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.