A shrinking middle class

A recession and declining manufacturing jobs chipped away at Springfield's middle class since 2000

By Matt Sanctis
June 5, 2016

Springfield’s middle class has been among the hardest hit in the nation, according to a new study, as high-paying manufacturing jobs became scarce in the past decade.

The city tied Goldsboro, N.C., for the biggest decline in economic status and Springfield sustained the biggest loss in median income since 2000, according to a Pew Research Center study released last month.

A strong middle class is important because it can impact a region’s buying power, affect how businesses view the area and touch everything from schools to what retail is available in a region.

The study showed Springfield is far from the only city that has watched its middle class deteriorate. The study reviewed 229 metro areas across the U.S., and found about nine in 10 saw a decline in the share of adults considered part of the middle class.

Columbus and Cincinnati both saw a decline in middle class families but also growth in both their upper- and lower-income tiers. Most communities in Ohio saw their middle and upper classes shrink or remain flat.

But Springfield has struggled more than most, the study showed.

Local leaders have long known the challenges Springfield faces and said they have taken steps to turn the economy around. But the study is a clear indication there’s still a long way to go.

“You have to know where you’re at in order to get better,” said Mike McDorman, president of the Chamber of Greater Springfield. “The good news is this didn’t surprise us. We knew this a long time ago and we’re ahead of the curve in working on it but we’re still behind in attracting the future talent that’s going to drive us forward. We have to get better at that.”

The Pew study showed a common trend among the top 10 metro areas with the greatest loss in economic status — a greater than average reliance on manufacturing. Other communities with big declines included Mansfield, Ohio; Fort Wayne, Ind.; and Detroit.

“We’re an example of a trend that’s very broad,” Springfield Mayor Warren Copeland said. “But it doesn’t feel very good to be the prime example.”

Manufacturing losses

The Pew study defined middle class as three-person households with annual incomes from $42,000 to $125,000, adjusted for inflation. Nationally, the study showed the share of middle-income households fell from 55 percent in 2000 to 51 percent in 2014.

Economic status is a measure of the percent of adults considered upper-income, minus the change in how many were considered lower-income during that span. Springfield’s upper-income population fell 5 percent since 2000, while lower-class earners increased 11 percent.

Like many Midwest communities of its size, high-paying manufacturing jobs have cratered here since the 1990s, Copeland said.

Information from the U.S. Bureau of Labor Statistics showed almost 13,000 area workers were employed in manufacturing in the region 16 years ago. By the end of 2015, that figure had been cut roughly in half, to 6,700 manufacturing jobs.

Springfield’s economy has become more diverse over the past decade, which helped stem much of the loss, Copeland said. But in many cases, the new jobs pay less than older manufacturing positions.

The shrinking middle class is closely linked to a decline in median incomes, which fell overall in 190 of the 229 communities reviewed in the Pew report.

In Springfield, median household income plunged 27 percent, the greatest loss cited in the Pew report. It dropped from $73,895 in 1999 to $53,957 in 2014

About 61 percent of Springfield’s population was considered middle-class in 2000, according to the study. By 2014, that percentage fell to 55 percent.

Navistar remains a large employer for example, but played a much larger role in the local economy in decades past, Copeland said. The company still produces about the same number of trucks, he said, but with fewer workers as automation has increased and some work was shipped elsewhere.

“In our case we’ve replaced a significant number of jobs, but a lot of the replacement jobs certainly in the past 20 years have been jobs that pay less,” Copeland said. “An example would be call centers, which pay much less than Navistar jobs paid. So we may have as many jobs, but we have a whole lot of people who are working for less money.”

The local economy has lost a number of manufacturers, said Ross McGregor, a former state representative and owner of Pentaflex, an auto parts maker in Springfield.

“There are obviously lost job opportunities,” he said.

Pentaflex pays more as workers acquire new skills, which McGregor said makes employees more valuable and helps boost them into middle class wages as they move up in the company.

Visible signs show that the region has struggled in recent years, McGregor said. He pointed to recent challenges at the Upper Valley Mall, where two long-time anchors vacated the property that was later sold at an auction for a fraction of its earlier value.

“When I think of what Springfield had to offer in the way of employment and the ability for people to graduate from high school and get a job that would carry them through their life, back in the 1970s and 1980s, it seemed more plentiful,” McGregor said.

Training necessary

Kirby McGillivray, of Springfield, is one of a shrinking number of workers who has seen his fortunes improve in recent years. A 2009 graduate of Kenton Ridge High School, McGillivray had bounced around at a handful of area manufacturing firms while supporting his fiance and three children.

Many of those jobs paid about $10 an hour so to help boost his income, he also sold wooden furniture he crafted in his spare time.

“You never knew how long you were going to work,” McGillivray said of the temporary jobs. “You could be there for a year, a couple months, you never knew.”

He was laid off from a job at Bosca, a leather manufacturer, shortly before Christmas last year. But a friend encouraged him to look into a precision machining program at Opportunities for Individual Change of Clark County, an organization focused on eliminating poverty.

He was initially skeptical because he still had to make a living during the 10-week training program.

“It’s not that long of a commitment, but it seemed like it at the time,” McGillivray said.

But he recently graduated and acquired a job working on a press brake at Valco. The Springfield manufacturer stamps, cuts and welds metal parts for a variety of industries.

The job is more stable, boosted his wages and offered a shift that allows him to spend more time with his family. He said he does think there are opportunities locally, but workers need to seek out training.

Andrew Greenwell, of Springfield, said he’s seen the challenges workers face both locally and elsewhere.

Greenwell graduated with a degree in operations management in 2014 from the University of Cincinnati, and attended a job fair in downtown Springfield late last month.

There are good jobs, he said, but the options are limited. He noted many of the companies represented at the job fair offered service sector or entry-level work.

Greenwell said he’s seen similar issues in places like Utica, N.Y., where he worked in a co-op program while in college.

“It seemed like they don’t have the manufacturing we do,” Greenwell said.

Building the workforce

Rebuilding Clark County’s workforce is the key to attracting and retaining higher-paying jobs that will sustain a strong middle class, Copeland and other local leaders said.

That means making sure students here have the opportunity to go to college. For other workers, it means strengthening workforce training programs that lead to the kinds of higher-skilled jobs manufacturing and other industries increasingly require.

“One solution we work on all the time is bringing more jobs to the community,” Copeland said. “Whenever we do that, we’re trying to look for jobs that pay better, but the reality is what we take what we can get.”

Area schools and other organizations have developed the kinds of programs needed to improve the local workforce, said McDorman, of the chamber.

He pointed to the city’s new Global Impact STEM Academy, a high school that focuses on science, math and engineering programs. Springfield City Schools also now offers an International Baccalaureate, a rigorous international education program.

And Clark State Community College recently used a $2.5 million grant from the U.S. Department of Labor to open a new manufacturing laboratory at its Leffel Lane campus to provide more training opportunities for high-skilled jobs.

Springfield has long relied on manufacturing, and it’s important to make sure those companies can still find the workers they need to be competitive, said McGregor, of Pentaflex. But he said schools and business leaders are taking the right steps to ensure students have the technical skills they’ll increasingly need to earn a comfortable living.

“The middle class now is going to probably have a more technical aspect to it as we move into the future, and I think those opportunities exist in Springfield,” McGregor said.

Rethinking higher education is critical to boosting middle class incomes, Clark State President Jo Alice Blondin said.

While the community lost manufacturing work since 2000, she argued the Pew report didn’t take into account the impact of the Great Recession, or the demand expected in the manufacturing industry as baby boomers retire and and companies try to replace an aging workforce.

“The way I read the report was, we have the opportunity to fill that skills gap that’s looming,” Blondin said. “We can’t sit back and say, ‘Let’s pivot as a community and forget manufacturing.’”

The other challenge is to push local students toward the kinds of jobs that are in demand locally, Blondin said. In past years, there’s been a misalignment between degrees offered and the actual jobs available.

“That question is something that as a community we really need to get serious about and quit giving lip-service to,” Blondin said. “We need to actually get behind a strategy that goes into the schools and shows the value of the careers in our region.”

In the meantime, local officials also need to continue to redevelop downtown Springfield, promote new industrial parks to attract new companies and focus on ways to improve quality of life issues for residents who already live here, McDorman said.

“That strategy will pay dividends long-term, but there’s no short-term fix for what we experienced and what many communities like us have experienced,” McDorman said.