Storm Lake, Iowa is the new rural America

The New York Times dropped in on Storm Lake, Iowa and found  a good reason why so many people are having a hard time getting ahead while working harder than ever. The economy is a system that’s gamed.

The Times  introduced us to Dan Smith, who started working at a pork processing plant in 1980 at $16 an hour, fair wages back in the day.

That’s $50 an hour in today’s money. But Dan Smith isn’t making today’s money anymore. He’s making $16 an hour. He’s about to retire.

Immigrants have moved into the area but they’re not the reason wages were driven down. The people who own the plant are.

First was Hygrade Food Products Corporation, an old-style meatpacking house that introduced Ball Park Franks to the Detroit Tigers’ stadium in 1957 and operated the Storm Lake plant when Mr. Smith went to work there. Faced with competition from new companies that had developed a faster, more efficient method of boxing beef and selling it to supermarket chains and fast-food outlets, Hygrade in 1981 asked its workers to take a pay cut of $3 an hour. When they refused, the plant closed.

With vigorous support from town leaders, the upstart Iowa Beef Processors (later known as IBP) bought and reopened it a few months later — slashing wages by more than half and shunning the union.

At that point, Mr. Smith returned to do night cleanup, earning $5.50 an hour with no benefits, but a vast majority of his former co-workers were turned away, he said, because the new owner did not want to hire union supporters. Instead, the company began actively recruiting in Mexico and in immigrant communities in Texas and California.

“They learned real fast to keep a sharp knife and didn’t complain if they had a sore arm,” Mr. Smith said.

The new form of meatpacking that sprang up in Iowa and the Midwest transformed the industry.

The new form of meatpacking that sprang up in Iowa and the Midwest transformed the industry. “There was lower pay, faster lines and higher injury rates,” said David Swenson, a regional scientist in the economics department at Iowa State University.

Tyson Foods bought IBP in 2001, and its red oval logo greets visitors as they drive into town. Tacked onto the entry gate, a large banner announces, “New starting pay” — $15 an hour on the production line.

Businesses convinced people that to keep jobs, they had to get rid of the unions. The pay is so low now that the local plant has a hard time finding workers.

“I don’t think you could get white guys” even if wages at this point were raised to $20 or $25 an hour, Smith says.

Storm Lake, apparently, is considered a model of how to keep rural America alive. Attract plenty of immigrants who’ll work in the drudgery of a processing plant for poor wages, go through the communal growing pains, and weather the hostility toward them as if what happened to rural America is somehow their fault.

If they’re lucky, the kids there today won’t move away when they’re grown.

Most of the farm boys and farmers’ daughters have left, said Mr. Cullen of The Storm Lake Times. “Second-generation immigrants want to stay with their families,” he said from the cozy one-room newsroom. He jumped up from his chair to hunt among the stacks of newspapers for a recent edition that featured a scholarship student from El Salvador returning from college to Storm Lake to start a house-painting business. “Those kids are our future.”

Immigrant parents who labor on the production lines say they want their children to go to college instead of taking their places at the plant. But the expectation is that those children will return home after graduating.

This is how it’s always been in factory town. Parents want their kids to get a better education and a better life. More often than not, that was achieved somewhere else. The kids led  better lives somewhere else; the hometowns died.

Can Iowa be different?

A local priest says Storm Lake has changed, it’s not as hostile to non-whites as it was a decade or so ago.

“There is a kind of comfortableness. This is who we are now,” he says.

So maybe the kids will go get their education someday, come home and make their hometowns a better place.

Good luck, Storm Lake. Recent history is not on your side.

Related: Western Minnesota town’s residents seek to help fearful immigrants (WDAY)

  • Veronica

    As the child of a union worker, I have little sympathy for workers who thought leaving a union would help them. Pick up a history book.

    Just as when small town grocery stores are shuttered because residents would rather drive for an hour to go to Wal-Mart, rural America has made its own bed in so many ways.

  • Guest

    GEE bringing in 11-12 million illegals HAS an effect on supply & demand. HMMM who brings them in, owners or Sanctuary Cities? The owners pay the least it takes to get applicants who can do the work, same as every other owner.

    IF there was an effective border, what would wages look like with 12 million fewer entry level workers.

    IF allowed to stay, what is to stop the next 12 million and the next and the next????

    • Veronica

      Oh, darling. Again, read the history books and/or headlines.

      Our agricultural economy has always relied on migrant workers. Dairy farmers rely on immigrants to get their cows milked. Meat packers have always, always relied on the newest immigrant wave.

      Pick up a book. Otherwise, stop your whining and apply for those jobs you think only exist to be filled by your immigrants.

    • There is nothing in the story about any immigrants being illegal . The story isn’t about illegal immigration.

      Take a time out for trolling.

    • Chris

      In the late 80’s and early 90’s the already profitable meat packing industry decided to break the unions, and they won. Then they had to find workers who would take the now low paying jobs. Undocumented workers would not be here if there were not jobs ready for them and employers willing to look the other way. One huge contradiction at the heart of the republican party is the corporate interests who want a pool of workers willing to work these dirty jobs for low pay, vs. the formerly well paid workers who are told to blame the illegal immigrants for their economic circumstances. The racism of people like Trump is what keeps most republican voters from seeing the truth.

      • The Hormel strike in Austin was a lab rat on the question. When you think about the incredible inflation of the late ’70s and Hormel had frozen wages for 8 years and then came looking for cuts, it’s hard to blame the union workers for taking a stand.

        This was back when workers took a stand, of course.

        https://www.mprnews.org/story/2010/08/17/austin-hormel-strike

        The ability of the spin doctors to portray the economic situation as “greedy unions” was instructive for future generations, where the new spin doctors realized that things didn’t have to be true to get people to believe it.

        • Chris

          There is an excellent book, “No Retreat, No Surrender” about the Hormel strike written by the Strib reporters who covered it.

  • MrE85

    “Second-generation immigrants want to stay with their families,”

    A co-worker of mine, who grew up in Latin America, says it is a cultural misinterpretation to believe that multi-generational families from south of the border live together because they love family life so much — it is simple economic reality. Live with your parents or on the streets.

    • Al

      Which is makes how many of us white millennials are intentionally moving back closer/with parents (not necessarily for economic reasons) especially interesting.

  • Mike

    >>Immigrants have moved into the area but they’re not the reason wages were driven down. The people who own the plant are.

    Actually, it sounds like increasing automation was the reason. That’s not to say a better solution couldn’t have been found, but cutting wages was the easy answer in 1981. It still is.

  • MikeB

    Starting at $16 per hour in 1980. Ending at $16 now. That number says everything about what we have allowed (conditions in our control) and what has been done to our economy (factors outside of our control).

  • Rob

    I grew up in Sioux Falls, SD, a community that also acted against its own economic interests by backing the sale of the John Morrell plant to a union-busting enterprise. Several of my uncles made a very solid middle-class living at the plant during the ’50s, ’60s and ’70s, thanks to a strong union. When the plant was bought out, the new ownership squeezed out the union, established subsistence wages, and sped up production. Go, American Exceptionalism!

  • jon

    The more I read about the “rigged system” (re-tuned to distribute the wealth away from the workers) the more I consider Marx… And wonder if he wasn’t just a century or two before his time…

    We’ve created a society which reflects Marx’s proletariat and bourgeoisie very nicely… and a large chunk of society is generally pissed off about it…

    It’s particularly interesting that we credit the same president with ending the cold war as we do “trickle down economics” … perhaps reagan will be seen in the future as the man who won the cold war, but lost the ideological war…

    We’ll see how things pan out with autonomous vehicles, but that is one of next big legs of automation that we need for a fully autonomous means of production, workers completely removed from the building of things.

    • Rob

      It’s estimated that there are 3.5 million truck driving jobs in the U.S.; the advent of self-driving trucks will have a nuclear effect.

      • jon

        8% of the entire GDP of the us is logistics and transportation…

        Health care is ~16% (there may be some overlap)

        People thought Obamacare was disruptive, or that the AHCA will be disruptive… they only touched a small part of that 16%… autonomous vehicles will touch a big part of that 8% (which is probably larger than 8% because I don’t think that includes private vehicles, or moving people…)

        • Rob

          Nor local delivery drivers…

    • >>perhaps reagan will be seen in the future as the man who won the cold war, but lost the ideological war<<

      "Perhaps"?

      His administration did more to destroy the "middle class" than any administration in recent times. The Reagan administration was an abject failure for the "little guy" in SO many ways.

      • jon

        sorry, “Perhaps reagan will be universally seen as the man who…”

        • Universally? Probably never.

          Heck, Trump still has supporters and by all accounts THIS administration is trying to outdo any previous administration for ineptitude.

          • jon

            On a long enough time line all of trumps supporters will be dead.

            When that happens, the historians can start to decipher what happened without the prejudice of human memory.

    • Barton

      Marx wasn’t ahead of his time. He posited that one had to go through these cycles of industrialization before communism could be achieved. It’s just that Lenin & co. skipped many of the steps necessary and tried to instill Marx’s theories on an agricultural economy.

    • Brian

      I just read “The Proud Tower” by Barbara Tuchman about the years leading up to WWI (so about 100 years ago). Many of the social upheavals seemed very familiar today.

      • AL287

        Read Jacob Riis’s “How The Other Half Lives”

        This was required reading for my American History course many years ago at LSU.

        Sadly it still has parallels today.

  • Karl Crabkiller

    I worked at a union pork processing plant on summer breaks from college in the late 60’s. The pay was about 5x minimum wage; 60 hour weeks with overtime I probably made more money than my local banker. The union was more concerned with work rules (who could do what work and when – seniority) than health or safety. There were daily work stoppages over union grievances shutting the whole processing line down. It was hard boring work with no future.

  • lindblomeagles

    The United States, from a historical work/jobs perspective, rather quietly, has tried since the Founding to increase worker productivity at the least cost imaginable. It’s been such a part of our history that we take it as nothing special even though several pages of legislation and regulation has been written in response to US bosses trying to spend nothing on production. Slavery, coal mining, meat packing, auto manufacturing — anything related to making money in this country, its workers has had to fight very hard to get bosses to pay people money. We shouldn’t be surprised white workers have no faith in Storm, Iowa. And we shouldn’t be surprised the packing plant there keeps trying to cut costs, even if it has to beg immigrants to work its jobs.