What impact did deindustrialization have on society?

Deindustrialization has made it impossible for America to economically support a stable urbanized working class, resulting in the social and physical decay of cities that is only partially ameliorated by more recent urban gentrification and the accompanying service sector jobs. Fresh thinking is needed in everything from education to architecture to city planning to transportation, but it is so far lacking.

Industry and the City in America

The process of industrialization in the United States began to take off around the time of the Civil War. The rapid growth of the railroad across the nation, coupled with the increasing surpluses provided by mechanized agriculture, provided a base for the development of industry and the resultant rise of cities and the mass urban labor force. From around 1840 to the early 1950s, industry consistently grew as a portion of the American labor force, interrupted only by the Great Depression[1]. To accommodate this industry, a wave of city building followed, adding growth to the old trading cities of the East such as Philadelphia and New York, and leading to the rise of new interior cities like Detroit, Chicago, and St. Louis. This process continued through the late 19th and early 20th centuries, stalling in the decade or so following the Second World War with the widespread growth of suburbs. City building in America has largely been in decline ever since.

The contours of the development of the US industrial base can be seen by tracing the development of the American machine tool industry. Machine tools are a good proxy for the overall robustness of an industrial ecosystem, as they form the base technical layer for much of heavy industry.[2] In the United States, production of machine tools was scaled up during the Civil War, and by the 1880s high precision machine tools were being mass produced.[3] Mass production continued to scale up through the Second World War, and technological innovation in the industry continued through the first decades of the Cold War—but by the 1970s the industry in the U.S. was stagnant.[4] Competitors in Germany, Japan and China dominated. For the purposes of this investigation, this developmental course can be read as a rough periodization of the rise and fall of American industrial capacity in general.

The United States became majority urban sometime between 1910 and 1920—but American urbanization unfolded unevenly across space and time, generally spreading on the coattails of industry from the Northeast, then to the Midwest, then to the West, and finally to the South. Rail coverage followed this general pattern of spatial expansion, with mileage tripling between 1860 and 1880, and again between 1880 and 1920.[5] The first states to become majority urban were Massachusetts and Rhode Island around 1850, and the Northeast as a whole became majority urban by 1880.[6] Both the Midwest and the West became majority urban in the 1910s. As for the South, that region did not become majority urban until the 1950s, following its belated postwar industrialization (and the concomitant advent of air conditioning).7]

In American cities, flourishing industries provided masses of American workers with social mobility on a scale never before seen.

In American cities, flourishing industries provided masses of American workers with social mobility on a scale never before seen. After World War II, deals negotiated between labor and management institutionalized collective bargaining within the industrial sector, giving workers an unprecedented degree of economic security. Walter Reuther's Treaty of Detroit, negotiated in 1949 between the United Auto Workers union and General Motors, is a typical example of these arrangements. In exchange for protecting GM from annual strikes, it gave workers health coverage, retirement benefits, cost-of-living adjustments for wages, and guaranteed vacation time.[8] For millions of Americans at this time, the American dream was in fact achievable.

To a large extent, this system of political economy subsidized many other parts of city life. It supported entire local business ecosystems, with small businesses catering to local workers. It supported a strong local tax base, which went to funding public infrastructure such as schools, parks, firefighting, and policing. And most importantly, it supported a dense and complex network of social capital, which allowed families, groups of friends, religious institutions, and voluntary institutions all to flourish and mediate community life. The industrial city was bustling and vibrant—for example, in 1941, a streetcar ran every sixty seconds through the heart of Detroit.[9]

This era is often romanticized, but its high level of social stability is indeed visible by certain measures: the homicide rate, for example, fell to its lowest-ever rate in the industrial era in 1935 as the system of political economy matured under New Deal reforms, and stayed there until the mid-1960s, when the dividends of deindustrialization started to come due en masse in America’s cities.[10]

Industrial capital also drove the physical development of America’s cities to unforeseen heights, literally, financing the likes of the Chrysler Building even during the Great Depression. Every major U.S. city now has a cluster, sometimes a forest, of skyscrapers housing mostly service industries. Beyond cultural icons, though, the United States used its industrial surplus to invest in its infrastructure at the highest rate ever in its history, allowing cities to enjoy a well-functioning physical environment.[11] In fact, America has not really built a city in this fashion since the beginning of deindustrialization. Newer cities such as Orlando or Las Vegas grew largely due to suburban sprawl—not organized around urban life in any communal sense—with large commuter populations who spend the vast majority of their lives outside of downtown.

The American urban landscape during peak industrialization, around the year 1950, reveals the context in which deindustrialization occurred. According to the 1950 Census, the top ten most populous cities in the U.S. at that time were, in order: New York, Chicago, Philadelphia, Los Angeles, Detroit, Baltimore, Cleveland, St. Louis, Washington D.C., and Boston. Since the previous census in 1940, all of these cities had registered consistent growth. The order of this list had shuffled around a bit in the intervening ten years, but its contents remained unchanged except for the replacement of Pittsburgh by Washington D.C., which had grown rapidly with the size of the federal government during the war.[12]

This 1950 census is interesting as a snapshot of the American urban environment at its height, on the cusp of decline. Of these cities, all except Washington D.C. had grown on the back of industrialization. What’s more, the population of each of these cities save for Los Angeles and New York peaked in this census and as of 2020 have never come close to their 1950s-era populations (New York for its part began a decades-long decline but eventually recovered its earlier numbers). In all of the cities that witnessed population decline besides Washington D.C., deindustrialization played a large part in this process.

The Post-Industrial City

American cities today are plagued with the effects of deindustrialization, with the working classes bearing the brunt of the decay across the board—in terms of poverty, long-term unemployment, social dysfunction, and crime. These trends have proven remarkably resilient over time; the American urban landscape has never truly recovered from deindustrialization. Nearly every major city in America is littered with the vestiges of long-gone communities, with blocks of vacant lots, entire neighborhoods in disrepair, and abandoned schools, community centers, and churches.

On the surface, though, census data shows that the United States has been continuously urbanizing over its entire history, and by 2010 had reached an urban population of 80%, with the remaining 20% rural. The urban population in 1950, by contrast, only accounted for 64% of the population.[26] So how can we say that the American city has long been in decline?

This data is somewhat misleading, since the census makes no distinction between urban and suburban, meaning that the vast majority of suburbs in America are recorded as “urban” areas (the only other choice being “rural”).[27] And just as industrialization often led to urbanization, so too did deindustrialization often lead to suburbanization. Mass population outflow to suburbia gathered steam in the mid-1950s and continues steadily to this day—by 2000, half of the country was suburban.[28] Suburbanization has created sprawling new areas of settlement in places like Phoenix and Houston which, though recorded on the census as “urban,” are nearly entirely suburban. This can be seen by measuring today’s urban landscape against the peak industrial urbanism of 1950. According to the 1950 Census, the twenty largest cities in America at that time held almost 20% of the country’s population. By 2006, that number had fallen to 10%.[29] In other words, America’s largest cities are half as large relative to the rest of the country today as they were in 1950.[30]

It can be argued that deindustrialization is not a problem since, thanks to the workings of the market, laid-off factory workers will be able to find work in a new sector better suited to the comparative advantage of their local area (in the American discourse, such new opportunities are often described as service sector or high-tech jobs).[31] Besides, freeways and mass transit make commuting relatively simple and at least until COVID, many knowledge workers could dine, shop and be entertained in the city. Unfortunately, empirical reality has not been so frictionless. The service sector, especially in a blighted city, has no use for the large, coordinated workforces of the factory floor, and can only employ a much smaller number of workers relative to industry. The work it does provide is often precarious, with low pay and few benefits.[32] Thus, with the disappearance of industry, disappears the conditions for a mass working class concentrated in cities. These communities largely dissolved—either moving out to less affluent suburbs or scraping by in miserably blighted inner cities—since the new conditions of political economy no longer supported them. Overly simplistic economic models of free trade, which posited seamless transition between sectors, did not account for this rapid immiseration.[33]

Furthermore, according to a 2013 meta-analysis in the Journal of Urban Affairs, every Rust Belt city that has retained economic and social stability through industrial decline has done so through the retention of some portion of their industrial sector via active state industrial policy, and not through an attempted transition into the information economy, as most often seen in the mimicries of Silicon Valley culture presented in the marketing campaigns of desperate city governments.[34] What this state action has looked like, the author argues, is protection of local bases of implicit manufacturing knowledge, coordination with local business elites in order to build a reciprocal ecosystem of “satellite businesses” around the manufacturing sector, and the influence of higher-level politicians and business leaders in order to protect industry.

A rare example of these conditions taking place in America, according to the study, is Elkhart, Indiana, which protected its local tradition of recreational vehicle (RV) manufacturing and coordinated corporate and labor elites in the construction of a flourishing and diversified manufacturing sector centered around the production of RVs, trailers, trucks, and mobile homes.[35] Notably, Elkhart has seen very strong population growth in recent decades, and boasts a vibrant downtown. Unfortunately, such functional coordination is the exception rather than the norm in the United States, and we have nothing approaching such coordinated industrial policy on the national scale. [36]

The post-industrial collapse of community and urban life has occurred on a national scale, but the decline of social capital has been an uneven process, and many analyses have shown that its effects have been far worse for the working classes than they have among elites. This holds true across the board, from material prosperity to social capital to marriage rates.[37] Most visibly, recent years have seen a sharp increase in deaths of despair—that is, deaths resulting from alcoholism, drug abuse, and suicide—among the white working class, which bore the brunt of the most rapid loss of manufacturing jobs in American history, between 2000 and 2010. [38]

This disparity gets at the heart of our current political economy. Deindustrialization in America has caused a significant class sorting, separating the country into those whose livelihoods have been devastated by the loss of industry, and those who have weathered deindustrialization and thrived. The service sector has not come close to providing the urban community stability and economic security once provided by industry.[39] The most stark example of this abject lack of opportunity can be seen in the labor force participation rate, which has been continuously declining among men (who are the vast majority of industrial workers) since the start of deindustrialization, dropping from around 85% in the late 1950s to roughly 67% today.[40] The recent discourse around Universal Basic Income can be seen as another way to deal with this surplus population, rather than as a reaction to any mass automation of existing American industry. The widespread prosperity promised with the advent of the so-called “New Economy” or the “Information Economy” never in fact materialized, and the only class to truly remain intact in recent decades has been the highly-educated elite, largely composed of corporate and nongovernmental managers, civil servants, and “symbolic analyst” knowledge workers.[41] The economic safety enjoyed by this class has not extended to the working classes.[42]

We see this disparity reflected in our cities today. They are often very segregated by class, with enclaves of wealthy professionals concentrated in upscale urban areas or posh inner-ring suburbs.[43] There is often also a working-class neighborhood of both recent immigrants and native workers, who exist as service sector workers willing to cater to the market demand created by professional class elites, whether in traditional service jobs or, increasingly, sporadic gig work. And finally, there remain the blighted old industrial neighborhoods, some of which—especially in the case of urban working-class black neighborhoods in the East and Midwest—have been in a state of de facto social collapse for over sixty years.

Urban areas in the United States no longer have very much of a propertied bourgeois middle class, with that class largely relegated to small-business owners in exurban and rural areas.

As our labor force participation rate continues to sink, and our post-industrial class sorting continues apace, it is becoming increasingly difficult to make any class distinction in the American city outside of identifying winners (or more accurately, survivors) of deindustrialization, and the losers. There is largely nothing in between. Urban areas in the United States no longer have very much of a propertied bourgeois middle class, with that class largely relegated to small-business owners in exurban and rural areas.[44]

It is true that American cities have experienced something of a renaissance since the 1990s, with the re-entrance of elites into many major cities, a trend known as “gentrification”.[45] The most direct benefit of gentrification has been an increased tax base in many major American cities, particularly New York City and Washington, D.C. However, the benefits of this process have not accrued to existing post-industrial working-class communities, which despite building booms bringing new service sector businesses into their deindustrialized neighborhoods have largely remained mired in poverty.[46]

From this we can conclude that gentrification has not meaningfully altered the political economy of the deindustrialized American city. Though increased demand for urban services may have greatly increased the number of urban gig workers doing things like driving for Uber Eats, this has not led to the sectoral stabilization of the urban working class, which has remained mostly dissolved since the flight of industry. Thanks to the precarity of the service sector and the hyper-precarity of ad hoc gig economy jobs, and in the absence of other stable options for mass employment, we can expect any advancement in the condition of urban service workers will not be permanent and structural, but rather temporary and highly contingent on the levels of consumption levels of urban elites, rather than structural. Raising the national minimum wage to $15, if it happens, won’t solve the problem, either.

What’s more, the shock of the COVID-19 pandemic may have caused a resumption of the post-war American tendency towards suburbanization. The pandemic threw class dynamics into sharp relief, with increasing numbers of knowledge workers able to work remotely and considering permanent escape from the crowded city, while “essential workers” remain tied to their service jobs or deal with unemployment. Elites can choose to leave the city at any time, and as skyrocketing real estate prices in the New York City's suburbs can attest, they may be gearing up to do so yet again.[47]

Due to the fact that the vast majority of prosperity in our post-industrial age has redounded to the elite, much of what happens in America’s cities is contingent on the behavior of this class.[48] Whether it’s in the realm of politics, the economy, or culture, the elite now wields a greater level of influence over society simply because many of the social classes below them have essentially collapsed.

If the portion of the elite that has urbanized since the 1990s once again flees the cities, the urban working classes may very well lose what little security the gentrification-era service boom provided to them, and without industry, there is nothing we can do to ensure their long-term economic well-being. We have been taught this lesson for seventy years, but we have yet to learn it. This is unsurprising, as the American elite is by its nature isolated from the immediate economic realities of deindustrialization. They do not bear the material or social costs of deindustrialization, so we should not expect to see a societal focus on these deep problems anytime soon.

To Think About

• Can the changes brought about by the lockdowns and disruptions of the COVID-19 pandemic contribute to the revitalization of American cities, or must they lead to further decline?
• If fewer people commute to city centers, is there an opportunity to re-purpose office buildings and even parking garages to say, housing, shopping and entertainment centers?
• Technology, especially in communications, has shifted factory jobs to knowledge jobs. How can we reform our educational system to embrace a significant number of working-class people, or their children, in these new jobs, enabling them to prosper in cities?