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An aerial view of Johnstown, PA

The Abandonment of Small Cities in the Rust Belt

Oct. 10, 2019
The loss of manufacturing jobs gutted these smaller metropolitan and rural areas. What will it take to revive them?

During the 20th century, America built thousands of manufacturing plants in small cities in the Midwest. There were food processing plants, auto manufacturers, textile fabric mills, cut and sew apparel mills, paper mills, foundries, hand tool manufacturers, major appliance manufacturers, machine shops, and many others, according to the Bureau of Labor Statistics data from that era. When these plants were built, whole communities formed around them providing good paying jobs for millions of people without college degrees, as well as jobs for all of their supplier companies and the merchants in the communities.

Things began to change for these communities in the 1980s, when American corporations began to outsource production and re-engineer their organizations to adapt to globalization. But, at the turn of the 21st century, two things happened that would seal the fate of many of these communities. The Chinese were allowed into the World Trade Organization and the NAFTA Agreement went into effect. These changes led to the devastation of many smaller cities and towns.

Here are some examples:

Danville, Virginia:  The Danville River Mill was incorporated in 1882 and four generations of local families have worked at the mill. According to the Coalition for a Prosperous America, in 1993, Dan River Mills had 6,500 employees operating seven mills. But, after Congress approved NAFTA in 1995, Dan River began laying off their employees—and by 2001 they were all gone. In fact, from 1997 to 2009, 650 textile plants were closed, says the National Council of Textile Organizations.

According to the Coalition, the murder rate in Danville has tripled, gang activity has increased, and food stamp recipients increased from 5,000 in 1989 to 13,000 in 2018. The median household income dropped from $44,357 (adjusted for inflation) in 1992, to $32,935 in 2015.

Dayton, Ohio: The city of Dayton is back in the news after the shooting on August 7 that killed eight people. But Dayton's problems go back many years before the shooting. An article in New Geography explains that since 1980, Dayton has lost 15,000 manufacturing jobs at large companies such as NCR, Mead Paper, Delphi, Reynolds and Reynolds, and General Motors. But the loss of major corporations only tells part of the story. In the 1980s Dayton had more than 600 machine shops, but by the 1990s the number had fallen 50%.

Today, the city struggles with the ongoing problems of poverty. Dayton has lost 50% of its population since 1960, and one-third of its current population lives in poverty. There has been an increase in murders, violence, drug abuse, and abandonment. The opioid epidemic has hurt Dayton more than most small cities. According to a ProPublica/Frontline documentary, 400 people died from fatal overdoses in Montgomery County (which includes Dayton) in the first half of 2017.

Newton, Iowa: After Whirlpool bought Maytag, it shut down the Newton appliance manufacturing plant in 2007, and 550 workers lost their jobs (the plant’s workforce was already down from 2,600 employees in 2000). Much of the production went to Mexico. Maytag had been in Newton, Iowa, for almost 100 years, and generations of Newton families had devoted their lives to Maytag. Newton Iowa has lost nearly 4,000 jobs since the Maytag plant was closed in 2007, which is 20% of the population.  According to an article in the Chicago Tribune, however, the chairman and primary stockholder of Maytag received more than $80 million from the sale of his shares.

Southwestern Pennsylvania: Pennsylvania is a state with hundreds of small towns. Since 2001, manufacturing employment in southwestern Pennsylvania declined by 24.3%--and according to the Bureau of Economic Analysis, Pennsylvania lost 294,000 manufacturing jobs between 2000 and 2010. An article in the Pittsburgh Tribune-Review indicates most of these job losses were outside Philadelphia and Pittsburgh, in small towns like East Huntington at Quinn Energy, the DME mold base plant in Youngwood, and at Acres National Roll in Avenmore. In fact, manufacturing employment in Allegheny, Armstrong, Beaver, Butler, Fayette, Washington, and Westmoreland counties dropped by 3,576 during this time.

PRI'S The World tells the story of the little town of Monessen, Pennsylvania, 27 miles south of Pittsburgh. After Monessen lost its steel mills in the 1990s, it has struggled. The city lost two thirds of its population, buildings are boarded up, and windows are missing. The town used to have nine elementary schools before globalization, but today there is only one.

The town of Monessen invited both Hillary Clinton and Donald Trump to speak during the 2016 election. Only Trump came, and said "this wave of globalization has wiped out totally our middle class. It doesn't have to be this way,” His assertion was correct, but after he was elected, he did nothing for Monessen, Pennsylvania.

Bruceton, Tennessee: Bruceton is one of the earliest rural towns hit by globalization and the effects of NAFTA. Bruceton was the home to the Henry L. Siegel company, which manufactured jeans and suits in three large textile plants employing 1,700 workers. An article in CityLab shows that after NAFTA was approved, the textile industry, including HIS, went into freefall. The layoffs started in the mid-90s and the last 55 employees were laid off in 2000.

The three large plants are now empty, the windows broken, and the town has suffered a similar fate. In the downtown area, the bank, the supermarket, and the clothing store are gone. Unemployment in Bruceton has been as high as 18%. To survive, the laid-off workers have been forced to take jobs in other counties, work part-time, retire, give up working, or take minimum-wage service jobs.

Flint, Michigan: At this town’s peak in the 1970s, General Motors employed 80,000 people. Today, General Motors employs 7,200 and Flint's population has decreased 50%. Flint is known for its ongoing water crisis caused by lead tainted drinking water. Flint is only one of many cities in Michigan that have been hurt by the decline of manufacturing. From 2000 to 2010, Michigan lost 420,000 manufacturing jobs (BEA).

Johnstown, Pennsylvania: Johnstown was once a thriving town that had steel mills and other manufacturers. After 2000, people began moving away. An article by WJAC says between 2000 and 2018, 4,459 people left the town. In 2017, the unemployment rate was still 7.3% and the poverty rate had risen to 35%. In Johnstown and Cambria County, there are 4,600 abandoned properties. Eighteen hundred of them need to be demolished.

Galesburg, Illinois: In 2004, Maytag shut down its refrigerator plant in Galesburg and moved the production to Reynosa, Mexico. Approximately two thousand workers lost their jobs. During the decade from 2000 to 2010, the state of Illinois lost 302,000 manufacturing jobs (BEA). During this same period, the Department of Commerce found that U.S. multinational corporations laid off 2.9 million American workers and hired 2.4 million workers overseas.

Youngstown, Ohio: The Brookings Institution revealed that out of the top 100 metropolitan areas in the country, Youngstown registered the highest percentage of its citizens living in concentrated poverty. A story from the Hampton Institute describes Youngstown as losing manufacturing jobs when its steel mills began closing in the 1980s. Between 2000 and 2010, the population of Youngstown dropped from 82,000 to 66,000, and the state of Ohio lost 402,000 manufacturing jobs (BEA). The manufacturing troubles continued when General Motors shut down the nearby Lordstown plant in 2018 and laid off more than 1,500 autoworkers.

Youngstown is now known for violent crimes and the drug trade. In 2013, the city had 6,000 vacant buildings. One of the economic facts of deindustrialization is that when people abandon a town, there is a loss of tax revenue to pay for police, fire, and health services at a time when violence and crime increase, along with opioid deaths, heart attacks, domestic violence, prostitution, homelessness, and food insecurity.

Muncie, Indiana: From World War II through the 1980s, Muncie was a manufacturing powerhouse with glass and auto parts manufacturing, meat packers, and a Chevrolet assembly plant. A photo essay in The Guardian shows that most of these companies closed their doors in the 2000s. The latest job losses and plant closures in the 2000s have fueled the problems of drug use, broken families and loss of unions, and have produced 2000 abandoned houses. Between 2000 and 2010, Indiana lost 213,00 manufacturing jobs (BEA).

The loss of manufacturing is not just a phenomenon of the Rust Belt states. According to William Killingsworth in his book Saving American Manufacturing, between 2000 and 2007 (before the Great Recession), American manufacturing lost 50,000 facilities and 3.5 million manufacturing jobs. Another 2 million jobs and 25,000 establishments were lost during the Great Recession. Despite the claims of pundits who say America is about to enter a manufacturing Renaissance, it is unlikely the factory jobs with good wages and benefits are coming back to these communities.

So what happens to manufacturing workers who lose their jobs in the rural towns?

According to an analysis by Jeff Ferry, an economist at the Coalition For Prosperous America, most of these people have to take jobs in the service industries and their standard of living declines. According to the CPA survey, most of the non-supervisory laid-off workers found jobs in the service industries in leisure and hospitality (bars, coffee shops, restaurants and hotels), social assistance and education services, which offer low-pay and reduced hours. The CPA survey estimates that laid-off manufacturing workers suffered a 19.2% fall in their standard of living, and many of the service jobs offer little or no benefits.

A study published in 2015 by Princeton professors Angus Deaton and Ann Case identifies a “Sea of Despair” among white workers with a high school education. Their research shows that the mortality rate for this group increased 130% between 1998 and 2015. Many of these deaths were from suicides, drug overdoses, and alcohol-related problems. According to the Centers for Disease Control, drug overdoses are 50% higher in rural areas than in urban areas. The research shows that "rates of addiction, suicides, domestic violence, and depression have risen, [as have] rates of heart attacks and strokes.” The fundamental rule seems to be, "first they lose the factories, but second they lose everyone who supported the factories."

The tragedy of this story is that the government didn't do very much to reduce the impact of this crisis, and there were many things they could have done that would have slowed down or prevented the devastation to these communities. First, the government could have enforced the WTO agreement with the Chinese to stop their cheating and mercantilist practices beginning in 2001.

Second, it could have made stopping currency manipulation and overvaluation of the dollar a primary initiative like President Reagan successfully did in 1985.

Third, the Congress could have identified industries and products vital to national security and made them off-limits to imports or foreign countries.

Fourth, Congress should have passed an extensive infrastructure bill, which would have provided thousands of manufacturing and construction jobs inside the U.S. The government should have funded and passed a comprehensive apprentice training program instead of “jawboning” the issue and asking for corporations to voluntarily create training programs. And, most importantly, the government should have made a commitment with measurable goals to begin reducing the trade deficit. There is much that could have been done to reduce the burdens and the losses of these small-town communities and their victims, but they have been abandoned.

During the last election in 2016, the Democratic Party and Hillary Clinton offered few solutions to the Rust Belt, and she made very few political stops to any of these abandoned towns. But Donald Trump made a lot of stops in the Rust Belt and promised he would bring their jobs back. His promises worked, and Wisconsin, Michigan, Pennsylvania, and Ohio put him in the White House.

But so far, Trump has made little progress in bringing manufacturing jobs back to these suffering communities. It will be interesting to see in the 2020 election if either a Democrat or President Trump will propose policies that will genuinely help the communities and citizens in these Rust Belt towns--because the outcome of the 2020 election may depend on Wisconsin, Michigan, Pennsylvania, Indiana, and Ohio.

Michael Collins is the author of The Rise of Inequality and the Decline of the Middle Class.

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