WisBusiness: Layoffs hit small communities hard

By Brian E. Clark

Hundreds of workers in the small Wisconsin towns of Mazomanie, Jackson, Mayville, Fennimore, New Richmond and Chilton have received unwanted holiday presents in recent weeks.

Their gifts were layoff notices, telling them they would be unemployed within 60 days. What happens to those towns and the soon-to-be unemployed workers varies from community to community.

In many cases, workers find new jobs that require them to drive sometimes long distances because they do not want to leave their homes.

The towns’ small businesses are also negatively affected, with fewer and often smaller paychecks rippling through the local economy. While a city of 50,000 might not feel a major jolt from a 400-person layoff, it can be earth-shaking for a community of 2,000.

“Obviously, layoffs hurt,” said Gary Green, a professor of rural sociology at UW-Madison. “The first thing that people do is try to find other jobs. The research shows that a lot of people end up taking positions that pay less than they had. In some cases, other factories come back in over time.”

Green said the most fortunate workers find work close to home and at similar wages.

“If they have spouses with jobs or other attachments to their communities, they will commute if there are jobs within a reasonable distance. It depends on the region, their skills and how its economy is doing,” said Green,who has been studying small Wisconsin towns for 15 years.

“But the closing of a plant can be very hard on a town,” he said, noting that some wither on the vine while others bounce back. “If there is a good workforce, new businesses might move in.”

The most recent major layoff notice came from Sunny Industries, a Mazomanie printer that is in bankruptcy proceedings. It announced it will lay off 380 workers by Feb. 6, if not sooner.

The financial troubles of the company were well known, however, so the news wasn’t entirely unexpected. The company, which has been in Mazomanie for 12 years and prints TV Guides, is being sued for more than $7 million over allegedly unpaid loans used to buy new printing presses.

Still, residents of this Dane County town of 1,200 said they were disappointed.

Kim Haney, whose husband works at Sunny, said she felt especially bad for workers with families. “My heart goes out for other people. It’s a very sad time for this to happen, and right before Christmas.”

Rose Lynch, a spokeswoman for the state Department of Workforce Development (DWD), said her agency has “rapid response” teams it sends to talk to companies that are laying off workers.

“We set up orientation sessions with the employees to talk about unemployment insurance and the re-employment services we can provide,” she explained.

In recent months, she said the DWD has talked to workers from Mayville, where 170 employees were told they will lose their jobs by March 30; in New Holstein, where 450 were laid off from the Tecumseh Power Co. plant in August; and in Pleasant Prairie, where 425 workers were told they would be unemployed as of Feb. from their jobs at Deluxe Media Services.

Pat Schramm, executive director of the Workforce Development Board for South Central Wisconsin, agreed that many workers are reluctant to leave their communities – even if it means long drives.

“A lot of people are anchored in their towns, especially if they went to work right out of high school,” she said. “When the Perry Judd printing plant closed in Waterloo three years ago and laid off 550 workers, many of them took jobs that meant 50-mile drives each way.”

On the other hand, more highly specialized workers might move to another part of the country to find employment. “I think you’d find that to be the case with someone who worked in some areas of the biotech industry,” she said. “It would depend on their level of skill, education and training.

“But if people have houses and children in schools, they may well end up commuting long distances,” she said. “Our state’s economy is doing fairly well overall and even though we have closures and layoffs, we also have new companies coming in. We’re not like Michigan, which has lost whole areas of its manufacturing base and people have moved out of state.”

Kathy Heady, an area development manager for the state Department of Commerce, said she has met with officials of Sunny in Mazomanie in recent months.

“There is a small chance that it might remain open,” she noted. “That would be ideal, though I can’t say something positive will happen.”

Heady said her agency works with companies to mitigate the impacts of layoffs or closings. Commerce also tries to help small towns diversify their economies.

“There is a network of organizations – like the DWD – out there that can help people because they have obligations to meet and bills to be paid,” she said. “We would try to find a potential buyer for a plant.”

In addition, she said, Mazomanie and other affected communities, might be eligible for federal block grants from the Department of Housing and Urban Development. They also might work with Forward Wisconsin – which promotes business opportunities outside the state – to list the site on a building inventory.

“Ultimately, though, Wisconsin is part of a competitive global economy,” said Commerce spokesman Tony Hozeny. And that means layoffs and plant closures will happen, just as new facilities and jobs are added.

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