When Blue-Collar Jobs Disappear, White-Collar Workers Leave

Some places are losing more lawyers and accountants than factory workers.
by | May 2018
Erie, Pa., has not only lost factory workers, but also lawyers, engineers and accountants. (AP)

It’s a sad but familiar story. A plant closes, and dozens or hundreds or thousands of decently paid factory workers lose their jobs. Unable to find work that compensates them nearly as well, they have little choice but to accept low-wage employment in retail or restaurants.

What’s less familiar is that under such scenarios factory towns lose sizable chunks of their white-collar workforce as well. Consider Erie, Pa., which in recent years has experienced shutdowns at General Electric and Hammermill facilities, among others. Over the past decade, Erie has lost 8 percent of its accountants, 20 percent of its lawyers and 40 percent of its engineers, according to the Associated Press. Similar stories can be told about Sheboygan, Wis., Decatur, Ill., and Wichita, Kan. All told, a third of the nation’s major metropolitan areas are now losing more white-collar jobs than blue-collar ones.

Unlike many of the former factory workers, members of the professional class have options. They can pick up and move. John Dombrowski is an engineer who started a firm in Erie that moved across the border into Ohio. There was no advantage to being in Erie, he says. Local customers either wanted a cheap rate or preferred hiring out-of-town firms. What’s more, there’s not enough happening in Erie to keep engineering talent in town. “From the standpoint of trying to attract people to Erie, it was difficult,” says Dombrowski, who now works for a national firm. “There were more leaving town as they graduated.”

The attractions of bigger cities, which include cultural amenities and better-paying jobs, can be hard for professionals to resist once an anchor employer shuts down. Newton, Iowa, is an example. Newton has made a pretty good comeback since Maytag closed its headquarters and manufacturing plant there. A dozen new firms have helped create 2,000 jobs, more than Maytag employed at the time it shut its doors. The unemployment rate is at a low 3 percent and companies are having a hard time filling openings.

But most of the newer jobs are blue collar. With the state capital of Des Moines and its insurance companies just half an hour away, the professional class in Newton has packed up and left. “We did lose a significant number of white-collar jobs,” says Frank Liebl, executive director of the Newton Development Corporation. “The majority of white-collar workers we had went to work in Des Moines.”