The Big Squeeze: This election year, it’s all about the money

MIDDLETOWN, CONN. - Two years ago, Judy Konopka and Craig Diangelo lost their jobs in the IT department of what was then known as Northeast Utilities, a regional electricity provider, when the company decided to replace about 220 employees with guest workers from India. In order to receive a more lucrative separation package, they had to train their foreign replacements both here and overseas.

Hillary Clinton greets workers at Munster Steel in Hammond, Indiana, United States, April 26, 2016. REUTERS/Jim Young

Both had trouble finding new work. Konopka, 56, is still looking. Diangelo, 64, is working as a contractor for a company that provides no benefits, making substantially less than he did before. He views himself as a victim of globalization, a casualty of offshoring—and he credits Donald Trump, the presumptive Republican presidential nominee who has cast himself as the champion of displaced and disaffected U.S. workers, for bringing the issue to light.

“I’ll vote for him,” says Diangelo, over dinner at a Thai restaurant on this town’s Main Street. Two others at the table murmur in assent.

He continues, his voice rising: “I wasn’t planning on retiring early. I wasn’t planning on making $35,000 less. I’ve had to cut back a lot. I basically live paycheck to paycheck.”

“I could never vote for Hillary Clinton,” Diangelo says, citing Clinton’s support of the North American Free Trade Agreement, passed while her husband, Bill, was president, as well as her advocacy of the proposed Trans-Pacific Partnership, a trade pact that’s still being negotiated by the Obama administration. (Challenged by Bernie Sanders, Clinton has since retracted her support of TPP.) Even Konopka, who favors Clinton (she calls Trump “the biggest idiot”), has to admit Clinton’s support of trade deals such as NAFTA gives her pause. When Northeast Utilities fired her after 21 years, “I felt betrayed.” Konopka took advantage of a federal trade assistance program to improve her skills in web design, then discovered she couldn’t compete with designers outside the country who were willing to work for much less. Now, to get by, she sells vintage books on the web. “It’s starting to get really scary,” she says.

This presidential election is, purportedly, the Year of the Angry Voter, with images of scuffles at Trump rallies occupying cable-news screens. But as befitting someone who lives in a place called Middletown, Konopka is more typical of voters: consumed by a stomach-churning uncertainty, a vague sense of something lost, and an inescapable belief that an array of powerful forces—corporations, politicians, government—aren’t looking out for them.

Economists and pundits have been struggling to explain why, with unemployment below 5 percent and a bounty of positive economic indicators, voters seem so dismayed, so distrustful. It might be something as simple as bargaining power.

In his best-known book, The Art of the Deal, Trump advises every negotiator to “use your leverage.” But increasingly, U.S. workers, white-and blue-collar alike, feel they have none. They’ve seen their power erode as they are tossed into a global labor pool, as companies consolidate and shed jobs to please Wall Street, as unions wither, state budgets tighten, technology advances and iconic brands such as Nabisco pack up and move to Mexico.

The squeeze is on.

“There’s a feeling among workers that not only are they replaceable, but that they will be replaced,” says Gary Chaison, a professor of industrial relations at Clark University in nearby Worcester, Massachusetts. “That there is no security anymore, that someone is making a profit by letting them go.”

“Trump,” he adds, “has tapped into that very well.”

According to Reuters/Ipsos polling, 71 percent of Trump supporters either have had to take a lower-paying job in the last few years, have a family member who has had to do so, or have a family member whose home has been threatened by foreclosure. In a sign of how widespread the phenomenon has become, 63 percent of Clinton supporters reported the same dismal tally.

“People feel more insecure about trade than terrorism,” Chaison tells me. “Everyone knows someone who has lost their job.”

What bothers Diangelo most is that he was let go by a company that still valued his skill—just not him. “The sad part is that my job is still there,” he says. “It didn’t go away. I went away.”


None of this should feel particularly new. The United States has been bleeding middle-class workers—especially in the industrial and manufacturing sectors—as long as Bruce Springsteen has been around to sing about it. Candidates adorned with hard hats vowing to bring back factory jobs have become a set-piece of modern politics.

The United States has lost more than 5 million manufacturing jobs in the past 15 years as the trade deficit has mushroomed, according to the Economic Policy Institute, a liberal think tank in Washington. Wage growth in almost all sectors has flatlined over that time, including for the bottom 70 percent of fouryear college graduates--and growth overall has been anemic, at under 2 percent. And while the 9 million jobs vaporized in the flash of the Great Recession have been recovered, the majority of them are of lesser quality than the ones they replaced.

Perhaps most fundamentally, the relationship between employee and employer has shifted. Workers’ share of the pie has decreased substantially since the 1970s, when the country’s corporate and industrial base began to erode. Last year, workers’ share dropped to 75.5 percent of corporate income, even as technology has made workforces more productive and efficient. U.S. corporate profits, meantime, returned to pre-recession levels in 2012. Workers “sense that the recovery is only partial. It helps employers more than it helps workers,” Chaison says.

If workers’ sense of slippage seems familiar, the way their discontent is rippling through our politics feels newly transformative. Voters threw out the Republicans running Congress in 2006, then two years later elected the first African-American president, an outsider who vowed reform. Souring on him, they replaced Democrats then controlling Congress with another set of Republicans in 2010 and 2014, making governance as unstable as the business sector. In a period of war, terrorism and economic chaos, all that churn might best be viewed as a deeply frustrated electorate trying to use what little leverage they have to change a system they consider to be otherwise unaccountable.

Trump has been the main beneficiary of that frustration. He makes those in the crowd feel like they matter, that they finally have a bully of their own who can push back at what they view as an alliance of unprincipled corporate culture and an enabling government. “You’re looking at a situation where the jobs are being ripped out of our states, out of our country, like candy from a baby,” Trump said at a rally this spring.

It has been Trump, along with Democrat Sanders, who has pushed the issue of job losses to countries such as China, Mexico and India to the forefront. Trump has threatened to slap a tax on imports and tear up trade deals. In Indiana earlier this year, he ripped air conditioner manufacturer Carrier for announcing it would lay off 2,100 workers and move its operations to Mexico. He gave Nabisco the same treatment, pledging he would no longer eat Oreos. He has slammed companies such as Apple and Boeing for their overseas operations, as well.

Few presidential candidates have such temerity to challenge well-known American brands, but clearly it is resonating. “They might not like everything he says, but they believe he says what he thinks,” Lewis Gossett, president of the South Carolina Manufacturers Alliance, told me last summer. “I think we’re repeating a time in history when the very rich are removed from the very poor.”


Michael Smith is one of the Americans Trump rallies for. Smith was among 600 Nabisco employees laid off at the bakery on Chicago’s South Side earlier this year, after the company announced it was transferring some work to Mexico. He got the news at 3 a.m. “It was,” Smith tells me, “a dark night when all your livelihood passes in front of you, and you feel like you’ve been given the royal shaft.”

Smith operated the machines that wrapped Oreo cookies and Ritz crackers. With overtime, he could clear $85,000 a year. He’s 59 and wasn’t thinking he would have to re-enter the job market.

The day before, Smith had shown up at a shareholders meeting in Chicago to confront Irene Rosenfeld, the chief executive of Mondelez International, the holding company that oversees the Nabisco brand, about the move to Mexico. While sympathetic, Rosenfeld said it was her duty to maximize the corporation’s value to its shareholders worldwide by cutting costs.

“There are two types of CEO mindsets,” Smith responded, “those who care about shareholders and those who care about the shareholders and the people.”

In our conversation, Smith didn’t begrudge the company’s legal right to relocate the jobs, but he questions a CEO who earned more than $40 million in compensation over the last two years exhorting the virtues of cost-cutting to a room full of laid-off blue-collar workers. “That’s not good citizenship,” he says. “Wealth comes from the workers. That profitability comes from us.”

Clinton met with a small group of the Nabisco workers in March, the day before the Illinois primary. But the visit didn’t leave Smith with much hope that as president she could do much either for the workers’ situation or to reverse the demands of a globalized economy. In part, that’s due to Clinton’s support of NAFTA, which Smith terms an “infection,” but also because of the lobbying might of Mondelez, a $30 billion company, and other big corporations.

Smith is the unusual American voter who says he hasn’t decided between Clinton and Trump. He’ll focus on the election later. First, he has to keep his household afloat and his daughter in school at Columbia College in Chicago. He has six months’ salary to cushion him.

He’s trying to stay optimistic about finding work, saying his wife and daughter are counting on him. But, he concedes, “I think I have been a little bit in denial. Even people of faith have bouts of depression.”


Angela Valero gives a one-word reply when I ask her about a potential Clinton-Trump matchup: “Ugh.” I might as well be asking about who’s going to win the next regatta on Mars, so far is the election from her daily concerns.

Valero’s dream job was to be a corrections officer. She was finally hired on by the state of Connecticut last fall. The single mother of an 8-year-old girl thought that, at last, she had a reliable, stable position with benefits.

But after completing an academy training course and being posted as a guard at the state maximum-security facility in nearby Uncasville, she found out this spring that she was being laid off, a consequence of a decision made by Connecticut’s Democratic governor, Dannel Malloy, and the state legislature to not raise taxes on the wealthy to cover a budget shortfall. Lawmakers worried that the state’s richest residents would relocate to Florida, which has no state income tax, or other states with lower taxes.

During the downturn, Connecticut lost a bevy of high-paying jobs in the financial services sector in the corporate hub of Stamford and elsewhere. The jobs created during the recovery were less lucrative, resulting in lower tax revenue. In addition, the state was spooked when General Electric, responding to an effort by the legislature to raise business taxes, announced it was relocating its headquarters from Fairfield to Boston. Aetna, the health insurer based in Hartford, also threatened to leave the state.

That shelved any notion of new taxes. The state looked to trim its public workforce instead. “Easy targets,” says Lori Pelletier, president of the state AFL-CIO.

Rape counselors, child-service workers, prison guards began receiving pink slips. Ultimately, 2,500 or more state workers could be let go. Pelletier contrasted that with the 200 jobs GE is moving to Boston--something that drew substantial media attention.

The state of Massachusetts and the city of Boston helped recruit GE with a generous benefit package, including $25 million in property tax relief for a corporation that critics have long held pays little in U.S. taxes. “Angela last year paid more taxes than GE,” Pelletier says. “And she’s the one losing her job.”

Valero tells me she has little faith that anyone in Washington can help her. She doesn’t sleep more than four hours a night, kept up by worrying about paying the electric bill and keeping her house. She has no idea whether she’ll ever be recalled to work.

Throughout the interview, she stays stoic, determined, like the corrections office she was trained to be. Only at the end of our conversation does she slip a bit. “I held back the tears,” she says with relief.


Ron Ozer greets me at the door with the sheepishness of someone who isn’t used to being at home during the workday. Ozer, 53, was laid off from DuPont Co. in January after a 23-year career. A Ph.D in chemical engineering, he has more than 20 patents to his name. He worked on long-term projects at the DuPont Experimental Station in Wilmington, Delaware, one of the more storied research facilities in the country, where products such as nylon, Lycra and Kevlar were created.

“Some of the great developments in American industry came out of that site,” Ozer says. “It was a time when America was growing so dramatically.”

But a lack of growth and pressure from investors forced DuPont to announce a merger with another giant, Dow Chemical. In advance of the merger, it has begun to shed jobs. In Delaware alone, DuPont plans to dump 1,700 workers—many in the area of long-term research, which can be expensive without yielding immediate rewards to shareholders. Ozer’s group was eviscerated.

The $130 billion merger of DuPont and Dow blends two U.S. companies that date back to the 19th century. Barry Lynn, an economist at the New America think tank, says that industry consolidation chills the labor market, sapping demand for skilled workers such as Ozer. Dominant companies can use their market power to charge customers more or make suppliers pay less—all without having to grow and create jobs to survive. Indeed, the push from Wall Street is to cull and cut, not grow. And when companies do expand today it’s largely through acquisition, not investment.

“That’s a huge amount of the energy that’s behind Trump,” Lynn says, “the sense of power being consolidated and being out of control and harming me and my family and my community.”

Ozer will try to take advantage of his contacts at DuPont to become a consultant, but admits that’s a gamble. Asked if he thinks he can replicate the six-figure salary he enjoyed at DuPont, he laughs. “I’m not confident of that.”

His chief concern is his two daughters, both of whom are out of college. In order to give his youngest a leg up in the market, he sent her to private Haverford College in Pennsylvania (tuition: $46,000)—going deep into debt to do so. “I have a lot of possibilities, but I need things to start turning into dollars soon,” he says.


For Sara Blackwell, representing U.S. workers displaced by the federal H1-B visa program began as a gig. Now, it’s a full-blown cause.

The Tampa lawyer has been giving away clients who would distract her from her work. She jokes she’s stopped sleeping and exercising. Recently, she launched a website called “I speak to an average of 10 people a day who are victims of this,” she tells me. “The more I learn about this, the more I have to fight.”

She began by representing IT workers at Walt Disney World in Florida who were replaced by guest workers from India brought in on temporary visas by outsourcing firms that contracted with Disney. She has filed a long-shot conspiracy lawsuit in federal court.

Blackwell contends that the practice of outsourcing low-end, back-office IT jobs to cut costs has become endemic. Globalization, she says, is systematically lowering the standard of living of American workers. “It’s a race to the bottom,” she says.

The Disney case garnered the attention of some in the U.S. Senate, including Jeff Sessions, a Republican from Alabama who now is at the forefront of a fight against the American tech industry, which wants to expand the guest-worker program citing a lack of domestic qualified engineers and programmers.

But those tech companies are at the back of the line. According to Ron Hira, a professor at Howard University who tracks applications, outsourcing firms have been crowding out tech companies in the race to acquire the highly coveted H1-B visas, which are capped at 85,000 a year.

Sessions, who is also a fierce opponent of immigration reform, was one of the first U.S. politicians to embrace Trump—and Blackwell has spoken out against the program at several Trump rallies.

She also has consulted with the outsourced employees who worked at Northeast Utilities in Connecticut, including Craig Diangelo.

Part of Diangelo’s frustration—and part of what is driving him toward Trump—is that Washington has done so little to curb what he views as abuses of the H1-B program. There is a greater push now on Capitol Hill to broaden the program rather than rein it in. “There’s nobody to help us,” he tells me. “There’s nobody to say you can’t do this.”

Richard Blumenthal, a U.S. senator from Connecticut, has been part of efforts to expand the program, but also to reform it. “It’s a desperately serious problem,” he says.

He told me that even though there is some bipartisan consensus on reform, efforts still aren’t moving forward, consumed by the same paralysis that’s stalling everything else.

“There are powerful forces against us,” Blumenthal says, “including the companies that exploit these programs.”

To Diangelo, that’s the dilemma of the modern, middle-class voter. He worked hard for years, lost his job when his only transgression was being too old and making too much money, was humiliated when he had to train his replacement, and then watched how state and federal politicians have been able to do nothing to help him.

Why shouldn’t he support Donald Trump? What’s worth preserving? He’s a tech worker, sipping Pinot Grigio over pad thai. He’s no militant or conspiracist. Yet...

“There is going to be an uprising,” he says. “People are starting to say: `I’ve had enough of this. I’ve really had enough.’”

 This report first appeared in “The American Voter,” Reuters’ special election issue, available on iTunes or Google Play.