In the stories Americans tell about the decimation of middle-class life, international trade tends to get a prominent role. Anger over joblessness and diminishing fortunes in factory towns helped propel Donald J. Trump to the White House.
Yet a look at the sources of American distress reveals another factor: a far less comprehensive social safety net than in the rest of the developed world. That defining feature of the American economy has left workers uniquely vulnerable to the pitfalls of joblessness. The stakes have grown as trade has expanded.
That reality emerges from a comparison of layoffs in the United States with the experience in other countries. This is the story of two women who lost jobs — one in Ohio, the other in Sweden — and what happened next.
In Lordstown, Ohio, the calamity unfolded just before Thanksgiving in 2018. General Motors was shifting production to Mexico from the local auto factory, where Melinda Minor had worked for 17 years. The wages she and her husband earned — $33 an hour — had paid the mortgage on the home where they raised three sons. Their health care had covered the insulin pumps and frequent doctors’ visits that she required to manage her diabetes.
“I was frustrated and furious that those jobs were going to another country,” Mrs. Minor, 47, said. “I was terrified. I don’t know what it’s like in other countries, but here, if you lose your job, you’re out of luck.”
In northern Sweden, Josefine Soderberg was also consumed by fear as she absorbed similar news last year. She was working at Northvolt, the largest electric vehicle battery manufacturer in Europe. The company’s descent into bankruptcy — in part because of difficulty competing with China — eliminated Ms. Soderberg’s job and some 4,000 others.
Yet almost immediately, Ms. Soderberg, 30, took comfort from a level of support not afforded to Mrs. Minor. In Sweden, as in most of the wealthy world, the government runs a national health system. A job coach helped her, under a program that Swedish employers fund. She recently started her own business, making and selling her art.
“If we didn’t have free health care, I couldn’t have done this,” Ms. Soderberg said. “I don’t have to be scared of getting sick or something, because I can count on the system.”
These contrasting outcomes illustrate why large numbers of American workers see trade as a threat to their livelihoods. There is a sense of economic insecurity that goes beyond the shifting of factory work overseas.
“Nobody goes to Walmart and says: ‘Well I’m just outraged! Look at all this stuff that is made elsewhere!’” said Mark Blyth, a political economist at Brown University. “Your backlash to trade is ‘My town sucks because everyone lost their job, and all the cafes are shut down, and the school now sucks because it’s funded on local taxes.’”
Six months after a job loss, an American family of four — two parents and two children — typically receives unemployment benefits amounting to 36 percent of the family’s previous income, according to data compiled by the Organization for Economic Cooperation and Development, or O.E.C.D.
In Sweden, the same family would gain benefits that are almost double the American share — 70 percent of its previous income — and that does not include the value of health care or university tuition. A similar share, 69 percent, would flow to the same family living in countries within the O.E.C.D., a group that includes South Korea and Colombia.
Americans are, for understandable reasons, especially disturbed by layoffs. And that helps explain not just hostility toward trade, but also labor opposition to the deployment of new technologies, such as electric vehicles and automation at ports.
Government programs dating back to the middle of the last century have promised to aid workers whose jobs are undone by trade and technology. But Congress has often withheld funding.
“We talk about helping workers, and we don’t do it,” said Howard Rosen, a labor economist who served as an adviser to the Joint Economic Committee in Congress in the 1990s. “In Europe, they don’t talk about it; they just do it.”
A social safety net for competition — not compassion
In the American imagination, Sweden tends to conjure images of a socialist nanny state, in contrast to the ruthless form of capitalism that prevails at home. Yet those who run Sweden’s job transition programs say they are intended to make companies more competitive by giving them greater flexibility.
Ninety percent of businesses there pay 0.46 percent of wages into a fund that finances such programs. They include skills training, and job coaches who help workers who have lost their jobs navigate the unemployment system.
The employers voluntarily participate because of what they receive: the power to hire and fire in pursuit of greater profit. When workers can count on a safety net, employers can deploy robots and abandon struggling ventures free of blowback.
This was the source of Ms. Soderberg’s sense of assurance after Northvolt’s collapse.
The company was started by two former Tesla executives, using $10 billion raised from major investors, among them Goldman Sachs and Volkswagen. They constructed a complex of factories just outside Skelleftea, a city of 78,000 less than 200 miles south of the Arctic Circle.
Ms. Soderberg worked there for two years. She brought home 28,000 Swedish kroner a month (nearly $3,000) and sometimes as much as 40,000 after overtime. This was roughly double her earnings in her previous jobs, working the counter at a candy store and assisting adults with disabilities.
The work filled her with a sense of mission. She worried about climate change. Northvolt felt like a potent response.
The operation was so huge that a network of shuttle buses ferried workers from building to building so they would not have to venture into winter temperatures that sometimes dipped to minus 30 degrees Fahrenheit.
“It was like its own city,” Ms. Soderberg said. “It felt like we were part of something important, part of history.”
Yet from inception, the plant struggled, say former workers and union representatives. The pressure to expand was relentless. Everyone grasped that Europe was racing to compete with lower-cost batteries produced in China. As the factory failed to make quality products, automakers canceled orders.
“I thought, ‘This is too big to shut down,’” Ms. Soderberg said. “It was impossible that it would end this way.”
Yet suddenly, on a day she wasn’t scheduled to work, her phone buzzed with a text summoning her to the factory. A woman she had never met abruptly delivered the news. She would receive one month of severance pay.
She went home, shellshocked. Then she received a call from her newly assigned job coach, Anna-Karin Furuskog.
‘The beginning of something new’
They met in person, at her office. Ms. Furuskog, 54, exuded warmth and kindness. And she pointedly urged her client to take her time in plotting her next career move.
“You’re sad, you’re maybe afraid,” she said. “But if you can turn that around and say, ‘OK, this is not the end. This is the beginning of something new. I can do whatever I want, and must discover it,’ you can see what is possible.”
To the American ear, the idea that joblessness could be a portal to self-discovery may prompt dismissal as positive thinking shtick. In places like Ohio, laid-off workers are too worried about securing health care to contemplate their inner selves.
Ms. Furuskog’s counsel was supported by the reality that everyone has health care.
Ms. Soderberg told her that she found contentment in nature. Ms. Furuskog encouraged her to consider a career in forestry management. She would go back to school to get a degree.
But then Ms. Soderberg found herself drawn to running her own business. She went into the woods and conjured oil paintings of wildflowers and animals — moose, deer, caribou. She discovered that artists were finding success using social media to connect with audiences while selling their works online.
She enrolled in a class at the state employment office that instructed her in how to run a small business. She got a six-month extension of her unemployment benefits under a plan for people starting their own companies.
She battled nervousness about her finances but took satisfaction from making a living in a way that felt meaningful.
A California start-up recently bought the Northvolt plant and intends to resume production. Ms. Soderberg has no plans to return, but she sees the factory as a backup option if her business falters.
What is lost
In Lordstown, Mrs. Minor had not seen it coming.
On her drive to work for her morning shift in the fall of 2018, she was thinking about the coming holiday — her parents, her husband’s parents and their siblings all crowding into their one-level brick home for turkey and football.
She worked on the assembly line, making Chevy Cruze sedans. Everyone knew the vehicle was being discontinued. Yet all were hopeful that the factory would be sustained by a new model, the Chevy Blazer.
But a few hours into Mrs. Minor’s shift, plant managers abruptly halted the line. A man speaking through a hand-held microphone calmly explained how her life was about to be turned upside down.
General Motors had operated the plant since 1966, long enough for more than 16 million vehicles to be manufactured there. The last day of operation would be four months away.
Some people cried. Others shouted. Mrs. Minor was too stunned to react. Her oldest son, a high school senior, was headed to college the next year, and his tuition bill would have to be paid. On top of this, her diabetes medications were not getting any cheaper.
By the end of her shift, G.M. had announced that it would make the Blazer in Mexico, where autoworkers earned as little as $2 an hour.
“I’ve worked my whole life, and I’ve worked my ass off,” Mrs. Minor said. “You thought you were going to retire at G.M.”
The company gave employees the option to keep their jobs by transferring to another American plant. But that was a nonstarter for Mrs. Minor and her husband, Donny. They were not going to pull their three boys out of the local high school. Her brother was ill, and she was taking care of him. Donny’s parents were aging.
So they accepted buyouts of $50,000 each. They made use of a since-discontinued government program called Trade Adjustment Assistance. It paid their tuition to train them for new careers.
Mrs. Minor emerged with a certification to maintain heating and air-conditioning systems. She got a job as a maintenance supervisor at a residential treatment center for troubled youths. It paid $21 an hour, a cut of more than one-third of her paycheck at G.M.
The worst part was the change to her health care — a $3,000 deductible, and 20 percent payments for all her medicine.
“We were insurance broke,” she said.
When her husband needed back surgery, they sought to enroll in Medicaid, the government health care program for those with low incomes. Their income was $200 over the annual limit to qualify. Then when her son enrolled at Kent State University, they learned they earned too much for him to gain cash grants.
“You either have to be wealthy or poor,” she said. “You can’t be in the middle.”
Two years ago, Mrs. Minor got a job at a new electric vehicle battery factory in Lordstown, a joint venture between G.M. and LG, a South Korean conglomerate. The United Automobile Workers organized the plant, bringing wages into its national contract. She now earns more than in her G.M. days.
Still, she nurses a gnawing feeling of having surrendered something more than money — her faith in the American bargain.
“For what we lost,” she said, “it did not equal out.”
Christina Anderson contributed reporting from Stockholm and Skelleftea, Sweden.
Peter S. Goodman is a reporter who covers the global economy. He writes about the intersection of economics and geopolitics, with particular emphasis on the consequences for people and their lives and livelihoods.
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