GETTING LEFT BEHIND
Foxconn’s promised jobs boom could miss neighboring city Racine
RACINE – If it fulfills its pledges, Foxconn Technology Group is destined to shatter job-creation records. Its flat-screen manufacturing campus in southeastern Wisconsin could eclipse Boeing’s footprint in Seattle, Tesla’s in Nevada and some of the biggest factories in China. Fully built out, it would be three times the size of the Pentagon, the world’s largest office building.
And yet, despite its multibillion-dollar taxpayer subsidy, Foxconn’s jobs boom might ripple right past Wisconsin’s fifth-largest city, five miles east on Highway 11.
Once a titan of manufacturing, Racine’s identity has been largely erased in the digital age. Its industrial heyday now an echo, the city has been impervious to decades of jobs programs, wars on poverty, upswings in the national economy and the consistent philanthropy of local industrial champion S.C. Johnson & Son.
The lakefront city needs to urgently overhaul its job training and social agencies to reverse
generations of poverty and dysfunction and to accomplish the urban turnaround that has eluded Racine in the past, according to Racine social agencies, businesses and civic leaders.
The clock is ticking. Foxconn could prove to be a one-time window of opportunity, with hiring in two years — even sooner for the construction work to build the facilities.
“If we continue to do business as we have, we know we will fail,” said Kerry Milkie, a veteran in the Racine County Human Services Department.
There’s one thing working in the city’s favor: A new generation of public health researchers has identified the reasons people can’t seem to cycle out of poverty.
They aren’t related to economics or race but instead amount to a neurological phenomenon: an epidemic of childhood trauma.
Racine is a hotbed of it.
Its urban population shows levels of childhood abuse, maltreatment and emotional neglect far above state and national levels — even higher than in Milwaukee, one of the nation’s poorest big cities, where 50 years of effort and untold tens of millions of dollars have failed to arrest the city’s downward spiral.
The same school of researchers, citing studies validated around the world, show that traumatic experiences before age 18 leave invisible lifelong scars, similar to those borne by soldiers returning from front-line combat.
Many children raised in chaotic environments cannot sleep or focus in school. Many struggle with depression, chronic anxieties and cold sweats.
They have trouble communicating with teachers and supervisors, and working collaboratively in a team. Emotional regulation and trust in others don’t come naturally.
What’s more, chronic stress undermines the human immune system, leading to physical as well as mental illness, the evidence shows. Incarceration rates are high.
Not surprisingly, many struggle to find a job and hold it.
Worse yet, many then repeat the cycle with their own children, ultimately creating a widening population of struggling adults and a debilitated workforce.
That’s why the promise of Foxconn is so daunting. Successfully address trauma, and there is some hope, these researchers say; focus solely on job openings, and the prospects are dim.
“It’s not just about access to employment,” said Dimitri Topitzes, a trauma researcher at the University of Wisconsin-Milwaukee.
Jobs not enough
Trauma studies conducted around the world over the last 10 years — in nations torn by war and economic collapse — show that new jobs, stimulus programs and job training don’t help hightrauma individuals or neighborhoods. Not by themselves.
The trauma epidemic is so widespread in cities like Milwaukee and Racine that mental health, alcohol and drug treatment should be as standard in job training programs as trade skills training, Topitzes said. The UWM researcher and his team have been recruited by Racine to conduct trauma screenings, expanding research they had been doing in Milwaukee.
The new findings challenge decades of conventional wisdom.
“The large public narrative is: ‘What we lack is jobs, good jobs,’” said Jeff Neubauer, a fourth-generation Racine resident who’s been active in state politics and local business. But Neubauer, a former state legislator, no longer believes that. “We have a labor market that’s not functioning.”
Neubauer’s family ran a warehouse business in Racine, where it struggled to fill low-skill job vacancies. The warehouse, surrounded by high unemployment, offered Teamster union wages, generous health benefits and a retirement package.
“We preferred people who graduated from high school but that’s not a requirement,” said Neubauer, whose family recently sold the business.
The most recent opening occurred when a worker from the city — “recommended by a local pastor,” Neubauer said — abruptly quit and walked out after just a month.
The position remained vacant for an extended period, despite local recruiting efforts and the area’s chronic unemployment. Finally, someone was hired, but from outside the city.
Asked if Foxconn will create a rising tide that lifts all boats, Neubauer didn’t hesitate: “It’s not true.”
Foxconn might only be a few farm fields and filling stations away from the aging urban center, Neubauer said, “but it might as well be 100 miles away.”
Trauma measurement
Until only recently, civilian trauma had been statistically invisible. Now that empirical metrics exist to measure it, however, it’s proving to be staggeringly toxic and widespread.
For example, researchers at Emory University in Atlanta, working with local hospitals, estimated that a diagnosis of post-traumatic stress disorder would apply to 46% of low-income Atlanta residents.
The most common metric for civilian trauma is the adverse childhood experience survey.
The ACE test, as it’s known, consists of simple yes-or-no questions:
When you were growing up, did a parent or adult in the house beat you? Beat each other?
Did any of them sexually abuse you? Emotionally ignore you?
Were any of them alcoholics? Drug users? Incarcerated? Mentally ill?
The State of Wisconsin has carried out multiple statewide ACE surveys, more than any other state. Results are universally consistent and predictive: Compared to someone with zero “yes” answers, a person with four or more is about six times more likely to struggle with depression; seven times more likely to become alcoholic; and 12 times more likely to attempt suicide. They’re twice as likely to have heart disease, twice as likely to be diagnosed with cancer.
In a hybrid of economics and brain science, ACE scores also amount to a new metric of social distress. They always spike amid economic shock and chronic uncertainty — anything from a farm foreclosure in rural Wisconsin to a suburban layoff for an alcoholic breadwinner.
At the request of the Milwaukee Journal Sentinel, the leading ACE researchers at UW-Madison aggregated five years of statewide data, from 2011 through 2015, and broke out results for the four ZIP codes that cover the City of Racine.
The four main ZIP codes encompass the urban center but also reach well into the suburbs, including the affluent lakefront Village of Wind Point, home of the Frank Lloyd Wright-designed Wingspread campus for the Johnson Foundation.
Within the four-ZIP code population, only one person tested in three (34%) admitted to zero ACE indicators, below the state average of 43%. The estimated share in the high-risk category of fourplus ACEs hit 24% — well above the statewide average of 14%.
Economic trauma zones are hardly limited to Racine. In a special report last year, “A Time to Heal,” the Journal Sentinel examined a vast sprawl of Milwaukee neighborhoods where four-plus ACE scores are the norm.
The series also documented the same demographics of dysfunction in rural Wisconsin towns with languid economies, meaning Foxconn’s opportunities potentially will bypass broad swaths of small-town Wisconsin.
Nevertheless, Racine stands out in its extremes.
At 24%, Racine’s share of the fourplus ACE population exceeds the 20% score in Milwaukee.
Topitzes oversaw his own ACE sur-
vey of 215 lower-income Racine women. They all recently gave birth and received a home visit by social workers, who conducted the survey amid their routine services.
Of that group, 38% fell into the fourplus category, nearly three times the state average. One in three had an incarcerated adult in the family. More than one in three experienced domestic violence growing up.
Racine’s extremes aren’t as well known as Milwaukee’s or Detroit’s. With a population of 78,000, Racine doesn’t land in the top 50 largest cities in the nation, so it often flies under the radar.
Trauma metrics also are new. In Madison, the Wisconsin Department of Workforce Development has begun training staff on ACE tests and trauma-informed care, said BJ Dernbach, assistant deputy secretary at the state agency.
“A lot of our focus is to introduce the concept to our staff, to tell them what ACEs are,” Dernbach said.
‘Preoccupied with survival’
Racine’s economic history is etched in shuttered factories and once-stately churches, now abandoned. Empty storefronts abound. Despite high demand, local hospitals have all but phased out psychiatric care services, which are reimbursed at rates below other medical services.
Racine’s rates of unemployment, high school dropouts, single mothers and average income all are worse than Milwaukee’s and they’re on a par with Detroit, according to U.S. Census Bureau data.
Of Wisconsin’s 32 largest towns and cities, including Milwaukee, Racine consistently had the highest unemployment rate in a nearly unbroken string over a quarter-century, according to the U.S. Bureau of Labor Statistics.
“We’ve been at this place for 26 years,” Neubauer said. “If this was going to solve itself, it would be fixed by now.”
Trying to learn why Racine’s unemployment is so persistent and severe, Norman Cloutier, an economics professor at UW-Parkside, studied 676 cities across the nation, breaking them down by 14 different variables.
Cities with Racine’s unemployment extremes, he found, share two other attributes as well: high numbers of single mothers and low educational attainment.
Last year, so many children in the city of Racine deemed unsafe or neglected were taken from their biological parents that the county’s total doubled from 267 at the start of 2017 to 528 at the end of the year, hitting a new record.
Further, as of 2015, nearly one in five adults (19.1%) in the city of Racine, age 25 or older, never finished high school, which works out to 8,300 city residents. That’s a higher percentage than Milwaukee (17.9%) and approaches Detroit (21.8%), according to Cloutier.
To trauma-trained social workers, those factors are interrelated and selfreinforcing.
High-trauma households mean kids need to keep appointments with judges, therapists, doctors, police or school administrators. Single mothers, themselves often from dysfunctional homes, are forced to chose between going to work or helping their child on short notice.
After a few absences, those mothers lose their jobs, adding to the family’s stress and chaos, said Melanie Heindl, a trauma-trained social worker from Milwaukee recently recruited to Racine.
“The tricky part of therapy is that it’s of no value to someone preoccupied with survival or paying rent,” Heindl said.
That’s not the workforce Foxconn wants to hire.
Enter Foxconn
Foxconn, the world’s biggest manufacturer of consumer electronics, is best known for low-wage production sites spread over 12 major manufacturing centers in China, which build iPhones, touch-screen tablets, laptops and other electronics under other brand names.
The Asian newcomer will rely on advanced automation, robots and artificial intelligence in order to lower costs and compete with overseas rivals. That requires high-skilled digitally savvy workers.
Foxconn ranks as “the largest corporate attraction project in U.S. history as measured by jobs,” according to the Wisconsin Economic Development Corp.
In Wisconsin, phased-in employment could reach 13,000 new jobs. Yearly wages will average $54,000. Workers are expected to be drawn from a 70-mile radius reaching from Chicago to Madison.
Foxconn’s proposed facility will sprawl off I-94, the Milwaukee-Chicago corridor that’s attracted most of the state’s recent investment. The interstate now is booming with automated warehouses, including Amazon’s robotfilled mega-warehouse.
Foxconn’s promised job bonanza is on a par with the prosperity in Racine decades ago.
In its golden age, Racine was a jobs machine that supported a wide middle class with health benefits, paid vacations and college tuitions.
Like Detroit, it was a pioneer in the American auto industry under the longdefunct Nash and Pierce roadsters.
Nothing defined the city in its heyday like J.I. Case Co., the region’s biggest employer in the last century.
The tractor and machinery maker employed 5,600 at its peak, including 3,700 production workers and skilled tradesmen represented by United Auto Workers. Case operated five local industrial campuses.
Today, the renamed CNH-Global is headquartered in London; it shuttered four of the five production sites in Racine and now employs 400 hourly production workers in and around the city, the UAW said.
Other Racine industries commonly employed 1,000 or 2,000 at a time.
Hamilton Beach built the first electric blender, having invented the first practical electric motor that could be used in a slew of compact appliances.
Down the street was Western Publishing, where more than 2,000 workers not only wrote and edited the long-enduring line of “Little Golden Books” — but printed, bound and shipped them as well.
Today, Hamilton Beach, Western Publishing and other iconic names have moved out of Racine or no longer exist: Walker Manufacturing — gone; Young Radiator Co. — gone; Racine Steel Casings — gone.
Another behemoth that vanished was the old Massey Ferguson works, where over 2,200 workers built tanks in wartime and farm tractors in peacetime. Today, its sprawl of factories house a juvenile detention center, a large food bank and the county’s largest homeless shelter, which has been filled beyond capacity this winter.
The old Massey Ferguson also houses the main social service agencies for the county, as well as the main job training agency.
From her third-floor office, Milkie concedes those entities need a radical overhaul. Otherwise, she said, “nothing will change.”
It took years just to come to that realization, Milkie said. That’s because county social workers have been sabotaging themselves.
For decades, the same agencies operated in silos, seldom sharing data, staff or case files.
They had no clue that the same families cycling in and out of juvenile justice also are being processed separately in child welfare, foster programs, mental health and job training.
“We got to the point of saying to ourselves, ‘God, are we stupid,’” Milkie said, since no one was dealing with the families’ core problems.
Under its new ambitions, all the agencies are meant to work in concert: identify families that repeatedly show up in multiple agencies, who are most stuck in unemployment, and then configure trauma-informed services that are more comprehensive — one individual at a time, one family at a time.
Solutions are never as simple as cookie-cutter jobs programs, said Mark Mundl, manager of the Workforce Solutions division, the job training agency.
Mundl uses the example of the nation’s heroin epidemic, which trauma researchers closely correlate to high-adversity childhoods.
“How do we get the heroin addict into recovery? And then stay in recovery? And then look at their job skills and how do we train them? And how do we keep them sober as they maintain employment?” Mundl said.
Racine County has hired Neubauer to help orchestrate a wholesale restructuring of the human services and job training efforts.
Plans are far-reaching but initial steps include training sessions to sensitize county workers to the needs of a highly-traumatized population. The first agency in line for “trauma-informed training” is Racine’s main job placement agency.
With or without a reform in Racine, Foxconn will shake up the regional economy.
It is expected to poach skilled workers from incumbent manufacturers that have survived in the region — Modine Manufacturing Co., Twin Disc Inc., InSinkErator (inventor of the garbage disposal) and S.C. Johnson.
That should create new openings at the existing employers for those ready to step in and be trained. New tiers of low-end service jobs would emerge to cater to the newly employed workers as they spend more on groceries, gas and so on.
Somewhere amid all that disruption lies a chance to test new approaches to job training.
Employers within Racine will need to hire hundreds of unemployed people merely to match the state’s unemployment rate. In his memos, Neubauer calls it the “big hairy audacious goal.”
“Foxconn is not a solution,” Neubauer said. “Foxconn is a catalyst.”