Plant Shutdown Teaches Town Painful Lesson in New Economics

Addie Brown, like America, had it made.

A hard-working husband. A nice little hometown. Her own job, $8.50 an hour, with Kingstree’s biggest employer, Baxter Healthcare. “I thought I was set,” she said.

Then came her lesson in the new economics: Baxter closed the South Carolina plant, laid off 800 workers and moved production to far-off Malaysia, where young women turn out the same Baxter latex gloves for barely $8 a day.

And Addie Brown, like thousands of other American workers in the 1990s, wound up a loser in a global race to the bottom line.

Not long after Baxter shut down in November, billboards sprang up in Iowa with a new campaign cry: “Bring the jobs home!” Patrick J. Buchanan’s presidential candidacy faded by winter’s end, but his slogan will live on through more seasons of discontent as workers in the United States and other industrial countries watch more jobs disappear.

In Washington, where some in Congress want laws to pressure multinational companies to “stay home,” Labor Secretary Robert B. Reich dismisses the sloganeering.

“It is a myth that international trade has robbed America of its manufacturing industries,” he says.

Myth? “What he needs to do is come to Williamsburg County,” advises Kingstree Mayor Russell Kellahan.

Economists line up with Reich. Jobs are not a zero-sum game in which one side has to lose, they say. Developing countries that win jobs and prosper will buy products--and create jobs--in the industrial world. Besides, they say, labor-saving technology is probably killing more U.S. jobs than the “export” of work to low-wage countries.

And yet, they acknowledge, something very new is going on out there in the dog-eat-dog world, where suddenly all the dogs are capitalist dogs.

“These are revolutionary times in the global economy,” concludes a World Bank report on how a transformed world is affecting ordinary workers.

International trade barriers have dropped. Capital, manufacturing technology, expert managers flow freely across borders. Transportation and communication grow cheaper by the day. Perhaps most significantly, half the global work force--China, India, the former Soviet bloc--is suddenly entering the free market.

Hard-pressed companies in a worldwide market will spot more and more opportunity in wage costs--50 cents an hour in China, for example, against an average $18 in the industrialized nations.

Klaus Schwab believes in the “win-win” creed of free trade. But the German economist, leader of the annual World Economic Forum, foresees 20 or 30 years of difficult adjustment, as multinational companies thrive on high-tech, high-productivity but low-wage operations in developing countries.

While those countries catch up on income, Schwab said in Geneva, millions of workers in today’s industrial nations will “stagnate . . . will be the losers.”

Once they were winners in Kingstree.

Illinois-based Baxter Healthcare established the latex-glove factory among the cotton farms and weathered mansions of east South Carolina because it was where to go for low wages in the 1960s. By the late 1980s, however, Baxter’s horizons had widened, and it was building the world’s biggest such plant in Penang, Malaysia--closer to that country’s rubber plantations and inexpensive labor.

“Our challenge is to be a global competitor,” said Bill Saxelby, who heads Baxter’s glove business. “To be competitive in the health care marketplace, in or out of the U.S., you have to be a low-cost leader.”

The medical products giant is clearly a global competitor, a $10-billion-a-year company that now sells more of its examination and surgeon’s gloves abroad than in the United States.

The Baxter shutdown in Kingstree was just a ripple in a wave of American “downsizing” in which manufacturing has shrunk to 18% of U.S. economic output--while rising to above 20% of total Third World production.

For Williamsburg County, however, the ripple was a disaster.

A local Tupperware plant had already begun laying off 550 workers, and Oxford Industries had recently shut down a garment factory and moved the jobs to Mexico. The countywide unemployment rate now tops 14%.

“I went out looking for work, and it was horrible,” said Brown, 30. “There was nothing out there.”

That’s when she and more than 200 other ex-Baxter employees, with federal financial help, signed up for vocational training at Williamsburg Technical College. Brown is studying word processing, and others are enrolled in courses ranging from floral design to industrial electronics.

Smart move, Reich says.

“Business tells me they can’t find enough people with the necessary skills,” the labor secretary said in his Washington office.

“Our challenge is to make sure that people are prepared to participate in our new technologically driven global economy.”

But where are the technologically driven jobs?

Kenneth Gardner, the local schools superintendent, said his friends at Baxter have taken jobs as janitors or textile workers, at less pay than they made before.

He is trying to prepare Kingstree high schoolers for the job market, “but I need high-tech industry. I’ll train them. But if there are no jobs, how long will they listen to me?” Gardner asked.

Norman Scott, Williamsburg Tech’s president, said he hopes that improved local skills will attract new industry to the area, but he acknowledged, “It’s something of a chicken-and-egg problem.”

Meanwhile, waiting for eggs to hatch, ex-Baxter employees can’t help wondering.

“What we’d like to know,” said Brown’s friend Carrie Riggins, “is whether they’re doing a better job in Malaysia than we did.”

Over in Penang, the American boss won’t get into that. But he does say of his Malaysian workers: “They’re ‘hungrier.’ ”