There are few better cures for a feeling of optimism about the US economy than stepping into the Hot Stylz hair salon, in a strip mall on the outskirts of Indianapolis. The hair salon – which has a mainly black clientele – is in a state, Indiana, where unemployment is just 4.6 per cent – better than the national average of 4.9 per cent. But the men running clippers through customers’ hair are worried about their clients’ futures – and their own.
“Myself personally, I do a lot of factory work,” one of the barbers, Robert Curlin, says. “It’s very difficult to get into the kind of work where you earn [good] money and . . . don’t have to go through temporary service contracts.”
Hot Stylz is significant because it’s just across the road from the Carrier furnace plant, which has been a staple of Donald Trump’s stump speech for nearly two months. The 1,400 workers at the factory were told in February that the plant would close by 2019, with all its work being transferred to Mexico.
The closure has become a cause célèbre mainly because a worker videoed a manager making the closure announcement. The clip captured a telling vignette of the gap between workers’ sense of injustice and managers’ apparent lack of feeling.
The video shows the manager reading a statement urging the workers to maintain product quality right up until the closure. The workers greet it with a chorus of shouting and at least one loudly shouted, “Fuck you!”
Yet it’s only when speaking to the people affected by the closure that it becomes clear why there’s such anger. The workers aren’t – like, say, steelworkers in Port Talbot – being made redundant into a jobs market where there’s little demand for their skills. Economists say the problem for manufacturers in the Indianapolis area has been a shortage of skilled workers. The arrival on the jobs market of 1,400 people used to relatively high-grade manufacturing work could be helpful to them.
It’s not even clear that the US’s openness to the world economy – one of Trump’s main bugbears – has been to Indianapolis’s disadvantage. Many of the Carrier workers – who currently work for an arm of United Technologies, a conglomerate based in Connecticut – are likely to find themselves working in future for foreign-owned companies that have invested in the area. Rolls-Royce, the British aero-engine maker, is one of them.
The workers do, though, embody an erosion of pay, pensions and benefits that the US’s economic recovery hasn’t been able to reverse. Many of those discussing the problem sound genuinely fearful and anxious. Workers at the factory say they face cuts in their hourly pay rate from around $22 to as little as $10.
They’re likely, as Curlin notes, to have to start in new jobs on temporary contracts, possibly with sub-contractors. Any health insurance that a new employer provides is likely to offer worse coverage and higher “co-payments” – the often substantial contributions that patients have to make towards their treatment. Many of them will end up joining the army of Americans who juggle three or four different jobs to make up for their miserable pay levels.
“There’s going to be a lot of foreclosures now behind this,” another barber, who gives his name as Donny Clipperz, says, using the American term for home repossessions. “A lot of cars will get repossessed.”
It would be tempting, in a presidential election year, to expect many of those suffering from the Carrier closure to link their plight to national politics and pledge their support for Bernie Sanders, Trump or someone else as a result.
The truth is more mundane. Many of those involved say the trauma of the closure has been such that they’ve barely thought about its politics. It doesn’t help that Indiana’s primary elections aren’t until 3 May – a date so late that candidates may not bother to campaign there. There is no recent opinion polling from the state.
One worker at the factory, Julie Meadows, says she was already a Trump supporter long before the closure announcement. Chuck Jones, president of the United Steel Workers’ union local that covers the plant, has been a supporter of Sanders – and his opposition to free trade – for decades.
But there’s equally no mistaking the sense of alienation that people in Indiana feel as globalisation’s latest wave sweeps away benefits on which they’ve come to depend, affordable access to medicine and the possibility of a decent pension. The workers express particular bafflement that the decision was made not because United Technologies is losing money but because the company – which announced $7.61bn net income and $56.1bn sales for 2015 – feels under pressure to make itself more profitable.
Few people in Indianapolis are currently expressing that sentiment in explicitly political terms. But, standing in Hot Stylz listening to the barbers and their customers, their fear and frustration feel like the fuel driving this US election year’s populist bandwagons.
Donny Clipperz says that, as an independent contractor working with large sums of cash, he is most concerned at the potential for the Carrier closure to drive up the crime rate.
“I guess they don’t care about that,” he says.
Robert Wright is the Financial Times’ US Industry Correspondent
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