NAFTA's small-town impact

By being flexible, Morrilton, Ark., shows how to survive when jobs move

Just a few months ago, the future of this small town seemed as dark and foreboding as a storm rolling in over the Ozarks.

Two of Morrilton's biggest employers - Levi Strauss and Arrow Automotive - had up and left, moving overseas for the lure of cheaper wages and lower costs. Almost instantly, one-sixth of Morrilton prepared for the unemployment line.

The town would collapse, some said, like so many NAFTA ghost towns that lost needle-trade and manufacturing jobs to places such as Sri Lanka or Honduras.

But today, Morrilton is far from empty. The town has forged a new identity and taken the first steps toward recovery. It's experience is a parable of rural America in a free-trade age - to survive, small towns must turn away from old manual-labor models and toward high-tech solutions.

"Morrilton has become a model transition community," Barbara Pardue, executive director of the Arkansas Department of Economic Development. "It wasn't going to be a blinking 'hold' button waiting for something to come to it."

Across America, the impact of free trade has been significant. While towns up and down the US-Mexico border are bustling, old Southern textile towns are feeling pinched. In 1968, more than 1.4 million Americans made clothing. Now only 770,000 cut and sew. Last year, the US imported some $51 billion in apparel - about six times more than it exported - mostly from the developing world.

According to one union comparison, a US manufacturing job that pays $10.12 an hour, including benefits, costs companies just $1.51 an hour in Mexico and 91 cents in Honduras. Indonesians work for as little as 16 cents an hour.

Other businesses, such as aerospace giant Lockheed Martin, have also complained about losing American jobs, but overall, US officials say, free trade's benefits have outweighed its drawbacks. According to Department of Labor statistics, 210,000 American workers have lost their jobs in the past five years because of the North American Free Trade Agreement (NAFTA). Yet the humming economy - which NAFTA can take some credit for, these officials say - created 267,000 new jobs last November alone.

Here in Morrilton, things began a turn for the better on - perhaps appropriately - a stormy night. Some 200 of the town's 6,500 residents met in the local high school gym to discuss their future.

"Many people were making predictions that Morrilton was going to be another Southern town that lost key jobs and died," says Mayor Stewart Nelson.

Change was needed - that much was certain. But the question was: how to move from a very unstable manufacturing community to one with more stability?

Learning new skills was the answer, and the local community college said it could offer classes in computer technology. Many of the former textile workers had received 18-month severance packages, giving them the option to go back to school and learn new job skills. And most were eager to try - in contrast to many other residents across the state.

"We have so many communities in this state that had garment factories," says Ms. Pardue. "They say, 'We have the building. Let's get another garment factory.' That's not a forward-looking community."

Later, the town's business and political leaders called various industries in the state and asked them to remember Morrilton when it came time to relocate or expand. With the help of the Arkansas Economic Development Commission, they promoted Morrilton as a forward-thinking town with citizens willing to learn a new trade - any new trade.

Last month, these efforts paid off. On a recommendation from the Arkansas-based telecommunications company Alltel, ICT Group Inc. decided to go to Morrilton. It will bring 620 jobs in the next three years - nearly half the amount lost when Levi Strauss and Arrow left.

The company, which provides customer-service calls for financial institutions, will pay employees between $10 and $12 and hour when it opens next year, similar to the recently lost manufacturing jobs.

Most here are relieved that Morrilton seems to have found a new niche that provides greater employment opportunities. "This little town hung in there and didn't give up," says resident Pat Greeno.

A group of residents and political leaders will visit other Arkansas towns in the fall to share their success story as the little town that could. And around town, there's a renewed energy and a sense of relief.

"It's as if we had been holding our breath," says resident Jean Smith. "Now we have let it out and can breathe again. Morrilton will be all right."

(c) Copyright 1999. The Christian Science Publishing Society