'm not sure that's a great balance."

The Schwinn Bicycle Co. went bankrupt in 1993 and sold off the brand. But at its peak two decades earlier, the Schwinn family oversaw a labor force of 2,000, the majority of whom never made it past high school. Several thousand more U.S. workers benefited from jobs at Schwinn dealerships, or in the steel and rubber factories that supplied parts.

Richard Schwinn, a large, bearded man with the bearing of a lumberjack, now oversees an empire of 17 at a small custom bike factory in rural Waterford, Wis.

About 75 miles away, in Madison, Pacific Cycle manages the Schwinn brand from a sleek office with just 80 workers. Pacific, part of a Canadian conglomerate, has a couple of hundred employees in California warehouses, taking in the bikes imported from the seven Chinese factories where most Schwinns are produced.

From California, the bikes fan out to mass merchants such as Wal-Mart. Once there, cashiers making less than $10 an hour ring up the latest Sting Ray at prices much cheaper than the original. Pacific sells more than a quarter of all bikes purchased in the United States, with just about 350 U.S. employees.


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