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Income inequality is surging, and there are few countries where it is rising faster than the United States. The distance between rich and poor is greater in America than nearly all other developed countries, making the US a leader in a trend that economists warn has dire consequences. GlobalPost sets out on a reporting journey to get at the ‘ground truth’ of inequality through the lenses of education, race, immigration, health care, government, labor and natural resources. The hope is to hold a mirror up to the US to see how it compares to countries around the world.
Sheboygan, Wisconsin has one of the most even distributions of income in the US, but the middle class now fights to preserve its prosperity.
Midwestern states were among the earliest and most enthusiastic participants in the second industrial revolution. From Detroit to Milwaukee to Mankato, people built foundries and steel mills and factories. They built the crucial machines of the 20th century – cars, cameras, backhoes, pacemakers, tractors, radios, motorcycles, washing machines and airplanes. The auto industry in Detroit led the way, but its supply chain reached into towns across the region, including Sheboygan. And the Midwest was the nation’s breadbasket too. It had the best farmland on the continent and giant food companies like Archer Daniels Midland, Cargill and General Mills.
Workers could expect to graduate from high school, get a job at a factory, raise a family, send their kids to a Big Ten university and retire comfortably. The Midwest was the “place that created the American mass middle class,” Lou Glazer, president of the economic and public policy group Michigan Future, wrote. “Largely because of high-paid, unionized factory jobs this was the place where if you worked hard you were most likely to realize the American Dream.”
The future of human consumption is anyone’s guess, but one thing is certain: $30 per hour on the assembly line will be tough to come by. What workers expected and received in the Midwest after World War II – which Glazer refers to as the “American Dream” – looks now like a highly specific moment in human history, one that doesn’t translate to the future.
The Sheboygan River winds its way across the level land to the big lake, and the first residents of the city settled on its banks in the 1830s. The first wave of German immigrants came in the 1840s, bringing with them an enduring reputation for thrift, industry and sausage-making. Sawmills, flour mills and cheese factories sprang up across the region. The city’s south pier eventually came to serve as a dock where large lake boats unloaded coal onto smaller boats that could make their way to other towns further inland by navigating the little rivers that empty into the lake. (It is now a resort and hotel.)
The Kohler Company was founded in 1873 by an Austrian immigrant named John Michael Kohler, when he and a partner bought a foundry that made field plows and feed cutters for farmers.
The Kohler Design Center features thousands of kitchen and bath products and has become a tourist destination.
Kohler introduced enameled steel bathtubs to American consumers in the 1880s. Now the company sells all kinds of bathroom fixtures and motors and owns resorts and golf courses in Wisconsin and Scotland. The firm is one of the largest privately held companies in America and employs about a tenth of metro Sheboygan’s workforce.
The front office at Kohler looks like an administrative building at an Ivy League college. There’s a clock tower and a green lawn out front. Behind that is a complex of factories and parking lots stretching nearly a mile to the east. Opposite the office, on the other side of the street, stands the American Club, where bellhops in red coats and black bowler hats carry bags for tourists from Chicago. The club was built in 1918 as a dormitory for immigrant workers. Now it is an elaborate resort where people stay when they come to Sheboygan to play golf. A wood fire burned in a waiting room and women at the front desk were handing out champagne on a Saturday in January. The company’s tagline is “gracious living.”
“I don’t work for the money,” says Herbert Vollrath Kohler Jr., president of the company, in a promotional video at the Kohler Design Center. “I work to advance living environments, if you will, and I get very excited about that, whether it’s a golf course, whether it’s the interior of a house, whatever.”
The Kohlers have built their own little “living environment” around Sheboygan, including the American Club, an art center downtown adjoining the founder’s original home, and some famous golf courses. Whistling Straits, a traditional links course among man-made dunes next to the lake north of Sheboygan, has twice hosted the PGA Championship.
THEY CALL THEMSELVES ‘CHEESEHEADS’
A fish fry in the City Club Tavern and Grill in Plymouth, Wisconsin. Friday night is set for fish fries throughout Sheboygan County. A fish fry is a tradition when friends and family meet at the local bar at the end of the work week.
Over in Plymouth, Mayor Don Pohlman was bragging about his town and one of its companies, Sargento Cheese. It was Friday night at City Club, a bar in the middle of town. Waitresses were serving fried perch and Brandy Old Fashioneds garnished with olives. Pohlman noted his town’s work ethic, its high wages and its output of cheese.
Sargento, founded in 1953, cuts and packages cheese. If you live in America and shop for groceries, you’ve probably seen the name. The business generated a billion dollars in revenue in 2011.
“You don’t go there and goof off. You go there and work!” said the mayor. “There are no $20,000-a-year jobs at these cheese factories, they don’t exist.”
As sure as the sideburns that stretch down below his ears, Pohlman is confident in the family-held businesses that employ most of the citizens of his town. He tells stories about leaders from Sargento and Sartori remembering the birthday of a line employee, or showing up to a worker’s funeral. The companies pay well and they’re loyal, he said. They might not be if they weren’t owned by local families.
“If Sargento was owned by stockholders, the money would be moving out of town,” Pohlman said.
SHEBOYGAN’S FRAGILE FUTURE
And yet money is already moving out of the community, in the sense that Sheboygan County has lost the earning and spending power of thousands of manufacturing jobs over the past dozen years. All the private commerce in the world doesn’t exempt the area from the fact that labor is being automated and moving to countries where lower wages are acceptable.
Sheboygan is exactly the type of city that’s vulnerable. In 1990, two of every five jobs in the county was in a factory, and those positions paid about $47,000 per year. As recently as January, the Business Journal in Milwaukee reported that 46 percent of Sheboygan’s earnings are in manufacturing.
The county lost 8,400 – or 31 percent – of its manufacturing jobs between 2000 and 2011. Thomas Industries and Pentair left town. Auto parts maker J.L. French was bought by an Italian company. Hundreds more jobs were lost at Kohler. The 20th century’s golden age of factory jobs has been sliding for decades and the recession crystallized the shift by erasing 2.7 million manufacturing jobs in the United States between 2004 and 2011, according to the Bureau of Labor Statistics.
Improvements in information technology and artificial intelligence will almost certainly replace more workers in the future.
“Wages for average workers have basically been stagnant in spite of the fact that we’ve seen increases in productivity,” said Martin Ford, author of Lights in the Tunnel, a book predicting massive US job losses in the face of defter and more capable information technology. “The job market is polarized.”
The middle class in America lost both its factory jobs and a third of the value of its homes during the recession. That’s changed how the class defines itself, said Ken King, president of the Family Services Association, a credit counseling service.
“The middle class has gotten to the point where you can’t define it any more,” said King, who lives in a beige-and-brick house on a street that tees into a park in north Sheboygan. “We used to look at middle class as being a standard of living which is I have a house, I have a car and I have some toys.”
NOT ALL IN SHEBOYGAN ARE HOLDING ON
Alyssa Medina, 24, has a 1-year-old daughter and is homeless in Sheboygan.
The ranks of the poor in town have grown as the population in the middle is gradually eliminated.
Alyssa Medina and her 1-year-old daughter had just checked into a homeless shelter on a little hill just north of the Sheboygan River. Medina, 24, grew up in a trailer park with her mother and now has three children of her own. She also has health problems. She had been a temporary worker for Old Wisconsin Sausage, but was diagnosed with multiple sclerosis, stopped working and lost her apartment.
“My situation in itself is pretty complicated right now,” she said.
She handed a bottle to her daughter Elicia, a curious girl with curly brown hair. If Medina took classes to re-certify herself as a nurses’ assistant she could get a job at a nursing home making between $11 and $12 per hour. But that requires arranging for child care, and she says because of the M.S., she can’t see well.
“There’s ups and downs to your life and right now I’m in a down part,” Medina said.
She believes she will get things straightened out, but she knows it will be difficult.
“You need a good education to get a good job,” she said, wistfully.