It’s almost as if, any time says, “things couldn’t get any worse,” they somehow find a way to get worse.
Because after a string of meatpackers downsizing or eliminating factories around the country…
We’re now seeing one of the largest announced shutdowns in years.
More specifically, the citizens of Lexington, Nebraska are about to take it on the chin as Tyson has announced plans to close the local beef factory and eliminate a whopping 3,000 jobs.
That would be a painful loss anywhere. In a place like Lexington, population ~12,000 – it’s devastating.
The macroeconomic factors here are inescapable: Soaring feed prices and tangled supply chains have squeezed margins, while falling demand for meat products in the USA has been a slow, trickling issue for years.
And unfortunately, two big federal initiatives this year have poured gasoline on the fire. ICE raids on workplaces produce a painful ripple effect where even legal immigrants fear to show up to work. (Remember the South Korean Hyundai workers who were led away in chains?) Absenteeism is an ongoing issue whenever ICE ramps up in a state, region, or industry.
The other issue, of course, is the trade war – which has slackened international demand for all kinds of US exports, as retaliatory tariffs and even outright boycotts have taken their toll on US businesses abroad. As economic fears spread and domestic demand softens, businesses have to start cutting production…leading to painful layoffs like Tyson’s.
Unfortunately, the lost workers cut their own consumption – and friends, relatives, and neighbors, seeing their struggles, may similarly start tightening their belts in preparation for possible layoffs too.
This can lead to a painful feedback loop of more jobs being cut as companies see demand slacken…leading to more demand reductions as fear spreads across the consumer economy.
For the 3,000 hardworking Nebraskans at the Tyson plant, this will be a bittersweet holiday season as they prepare to find new work. Let’s all join together to wish them well.
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