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MELISSA BLOCK, HOST:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block. As the presidential candidates spar over job creation, we're going to hear from one town with a dubious distinction. Dalton, Georgia, has experienced the country's worst total job loss in the past year. For more than half a century, Dalton called itself the world's carpet capital, but some carpet mills closed down, others cut back, and the U.S. Department of Labor says Dalton lost 4,600 jobs over the past year.

NPR's Kathy Lohr visited the town in north Georgia.

KATHY LOHR, BYLINE: Janet Canada worked at Mohawk Industries in Dalton for two decades. She saw big changes, restructuring, downsizing, and then...

JANET CANADA: I was just pretty much told I didn't have a job anymore.

LOHR: That was three years ago. Janet's husband also worked for Mohawk. He lost his job in 2010.

CANADA: So there was a mistake that we made 'cause we had all of our eggs in one basket. But he drove a lift truck so he would be laid off for like a week and two weeks, and then he'd go back, work a week, then they started looking at jobs and saying how can we cut, and they started cutting people.

LOHR: Canada, who will be 60 this year, got a small severance package. She made about $32,000 a year and couldn't find anything comparable in Dalton or in nearby Chattanooga.

CANADA: You know, that's a hard salary to replace.

LOHR: It took Janet's husband, Frank, almost 18 months to find a job and, still, he makes less than he did at the carpet mill in Dalton. Not surprisingly, city officials here don't like the idea that they've been designated as the town that's lost the most jobs in the country, and they're fighting it.

MAYOR DAVID PENNINGTON: To lose the most jobs, you had to have the jobs to begin with, and we're still a very dynamic employment center.

LOHR: That's David Pennington, the mayor of Dalton. His insurance business is located downtown where historic buildings and renovated storefronts line the streets. There are even a few loft apartments which have a waiting list. The presidential candidates continue to wrangle over how to fix the economy and create more jobs, but Mayor Pennington says they're not doing anything to help cities like his.

PENNINGTON: Nobody seems to want to address that. They'll mention jobs, but then they go about bashing the other person. We would love to have other manufacturers here. We'd love to have any kind of high-tech business here, whatever. But it's not as easy as people think it is to be able to attract that.

LOHR: Even with the losses, the mayor says the Dalton area still provides more than 50,000 jobs. He says the state should abolish the income tax so Georgia cities can be more competitive. According to the U.S. Labor Department, the region lost nearly 7 percent of its total jobs since last year. The unemployment rate climbed from a low of 3.5 percent in 2003 to more than 12 percent in June of this year.

Executive director of development for the city and county Elyse Cochran says because the economy was so strong here, the economic development plan only began in 2006.

ELYSE COCHRAN: We're focusing on manufacturing because we know those jobs have the highest value.

LOHR: Dalton now has a 184-acre industrial park. Its first tenant, a chemical adhesive company, opened this year. Cochran says the area is gaining businesses, adding at least 800 new jobs in the past couple of years. Still, it has lost thousands during the same period. In another effort to attract people and prospective employers, the city has cut property taxes and recently reduced its sales tax, which is now 5 percent, the lowest in the region.

COCHRAN: What that tells them is that we are a conservative community, that we have efficient government, that if they come here, we're going to be their partner and try to keep their taxes down.

LOHR: City officials say they have the infrastructure to support a large manufacturing base and a strong workforce that's definitely ready and waiting. Back in Cleveland, Tennessee, Janet Canada ended up staying at home to take care of her ailing mother.

CANADA: Anything we need to do this afternoon? No?

UNIDENTIFIED WOMAN: Well, I thought about several things, but I don't know.

CANADA: You don't know?

UNIDENTIFIED WOMAN: No.

CANADA: I don't know either.

LOHR: Canada says after losing their jobs in the carpet industry, she and her husband had to cash in their retirement savings to make it through.

CANADA: I know some that actually have started cleaning houses, not making nowhere near what they were making in the carpet mill. So, you know, it's such a life-changing thing for everybody that thought that we would be there until we retired. That was our plan.

LOHR: Now, many people are figuring out a new plan. For Dalton, Georgia, that means actively recruiting new employers and recognizing that it will take a decade or two to replace the jobs they've lost. Kathy Lohr, NPR News.

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