No, <i>Wall Street Journal</i>, Chinese Imports Didn’t Kill My Hometown

No, Wall Street Journal, Chinese Imports Didn’t Kill My Hometown

My hometown of Hickory, North Carolina is actually a great example of the American economy’s resilience—not despite trade, but in concert with it.
Eric Cunningham

Like many small towns in North Carolina, my hometown of Hickory is fairly unassuming. Easy to miss between the boom town of Charlotte and the beautiful Appalachian mountains, our claim to fame is being the birthplace of NASCAR champion Dale Jarrett.

So imagine my surprise when Hickory was front page in the Wall Street Journal, in a story presenting a grim view of Hickory and Catawba County—a furniture hub supposedly destroyed by free trade, littered with abandoned mills, and plagued by sky-high unemployment. In their words, Hickory is experiencing “devastation” and, as with many other places in America, China is to blame. If America never began to trade more freely with them, the authors imply, Hickory and other U.S. “mill towns” would be thriving.

We’ve been hearing this story a lot lately, from politicians like Donald Trump and the pundits paid to explain his inexplicable rise. But that doesn’t make the story true, and certainly not complete. In fact, contrary to the Journal, my hometown of Hickory is actually a great example of the American economy’s resilience, adaptation, and success—not despite trade, but in concert with it.

To be fair, the article’s authors (Bob Davis and Jon Hilsenrath) get some things right: the Hickory furniture industry is not nearly as strong as it was, and import competition certainly played a part in that decline. At one point, nearly 60 percent of the nation’s furniture was manufactured in North Carolina and Virginia, and Hickory was the center of the industry.

As with most booms, however, the furniture boom ultimately slowed, and the recession hit Hickory particularly hard. Our unemployment rate peaked at nearly 16 percent in April 2009. The weakened furniture industry has left many disillusioned with trade and Republican leaders, helping Trump win 44 percent of the primary vote in Catawba County, outperforming his statewide performance by nearly four percentage points in a county that hasn’t voted for a Democratic presidential candidate since 1944.

But that’s only one side of the story—the depressing, scary side. Practically ignored by the Journal was what has helped the area recover (technology) and the chief culprit of manufacturing losses here (increased productivity). True, Hickory isn’t the furniture hub it once was. But Hickory isn’t “Fishtown,” either. Our story isn’t over; in fact, it’s just beginning.

Hickory Is Reinventing Itself

At the height of Hickory’s furniture boom in the 1990s, another boom was beginning: technology. The rising popularity of the Internet led to rising demand for access. Even as the dot-com bubble imploded, telecommunications kept flourishing, and Hickory had become a hub for it. By 2000, Hickory produced 40 percent of fiber-optic cable in the world. Rather than being content with furniture and textiles, the region had—wisely, in retrospect—expanded its reach and diversified into fiber optics.

Today, two multinational fiber-optic cable corporations, both reliant on trade and globalization,  call Hickory their home: CommScope and Corning Optical Communications. Although Corning is set to move its headquarters to a new building in Charlotte, this won’t affect the hundreds of jobs at their manufacturing plant.

This sort of capital-intensive manufacturing produced safer, higher-skill, and higher-pay jobs than the ones in the furniture industry. Crippling hand injuries from furniture machines were not uncommon in my hometown, and they didn’t just cause short-term job loss but also led to a long-term inability to find work in other fields.

Statewide, North Carolina is now far more insulated from “shocks” today because it’s also more diversified. According to Bryan Riley at the Heritage Foundation, for example, while North Carolina’s overall manufacturing gross domestic product rose by nearly $10 billion from 2000 to 2009, textiles, apparel, and furniture dropped from just over $10 billion to $5 billion. In fact, the U.S. Bureau of Economic Analysis estimates that my state’s manufacturing output rose from about $63.5 billion in 1997 to more than $100 billion in 2015, with top industries no longer being textiles or furniture, but computers, chemicals, and food products.

But even our “old” industries aren’t dead: Riley notes that “from 1999 to 2007, before the global economic downturn, exports of North Carolina textiles, apparel, and furniture increased by 25.5 percent. By 2009, exports of North Carolina textiles, apparel, and furniture totaled $2 billion. In fact, after adjusting for inflation, output per worker in North Carolina’s textile and apparel industries increased by more than 60 percent between 2000 and 2009.” Fewer workers, more output, and higher pay—that’s productivity in action.

Manufacturing Is Doing Well, Too

Meanwhile, North Carolina furniture manufacturers have transitioned into custom, high-end products—just the type of things you’d expect to be made in the wealthy and developed U.S. economy. Also, as is often the case with protectionism, efforts to insulate the industry from low-end import competition just didn’t work.

Certainly, manufacturing jobs have declined here (as they have nationally and around the world), but the state’s unemployment rate is now at or below the national average and our labor force participation has bucked the national trend by actually adding 100,000 workers in the last year. Remarkably, the Hickory region now boasts a 4.6 percent unemployment rate—lower than the state unemployment rate of 4.9 percent and lower than in some of the state’s larger cities like Fayetteville and Greensboro.

These trends in some ways reflect manufacturing productivity across America: a recent study by Ball State University, for example, found that national manufacturing output between 1990 and 2013 rose by nearly $1 trillion, while nearly 90 percent of lost manufacturing jobs from 2000-2010 were caused not by trade, but by productivity gains. In other words: American manufacturers can produce more but with fewer workers, and a job that today requires only one worker might once have required five. Meanwhile, outside of manufacturing, the country has gained tens of millions of jobs over the same period. The Journal, for some reason, ignores all of this.

The Wheel of Infrastructure Turns

Back here in Catawba County, the region’s reputation as a technological hub has led to interest from other tech companies in the other side of telecommunications: data storage. At the height of the recession in 2009, Maiden, a tiny town in Catawba County with approximately 3,300 residents, became host to a massive data center for Apple. Apple has invested nearly $500 million into this center and continues to expand it.

In fact, they’ve added multiple solar farms in the surrounding area. Beyond just the economic benefits, these centers have contributed hundreds of thousands of dollars to scholarships and education for local students. While the folks the Journal interviewed blamed corporations for furniture industry losses, large companies like CommScope, Corning, and Apple have in fact propped up the economy and helped students learn useful skills at Catawba Valley Community College—where I earned my associate’s degree.

What about those old mills? Believe it or not, even the empty, dilapidated buildings here—the type routinely shown in the media to evince the “devastation” of trade—are adjusting. Mills in Hickory are being repurposed to serve new businesses and find new customers.

Lyerly Full Fashioned Mill in downtown Hickory, listed in the National Register of Historic Places, has been repurposed into a corporate headquarters for Transportation Insight, a global logistics company that specializes in supply chain management. You couldn’t ask for a better example of economic dynamism at work. Other mills throughout the city have become mini malls, yogurt shops, or gyms. While not all of these buildings can or will be restored, the image of Hickory as a decaying mill town simply isn’t true.

We Should All Thank Freer Markets

To be sure, free trade shouldn’t get credit for most, or even much, of this revival, but freer markets sure do. In 2012, for example, North Carolina Republicans, led by former Charlotte mayor (now governor) Pat McCrory, gained control of state government for the first time in more than 100 years. Despite the doom and gloom stories in the national media over social issues like House Bill 2 regarding transgender bathroom arrangements, state Republicans have done an impressive job undoing 100 years of Democratic regulations and replacing them with Reagan-style supply-side economics.

Such successes show what can happen when politicians stop blaming foreigners for our problems and start looking in the mirror for answers.

From the first quarter of 2013 to the third quarter of 2015, no state experienced greater GDP growth than North Carolina’s of 13.4 percent. Personal and corporate taxes, once among the highest in the region, have been slashed, and overall tax revenue has increased, to the bewilderment of state liberals. In contrast to the anemic years under one-term Democratic governor Bev Perdue, where deficits reached into the billions, the state government now has a consistent surplus, allowing for further tax cuts and raises for teachers and other state employees.

By making it competitive to do business in North Carolina again, the government has undone much of the recession’s damage and has us poised for a better future. Such successes show what can happen when politicians stop blaming foreigners for our problems and start looking in the mirror for answers.

Far from being a sob story about the loss of manufacturing, Hickory is doing what so many other manufacturing hubs refuse to do: adjust. While many people are still hurting from the loss of furniture—I’ve seen them and know how many people still rely on government assistance—the state is laying a solid, modern groundwork for growth.

It should be abundantly clear that free trade isn’t the problem in Hickory. China is not to blame for most job losses; market changes are. It also doesn’t hurt that state government is actively working to lower barriers for businesses and encourage growth. The Journal story, like so many others, ignores this side of America’s story, and in the process sows greater public fear about trade—fear unprincipled politicians seize to get votes and impose harmful protectionism or other anti-market policies that will hurt lower- and middle-class Americans most.

Hickory isn’t Fishtown—it isn’t dying, and isn’t dead. Unlike so many other towns, with no way or will to change, we have a future. It’s one I’m glad to be a part of. It’d be nice if someone reported on that for a change.

Scott Lincicome contributed to this article.

Eric Cunningham is a lifelong resident of Catawba County, North Carolina. He is attending Appalachian State University for a degree in Journalism. You can follow Eric on Twitter @decunningham2.
Photo Eric Cunningham / The Federalist

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