Inside Out | Trump talked the talk at Davos, but working-class Janesville is where he’ll have to walk the walk
This proud, middle-class community was respectable, but over years of safe and unionised employment in the huge domestically focused motor industry, it became used to salaries and living standards that could not be justified by relatively low skills, and lack of global competitiveness.
It was an uncharacteristically well-behaved Donald Trump who flew out of snowy Davos at the weekend, after assuring the world’s business elite that “America First did not mean America Alone”, committing to free trade “as long as it was fair and reciprocal”, and providing a strong sales and marketing pitch for global business to invest in the United States.
“After years of stagnation, the United States is once again experiencing strong economic growth,” he said. “Consumer confidence, business confidence and manufacturing confidence are the highest they have ever been in many decades.”
While Trump was talking, I was reading Janesville: An American Story, by Amy Goldstein at The Washington Post – a sobering story of a 100-year General Motors town in Wisconsin near Chicago that imploded in 2008, when the American motor industry collapsed across the country during the great financial crash in the US.
Her story was powerfully at odds with Trump’s Davos marketing pitch, and I know which story had the ring of truth.
Asking directly how the 63,000 population of Janesville had fared since 2008, Goldstein was clear: “Surprisingly well – or not – depending on how you measure.”
Unemployment that peaked at almost 14 per cent after GM and its network of local suppliers went belly-up is now back at 4 per cent – its lowest level in almost two decades. Up to 2,000 new jobs have been created, but employment is today 4,500 lower than in 2008.
Home values are sharply down, as are household savings. Most importantly, 56 per cent of the community are earning less than when GM crashed, and average wages have toppled from US$28 an hour, to between US$15-16 per hour today.
A survey of the community, hometown of Paul Ryan, Republican Speaker of the House of Representatives and architect of the tax reform plan just put through Congress, says that 76 per cent of the population still believe the town is in recession. Up to 75 per cent say they are worse off than in 2008.