Newton, Iowa: Anger in the Heartland

On the Eve of Midterm Elections, Scott Pelley Reports on a Town Hit Hard By The Recession

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Two years ago, most Americans voted for change, and if the polls are to be believed, they're about to do it again.

In the latest CBS News/New York Times Poll, 80 percent said they want most incumbents out of Congress regardless of whether that incumbent is a Democrat or Republican.

There's a grim mood among people who were counting on a recovery that has now fallen flat. The economists who decide such things say that the Great Recession ended in June 2009. But since then, we've lost another half million jobs - which helps explain why there is so much anger in the land.

We saw a lot of it right in the middle of the country, among the people who've endured the recession longer than anyone.

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"What's surprised you the most about this recession?" correspondent Scott Pelley asked business owner David McNeer.

"I think the depth of it, and the length of it. I think what surprised me the most about this one is it doesn't wanna end," he replied.

"You know, the economists say that the recession's over," Pelley pointed out.

"Really? They should come to Newton, Iowa," McNeer replied.

McNeer's advertising company is like a lot of small businesses: it's getting smaller. Maxim Advertising in Newton, Iowa puts its customer's logos on nearly anything and business had only grown for 22 years, until 2007.

"And what was all of this?" Pelley asked, looking at a large section of empty shelving in McNeer's storeroom.

"This was filled, Maytag, Maytag, Maytag, Maytag," McNeer explained.

Maytag invented its washing machine in Newton 103 years ago. Five thousand people worked for Maytag there. But Newton lost all of those jobs.

Maytag was bought out, and by 2007 the factory closed; many of the jobs went to Mexico. No one knew it then, but these were the opening days of the Great Recession.

Now, layoffs that started with corporations are cascading into mom and pop shops.

When his business was at its top, McNeer told Pelley he had 22 employees; today he has ten.

"Do you remember the first person you had to lay off?" Pelley asked.

"One of the very hardest days of my life. My wife and I stayed up all night long. We talked. We prayed. We struggled. And you know what? Man, that's a gut-wrenching feeling. You hate it. I hate it. And I never wanted to have to do it again," McNeer said.

"I wonder, when you look forward now, what you think about rehiring people?" Pelley asked.

"When we hire somebody, we're definitely gonna need 'em. I mean we're not going to hire one person until we need two or three and we're probably not going to hire two until we need four for five," he replied.

And that's why the recovery is lifeless: big and small, businesses have settled into doing more with fewer people. "And you ask people to step it up and work harder, work longer, make less," McNeer said.

Asked if this is sort of a new "normal," McNeer told Pelley, "I think for now it is, yeah."

Take a quick look around Newton: Gary Forbes laid off half of his 60 employees, closed two locations, and switched from selling top quality furniture to scratched and dented.

Web site designer Cindy Brunner laid off six of her 14 employees.