How to fix what the innovation economy broke about America

Valerie worked at Bryan Metal Systems, making suspensions for Chrysler. She was making a lot of money there, but the company was acquired in 2005 by Global Automotive Systems. In 2010, Global closed the Bryan plant and sent the work to Michigan as part of a “global optimization strategy”. Valerie traveled to Michigan to help train her replacements. After that, she bounced back, sometimes working in temporary factories, until she landed at the Sauder Furniture Factory.

In 2019, unemployment was below 4% in Williams County, but higher-paying jobs had been replaced by low-paying jobs and a “temporary” status that employers maintained – in name only – in order that they do not have to pay compensation. Menards, a leading Midwestern home improvement retailer, has grown to become the county’s largest employer. Menards wrested a rich set of tax and infrastructure incentives from local and state government in exchange for setting up a distribution center about 15 minutes northeast of Bryan. By the end of 2019, people were starting at around $ 14 an hour, or about $ 28,000 a year, for a full-time job. Over the past 20 years, Williams County’s median household income (in constant dollars) has increased from $ 62,000 to $ 49,500. Defined benefit pensions have given way to less generous retirement savings accounts. Health insurance premiums have gone up. So have deductibles.

As the employment landscape has changed, the demographics of the county have changed. Young people, especially recent university graduates, have left and have not returned. I asked Les McCaslin, the retired chief of the Four County Alcohol, Drug and Mental Health Services Council and a native of the area, how he thought they could be persuaded to return. He recalls a recent economic development meeting: “We were talking about the city. And I just said, ‘Why would you want to come here? Why would I take my two children? ‘ And there was silence in the room. You had commissioners there and they couldn’t find a single reason.

The Ménard effect

Bryan Hospital, Community Hospitals and Wellness Centers (CHWCs), have taken on the fallout from these changes. As was the case in many of these communities, CHWC, an independent community hospital, has become the city’s largest employer. But he struggled to stay open and independent. As the county’s population grew increasingly poor and aging, many patients were eligible for Medicaid or Medicare, both of which pay lower reimbursement rates than private insurance. (The two government programs account for two-thirds of CHWC’s income.) So even though, for example, an MRI machine costs CHWC as much as another hospital in a richer area, CHWC is paid a lower rate. when used.

Former hospital CEO Phil Ennen calls it the “Menards effect”. The business was “a real problem for us,” he says. “Seventy-five percent of Ménards [employee] accounts with us are Medicaid, charity, or some sort of self-pay. From a health care perspective, he is a horrible employer.

A lot of people were like Valerie: they just didn’t go to the doctor. The spring after we sat in the church basement, Valerie was back there, this time counting the Girl Scout cookie money with her daughter and a friend. She still held three jobs. His back ached from an old injury during his days at Bryan Metal Systems. And she was coughing from an insect she thought she caught from a colleague of Sauder’s. Valerie ended up with bronchitis, an inner ear infection, and a sinus infection, but she didn’t miss a job because she didn’t have paid sick leave. “No! I went to work every day,” she said with a laugh, which caused a brief coughing fit.

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