America's Municipal Meltdown: It's Tough Times for Troubled Towns

By Nick Turse, Tomdispatch.com. Posted February 23, 2009.

Tough Times in the Midwest

Wilmington, Ohio, is another company town whose fortunes have plummeted. After overnight shipper DHL shut down its domestic courier service, the town went into a tailspin. Already, 3,000 jobs have been lost at the local airport. Within months the number is expected to rise to 8,000, according to an Associated Press report. As a result, in the town of 12,000, new claims for unemployment benefits are the highest they've been in 26 years and many businesses are facing the prospect of closing down, as is its hospital. "I think one in five small businesses will fail or could fail," says Wilmington's mayor David Raizk. As a result, more and more families are visiting local food banks, while community leaders are promoting backyard gardens as an inexpensive way to help feed families. In fact, Wilmington College is even opening up gardening plots on its property for needy townspeople.

In Lordstown, Ohio, a town of 3,600, General Motors and its 5-million-square-foot plant was the lifeblood of the community. In January, however, GM told 2,800 of its more than 4,000 Lordstown workers to stay home for the month. At the end of the month, 800 of them were told not to return. Now the town, which derives 75-80% of its tax revenues from the auto plant, according to the Youngstown Vindicator, is facing ruin. "We're a one-horse town in that regard," said Mayor Michael Chaffee, who estimates, according to a CBS Evening News report, that for every GM job lost, at least two others are needed to replace it, due to pay differentials. Meanwhile, the Lordstown village council approved a wage freeze for its full-time workers and 60 part-time employees and is looking for other ways to cut costs, like suspending capital improvements like road repair. Elsewhere in Ohio, other GM towns are feeling Lordstown's pain. At GM's engine and transmission parts plant in Defiance, for instance, 100 GM employees were being laid off in mid-February.

GM isn't the only source of mid-Western woes, though. In recent months, massive layoffs by businesses in downtown Des Moines, Iowa, have caused great economic hardship. And the situation won't be getting better soon as software giant Microsoft recently shelved plans to build "a $500 million data center in West Des Moines" that would have brought with it 75 new jobs. On top of that, just this month the American Enterprise Group, a local insurance company announced 51 layoffs; the Des Moines City Council announced 88 jobs cuts; while the Des Moines County jail is contemplating unpaid furloughs or layoffs and a scheme by which inmates would pay for their own toilet paper. Robert Crandall, the executive director of the Bidwell-Riverside Center, a food pantry in Des Moines, noted that the number of families his group was serving had risen as much as 33% in recent months. "The really sharp [jump in numbers] started late summer, early fall," he told the Des Moines Register.

Tough Times in the West

In the West, California dominates the news with a seemingly endless string of stories about the deepening crisis faced by towns (sometimes in that state officially labeled "cities," even with populations of less than 1,000). El Centro, California, for example, boasts an eye-popping 22.6% jobless rate -- and while this is the highest rate in any metropolitan area, it isn't even the worst case in the state.

"We have a major problem to deal with," Mayor Robert Silva of Mendota, California, told local TV station KFSN in January. A month earlier, the "Cantaloupe Capital of the World" (population: 10,000) experienced the greatest spike ever in its unemployment rate. At an astounding 35%, it was clearly in a local Great Depression, whatever the rest of the country was in. In a rich agricultural area, it was also in a great drought as water supplies dwindled, fields were left fallow, and farming jobs dried up. Not surprisingly, with so many out of work, local businesses are suffering. Among the hardest hit are fertilizer and irrigation equipment suppliers as well as trucking companies with nothing to transport. "And, of course, it all trickles down to hairdressing shops, restaurants and other small businesses in town," Sarah Woolf of the Westlands Water District, which provides water to more than 600 family-owned farms in the region, told the San Jose Mercury News. Silva, who also works as a manager at a local store, agrees: "We're down 20% like all business in Mendota. Everybody's down." The fallout from the agricultural crisis has also hit the housing market where, the Wall Street Journal reports, Mendota's home sales "fell to fewer than 10 in the fourth quarter of last year from nearly 100 in the second quarter of 2007; [and] median prices dropped 37% to about $175,000 from a 2006 high of about $275,000…"

See more stories tagged with: economy, bankruptcy, main street, municipal government

Nick Turse is the associate editor and research director of Tomdispatch.com. His first book, The Complex: How the Military Invades Our Everyday Lives, an exploration of the new military-corporate complex in America, was recently published by Metropolitan Books. His website is Nick Turse.com.

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