28 March, 2016

The Planned Dependent Community

"Walmart didn’t kill the once-vibrant cluster of shops next to a railroad and a creek in the faded old coal town of Kimball, W. Va. — the disappearance of the mines had pretty well taken care of that already. But now that Walmart’s leaving, too, as one of 154 U.S. stores the company closed in January, the town might be snuffed out for good."

This quote is from a Washington Post article on the circumstances some small towns were facing when Walmart recently decided to close 269 stores and lay off more than 16,000 employees. This prompted one reader of ours to ask how we can reach these types of communities. How can we present the idea of distributism to the people living in these situations as solution to their economic problems?

Kimball is representative of communities that are completely dependent by design. Early examples of this would be the "company towns" established by large-scale industries like mining companies. These were in many ways closed communities where one company owned the land, the stores, the banks, all of the jobs and, because the workers frequently had to go into debt to the company before getting their first paychecks, the company also effectively owned the employees. Tennessee Ernie Ford's song, Sixteen Tons, portrays the people in this situation - at least while the company kept that operation going. Kimball was described as a community with a vibrant cluster of shops, but that vibrancy was apparently dependent on the continued operation of one industry.

The failure of communities which were built to be dependent on one major industry, or even a few of them, provides valuable lessons for other communities in similar situations. Even in major metropolitan areas, the presence of one or more huge employers creates a situation of significant economic dependence which translates to significant political power for the employers. Examples of this abound in those cases where a major manufacturer has considered moving operations out of a community and the officers of the state, and sometimes even the federal, government rush in to make special deals not available to ordinary citizens or smaller businesses. This occurs because these employers know that closing operations where they employ thousands of workers would be economically and politically devastating. One only has to look at where large employers have closed down. Chris Arnade expressed it perfectly in a recent article for The Guaridan,
"To say that 'nothing happened to them' is stunningly wrong. Over the past 35 years the working class has been devalued, the result of an economic version of the Hunger Games. It has pitted everyone against each other, regardless of where they started. Some contestants, such as business owners, were equipped with the fanciest weapons. The working class only had their hands. They lost and have been left to deal on their own."
Can what happened to Kimball help us to find ways to make communities less dependent on large employers?

It seems that many communities with large employers operate as though those jobs will always be there. While predicting the closure of a large employer is never certain, it is more so in the case of Kimball. Coal is a finite resource. Even if that's not the reason the mine closed, it eventually would be. It is reasonable that a community whose economy is currently dependent on a finite resource should consider what will happen when that resource is no longer available. The mine would close some day. Even if that day is expected to be long in the future, wouldn't it be wise for such communities to promote the development of local business so that they are not dependent on the continued existence of the large employer? Is it possible for other businesses to plan their operation and growth under the assumption that the income they get from the large employer or its employees will be considered "extra profit" rather than necessary for continued operation? If your business is completely dependent on continued business from one employer, then you are at the mercy of that employer's decisions for your livelihood.

While contingency planning of other local businesses is a very important step for setting up a community to at least survive the loss of a large employer, it does not address the most economically devastating aspect of such a loss. How does such a community deal with the sudden unemployment of such a large percentage of its population? What is needed to minimize the impact of such an event and what is the best way to provide for that need?

While programs to help finding new jobs for these families, and the training that might be necessary for it, are essential, the reality is that there won't be enough jobs available within the community. Even if the community tries to mitigate the impact by encouraging as many additional local businesses as possible, even if the other businesses actually budgeted their operation so that they could continue to run without having the large business or its employees as customers, it is unlikely that they will be in a position to hire additional staff when they have just taken a cut to their total income. Since, in reality, other businesses seem to operate under the assumption that they will always have the income from the big company and its employees, other local businesses will be looking at laying off staff as a necessary step to staying open. This "ripple effect" of the loss of a large employer is a very real impact that cannot be ignored. The economic impact of a large employer closing in an area is never limited to its own employees, and often expands to surrounding communities as well. The question I would address to the other businesses that operate in the area of a large employer is whether or not it is good business practice to invest in programs that ultimately could help your business make it through such an economic crisis. The decision seems to be, invest in programs to retrain the employees of the big company, to help them with job placement, and to support them through the process, or prepare to close your doors. Helping to provide job training and placement, and supporting programs that offer financial assistance to the unemployed and start-up loans for new businesses to employ them may be the best hope for other businesses to survive the closure of a large employer. We also have to remember that such programs will also work best if planned out ahead of time so that things will already be in place when they are needed.

What would be the ideal approach from a distributist perspective? Under distributism, the mining operation would most likely have been a worker-owned cooperative. I don't pretend to know the details of what happened with the mine workers in Kimball's case, but I think it reasonable to think that, had the operation been a worker-owned cooperative, more of the company's profits and resources would have been used to provide much of what I have outlined above. If the workers owned the business and its profits, it is reasonable to believe they would use them to prepare for how they would continue to live and work as they faced the prospect of the mine closing. Profits could have been directed to provide job training, job placement, business loans and at least some unemployment support. Churches and charitable organizations would be able to provide some additional help, which would minimize the amount of support needed from local and other government agencies.

I don't pretend that this would eliminate all difficulties from the closure of such a large employer. Such programs would require just as much forethought and planning under distributism as under capitalism. However, the fact that the worker-owners of a cooperative have the profits and capital at their disposal would make a big difference. Even if they simply sold what they could and divided the money among themselves, they would each have had more they could use to move on to other employment. It seems to me that this would be at least a little less devastating to a community that what has historically happened under capitalism.

Returning to the question of our reader, how do we reach out to these communities? Achieving what is necessary for a community to survive this type of scenario involves and adjustment in the current prevailing view of the relationship between employers and employees, between business and other businesses, between businesses and the communities in which they operate, and ultimately in the priorities we assign to immediate personal or corporate profit versus our responsibilities to our fellow man and considerations of how we continue to stay in business for the long haul. We need to do what we can so spread the idea that there really is a better way than what the capitalists and socialists propose. We need to explain how our political divide between "conservatives" and "liberals" actually helps to perpetuate the economic problems in our society because neither of them address the real problem. We need to help people see that what is typically called our free market is, in many ways, not truly free. Most of all, to the extent we can, we need to practice what we preach in our society as it exists today. This especially applies to what we say about social responsibility. If we are not willing to exercise solidarity when we have the chance, how can we expect others to accept what we say about it?

Title Photo by Magnolia677, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

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