Healthy State, Worried Workers: Edward Gresser
North Carolina in the World Economy
The Pillowtex bankruptcy, of course, left the Kannapolis textile workers without jobs. This was
only the most obvious aspect of their troubles. Their health insurance was terminated as well;
the North Carolina Rural Center says that it was so sudden that it left $5 million in unpaid claims.
And the region’s heavy reliance on the mill complex meant that new jobs were not readily
available.
In such circumstances, American workers get relatively little help, and those affected by trade
competition get more than most. John F. Kennedy’s Trade Adjustment Assistance program,
bolstered most recently by Senate Democrats in 2oO2, offers them two years of support for job
training, some help in buying private health insurance - the workers received a $7.6 million grant
from the federal government for this purpose - and some stipends for job search.
State governments also have resources. Given the scale of the Pillowtex layoff, Governor Easley
was able to create a special task force - combining agencies dealing with business development,
education and training, health and other local areas - charged with the single task of providing
the Pillowtex workers an array of services sufficiently broad to help them find work quickly when
possible, train for new jobs when necessary or desired, and avoid health and financial disaster.
Local community colleges designed special courses meant to create new skills, including
courses in pharmacy technical work, medical coding and billing, welding technology, electrical
repair and similar skilled blue-collar jobs.
Many dislocated Pillowtex workers used these services. The North Carolina Rural Center’s
recapitulation of the relevant statistics include:
- Unemployment benefits - often including special trade-related benefits - for 4,820 people at a
cost of $67 million;
- Continuing education for 2,230 through community colleges and 934 for high school equivalency,
- State job training for 2,0108.
Very recent evaluations of the success of these initiatives are not easily found. But as of 2006,
they seemed mixed. By late 2005, about 2,730 Pillowtex workers - three in five of those laid off
in 2003 - had found new jobs, mainly in fields outside manufacturing. Many of these, if the
general pattern for people laid off from factories holds, would have had to accept salaries below
their Pillowtex earnings. (The North Carolina Rural Center finds that the typical North Carolina
factory worker taking a new job after a layoff has taken a 25% pay-cut, and a third of the workers
earn less than half of their earlier salaries9). Some would not have health insurance; and the fact
that 2,730 of the workers are employed implies that as many as 1,900 might not have found jobs
at all.
IV. Assessment and America’s Eroding Social Contract
What can we draw from this experience? One can draw in essence three conclusions.
First, the process of “globalization,” with its advantages and stresses, seems very difficult to slow
or to change. (In the absence, of course, of some repeat of the wars and depressions that
derailed the 19th-century global economy.) The textile and garment industries have been the
most ‘protected’ American manufacturing industry, are still hedged about by some of our highest
tariffs, and also won 30 years of quota protection between 1974 and 2004. None of this made
much obvious difference. As technology and logistics improved, and as Asian countries grew
more competitive, the employment value of the protective tariffs quotas drained away. Pillowtex,
of course, closed before the quota system was abolished.
8 Back on Track: 16 Practices to Help Dislocated Workers, Businesses and Communities, North Carolina Rural
Center, September 2006, pp. 26-27.
9 http://www.ncruralcenter.org/databank/trendpage_Employment.asp.