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How to fix what the innovation economy broke about America

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How to fix what the innovation economy broke about America


Valerie worked at Bryan Metal Systems, making suspensions for Chrysler. She made good money there, but that company was taken over in 2005 by Global Automotive Systems. In 2010, Global shut down the Bryan plant and sent the work to Michigan as part of a “global optimization strategy.” Valerie traveled to Michigan to help train her replacements. After that, she bounced around, sometimes working temp factory jobs, until she landed at the Sauder furniture plant.

By 2019, unemployment was below 4% in Williams County, but higher-paying jobs had been replaced by work with low wages and “temporary” status that employers maintained—in name only—so they wouldn’t have to pay benefits. Menards, a big Midwestern home-improvement retailer, became the largest employer in the county. Menards wrangled a rich package of tax incentives and infrastructure out of local and state government in return for putting a distribution center about 15 minutes northeast of Bryan. By late 2019 people were starting at about $14 an hour, or about $28,000 per year, for full-time work. In the last 20 years, the median household income in Williams County (in constant dollars) has gone from $62,000 to $49,500. Defined-benefits pensions have given way to less-generous retirement savings accounts. Health insurance premiums have gone up. So have deductibles.

As the employment landscape changed, so did the county’s demographics. Young people, especially college-educated young people, left and didn’t come back. I asked Les McCaslin, the retiring chief of the Four County Board of Alcohol, Drug Abuse, and Mental Health Services and a native of the area, how he thought they might be persuaded to return. He remembered a recent economic development meeting: “We were talking about the town. And I simply said, ‘Why would you come here? Why would I bring my two kids?’ And there was silence in the room. You had commissioners there and they couldn’t come up with one reason.”

The Menards effect

Bryan’s hospital, Community Hospitals and Wellness Centers (CHWC), caught the fallout from these changes. As was true in many such communities, CHWC, an independent community hospital, became the largest employer in town. But it struggled to stay open and independent. Because the county’s population was getting poorer and older, many patients qualified for either Medicaid or Medicare, both of which pay lower reimbursement rates than private insurance. (The two government programs account for two-thirds of CHWC’s revenue.) So although, say, an MRI machine costs CHWC just as much as it would another hospital in a richer area, CHWC gets paid at a lower rate when it is used.

Former hospital CEO Phil Ennen calls this “the Menards effect.” The company was “a real problem for us,” he says. “Seventy-five percent of Menards [employee] accounts with us are Medicaid, charity, or some sort of self-pay. From a health-care perspective, they are a horrible employer.”

Many people were like Valerie: they just didn’t go to doctors. The spring after we sat in the basement of the church, Valerie was back there, this time counting Girl Scout cookie money with her daughter and a friend. She still worked three jobs. Her back ached from an old injury during her days at Bryan Metal Systems. And she was coughing from a bug she thought she’d caught from a coworker at Sauder. Valerie wound up with bronchitis, an inner ear infection, and a sinus infection, but she didn’t miss any work, because she had no paid sick leave. “No! I went to work every day,” she said, laughing, which called forth a brief coughing fit.

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Donald ’67, SM ’69, and Glenda Mattes

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Donald ’67, SM ’69, and Glenda Mattes


Don Mattes started giving to the Picower Institute for Learning and Memory at MIT before he himself was diagnosed with Alzheimer’s disease. Since his death in 2020, his wife, Glenda, has carried forward Don’s passion for its work. “My wish is that no one ever has to go through the horrors of Alzheimer’s disease ever again,” Glenda says. The Matteses have also supported the Koch Institute for Integrative Cancer Research at MIT.

Legacy sparks hope. An early key employee of Andover Controls who later ran the company’s European operations, Don visited six continents with Glenda during their 30-year marriage—often to ski or bicycle. “Don’s was a life well lived, just too short,” Glenda says. The couple made provisions in their estate plan to support the Picower Institute. After Don died, Glenda made a gift to MIT of real estate that established both endowed and current-use funds there to support research on Alzheimer’s, dementia, and other neurodegenerative diseases. Glenda is a cancer survivor, and the gift also endowed a fund in the couple’s name at the Koch Institute.

Great discoveries being made at MIT: “Don always said the best thing he got from MIT was being taught how to think,” Glenda says. “MIT is an amazing place. Picower Institute director Li-Huei Tsai and her team are doing more than looking for a treatment for Alzheimer’s. They’re looking for the root cause of the disease. I am also fascinated with the Koch’s melding of engineering and biology. The chances they are going to solve the cancer issue someday are very high.” 

Help MIT build a better world.
For more information, contact Amy Goldman: (617) 253-4082;  goldmana@mit.edu. Or visit giving.mit.edu/planned-giving.

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Investing in women pays off

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Investing in women pays off


“Starting a business is a privilege,” says Burton O’Toole, who worked at various startups before launching and later selling AdMass, her own marketing technology company. The company gave her access to the HearstLab program in 2016, but she soon discovered that she preferred the investment aspect and became a vice president at HearstLab a year later. “To empower some of the smartest women to do what they love is great,” she says. But in addition to rooting for women, Burton O’Toole loves the work because it’s a great market opportunity. 

“Research shows female-led teams see two and a half times higher returns compared to male-led teams,” she says, adding that women and people of color tend to build more diverse teams and therefore benefit from varied viewpoints and perspectives. She also explains that companies with women on their founding teams are likely to get acquired or go public sooner. “Despite results like this, just 2.3% of venture capital funding goes to teams founded by women. It’s still amazing to me that more investors aren’t taking this data more seriously,” she says. 

Burton O’Toole—who earned a BS from Duke in 2007 before getting an MS and PhD from MIT, all in mechanical engineering—has been a “data nerd” since she can remember. In high school she wanted to become an actuary. “Ten years ago, I never could have imagined this work; I like the idea of doing something in 10 more years I couldn’t imagine now,” she says. 

When starting a business, Burton O’Toole says, “women tend to want all their ducks in a row before they act. They say, ‘I’ll do it when I get this promotion, have enough money, finish this project.’ But there’s only one good way. Make the jump.”

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Preparing for disasters, before it’s too late

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Preparing for disasters, before it’s too late


All too often, the work of developing global disaster and climate resiliency happens when disaster—such as a hurricane, earthquake, or tsunami—has already ravaged entire cities and torn communities apart. But Elizabeth Petheo, MBA ’14, says that recently her work has been focused on preparedness. 

It’s hard to get attention for preparedness efforts, explains Petheo, a principal at Miyamoto International, an engineering and disaster risk reduction consulting firm. “You can always get a lot of attention when there’s a disaster event, but at that point it’s too late,” she adds. 

Petheo leads the firm’s projects and partnerships in the Asia-Pacific region and advises globally on international development and humanitarian assistance. She also works on preparedness in the Asia-Pacific region with the United States Agency for International Development. 

“We’re doing programming on the engagement of the private sector in disaster risk management in Indonesia, which is a very disaster-prone country,” she says. “Smaller and medium-sized businesses are important contributors to job creation and economic development. When they go down, the impact on lives, livelihoods, and the community’s ability to respond and recover effectively is extreme. We work to strengthen their own understanding of their risk and that of their surrounding community, lead them through an action-planning process to build resilience, and link that with larger policy initiatives at the national level.”

Petheo came to MIT with international leadership experience, having managed high-profile global development and risk mitigation initiatives at the World Bank in Washington, DC, as well as with US government agencies and international organizations leading major global humanitarian responses and teams in Sri Lanka and Haiti. But she says her time at Sloan helped her become prepared for this next phase in her career. “Sloan was the experience that put all the pieces together,” she says.

Petheo has maintained strong connections with MIT. In 2018, she received the Margaret L.A. MacVicar ’65, ScD ’67, Award in recognition of her role starting and leading the MIT Sloan Club in Washington, DC, and her work as an inaugural member of the Graduate Alumni Council (GAC). She is also a member of the Friends of the MIT Priscilla King Gray Public Service Center.

“I believe deeply in the power and impact of the Institute’s work and people,” she says. “The moment I graduated, my thought process was, ‘How can I give back, and how can I continue to strengthen the experience of those who will come after me?’”

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