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Globalization brings a world of hurt to one corner of North Carolina

By Peter Whoriskey
Washington Post Staff Writer
Tuesday, November 10, 2009; A01

HICKORY, N.C. -- The expansion of global trade may enrich the United States, as economists say, but it has overwhelmed this manufacturing area beside the Blue Ridge Mountains.

The region has lost more of its jobs to international competition than just about anywhere else in the nation, according to federal trade-assistance statistics, as textile mills have closed, furniture factories have dwindled and even the fiber-optic plants have undergone mass layoffs. The unemployment rate is one of the highest in the nation -- about 15 percent.

"Our stitching was perfection," said Geraldine Ritch, 62, whose $15 an hour job sewing leather in a furniture factory was cut last year. "So I never thought we'd lose our jobs to China. But we did. We did.

"Now what is everyone supposed to do?"

As the Obama administration defines its stance on foreign trade, it has been besieged by complaints about the legions in Hickory and elsewhere who have lost their jobs to overseas competition. The national unemployment rate surged to 10.2 percent in October, the highest level since 1983.

Officially, the remedy for these workers is Trade Adjustment Assistance, a long-standing federal retraining program that offers community-college tuition and extended unemployment benefits to tens of thousands of workers affected by foreign competition. Its budget has run about $1 billion annually.

But as interviews with a few dozen people here show, much of the damage to the affected workers is not so easily mended.

Many workers are forced to forgo the training because they cannot afford to live on unemployment benefits long enough to get the training certificate or a degree. The average unemployment check is roughly $300 a week, and many study without benefit of health insurance.

Ritch, for example, is enrolled in a class to learn how to work in a doctor's office, but she recently lost her home and her health insurance.

"I pray," she said.

Moreover, of those who manage to finish their retraining, a significant percentage do not find jobs. Of those who do, about half earn only a fraction of their former pay, a 2000 Government Accountability Office study found.

Ken Austin, 55, has twice lost jobs to foreign competition, one in textiles and one at a furniture company. Now he is enrolled in a two-year program that will teach him how to install heating and air-conditioning systems. When he finishes, he hopes to find a job earning about $25,000, or about two-thirds what he made driving a forklift at a furniture company.

But like many trade-displaced workers, many of whom are older than 40, Austin is worried about getting a job at all. He worries that employers may prefer their entry-level workers to be young.

"I've got a lot of good left in me," he said.

Theory vs. reality

Economists say that free trade generally promotes U.S. economic growth and a higher standard of living. In addition, proponents of free trade say, the U.S. job losses will be overcome as businesses and workers shift into more profitable industries.

But here in Catawba County, the high unemployment rate has dampened confidence in such notions.

"The people in the think tanks keep saying we are going to become -- what's the term? -- an 'information and services' economy," said Allan Mackie, manager of the North Carolina Employment Security Commission office. "That doesn't seem to be working out too good."

"Ten years ago, every able person who wanted a job had a job," said Rep. Patrick T. McHenry (R-N.C.). "Our unemployment problem began when China entered the world market full force."

Even though Trade Adjustment Assistance is, as some of its conservative detractors note, a government program, it has the support of many in this conservative-leaning area.

Austin, a fan of conservative talkers Rush Limbaugh and Sean Hannity, put it this way:

"It's the government's way of apologizing for taking our jobs away. I'm not going to turn it down."

Created in 1962, Trade Adjustment Assistance was supposed to compensate workers hurt by the lowering of U.S. trade barriers.

The program, President John F. Kennedy said, "will not be a subsidy program of government paternalism" but rather "a program to afford time for American initiative, American adaptability and American resiliency to assert themselves."

Effects on workers

But while the assistance has been used to win passage for more international trade agreements, its effects on workers have been rarely studied.

The GAO analysis from 2000 found that 75 percent of displaced workers in TAA found jobs. Of those, only 56 percent earned 80 percent or more of their previous wage.

In 2002, Congress called for another impact analysis of the program. The report is two years away, a Labor Department spokesman said.

The inattention to the program's effectiveness is evidence, critics say, that its primary purpose is political and that its actual benefits for workers are an afterthought.

"For years, proponents of free trade made a lot of promises to workers that were hurt by trade, and those promises were forgotten by the time the trade agreements were signed," said Howard Rosen, executive director of the Trade Adjustment Assistance Coalition, a nonprofit group that assists workers and communities.

Rosen noted that this year's economic stimulus package expanded the program, significantly boosted funding and made it easier for workers to participate. But he called those changes just a start.

A hard-hit state

Since 2002, the Labor Department has certified more than 90,000 jobs in North Carolina as lost because of foreign competition -- more than in any other state.

Such a certification, made when federal investigators find that a job loss was caused by imports or the transfer of an American plant overseas, means that the affected worker is eligible for trade adjustment benefits.

In Hickory, the heart of the afflicted region, workers enrolled in programs at Catawba Valley Community College and Caldwell Community College and Technical Institute said they welcome the retraining opportunity.

They are taking courses in accounting, air conditioning, landscape design, nursing, medical technology and other fields in which there is perceived demand.

Some workers have prospered after the training, or expect to, though for now the recession has dulled their prospects. But the program has done little to mitigate the anger many feel for the North American Free Trade Agreement and other such pacts.

Thomas Stinnett, 43, was laid off from a truck factory earlier this year after the company started production in Saltillo, Mexico. He looked around for another job but was unwilling to work for half his old wages.

"At my age, I didn't want to go back to school," he said. "But I looked around and everything was $8, $9, $10 an hour. I said, 'Hell, I'm worth more than that.' "

He's now in a two-year degree program and plans to get a job in law enforcement. Since the unemployment payments aren't enough to get by on, he told his wife, a stay-at-home mom, she'd have to get a job. She's managing a Subway sandwich shop.

"I wish they'd just flush the whole NAFTA idea and tell all the other countries the heck with you," he said.

The program pulls into school people who might otherwise have given up on their education, but for many, "it's not an easy transition," said Garrett Hinshaw, president of Catawba Valley Community College. "You're taking someone who has been working for 25 years and saying, 'You can't do that anymore.' "

Many left high school decades ago and must take remedial classes in English or algebra, extending the length of their studies. Others feel forced to make quick decisions about what their next career should be because of the program's time limits.

"You choose a field because you are desperate for a program," said Lisa Adams, 47, who lost her job at a fiber-optics plant and then earned an associate's degree in health-care management. "I thought I would go into nuclear medicine. But you're herded like cows. People are corralled into careers."

These days, she says, she gets up at 5 a.m. to search Web sites for jobs, then searches again in the afternoon and then again before she goes to bed. Her husband, also laid off from the fiber-optics plant because of foreign competition, is also enrolled in TAA classes.

"We don't want to lose our home," she said. "I'm just not seeing where the jobs are."

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