Rising from the Ashes: Economic Transformation in Rust Belt Cities

It has become an all too familiar story: The once thriving manufacturing powerhouses that made up the rust belt region lie vacant. Cities in the geographic region once known as the industrial heartland of America have been declining since the mid-twentieth century due to a variety of economic factors, including the deindustrialization of the metals-based industries that defined the region and increased mechanization of industrial processes. Despite the widespread decline of the rust belt in the latter half of the twentieth century, recent research shows evidence of economic turnaround in some cities.

In the article, “Surviving the Era of Deindustrialization: The New Economic Geography of the Urban Rust Belt,” George Hobor examines the divergent trajectories of the most (e.g. Grand Rapids, MI and Worcester, MA) and least (e.g. Flint, MI and Buffalo, NY) successful cities in the region based on socioeconomic performance to show how successful performers have adapted to a changing economic environment. The data reveal that success stories do exist for rust belt cities in the wake of deindustrialization and hold important policy implications for sustained economic growth.

To identify commonalities between different types of rust belt cities, Hobor constructs a fuzzy set – a set whose elements have degrees of membership ranging from zero to one, with one denoting full membership – to characterize the “ideal type” city. “Ideal type” cities combine three main characteristics: medium size, strong manufacturing base, and industrial vulnerability. The more closely a city resembles the “ideal type,” the closer its score is to one. Cities with similar characteristics are grouped together into eight possible city types. These city types range from the “ideal type” mentioned above to small cities with a weak manufacturing base and low industrial vulnerability. Within each city type, Hobor uses census data to further divide them into the categories of stable, struggling, and devastated.

Contrary to popular belief, the data suggest that stable outcomes are as likely to occur as devastated outcomes and that performance is not specific to city type. While devastated outcomes are most common in “ideal type” cities (Type one) and smaller cities with a strong manufacturing base and at least 50 percent of manufacturing employment concentrated in metals-based industries (Type five), many stable performers also exist within these types.

A closer look at stable and devastated Type one and Type five cities sheds light on the ways in which different city types have adapted or lagged behind in response to a changing economic environment. Manufacturers in “ideal type” stable cities have made an obvious move towards post-industrial production; though some examples of old manufacturing remain. For example, 28.9 percent of manufacturers in stable cases have shifted from metals-based production to plastics and chemicals. Devastated Type one cases reveal traces of “new” manufacturing, albeit to a much smaller degree (12.9 percent). Stable Type five cities, on the other hand, have specialized, retaining old manufacturing in branch plants, with 55.9 percent of employment concentrated in auto and heavy metals. In contrast, devastated Type five cities have not been met with much success in retaining old manufacturing; their weak manufacturing sectors and heavy reliance on the auto industry make them further susceptible to future manufacturing declines.

Despite the existence of stable performers in the region, the data provide evidence of the tenuous nature of heavy manufacturing as a route to stability. In turn, scholars have suggested other manufacturing and service based routes to stability. Two manufacturing based roles that cities can occupy are that of producer of new knowledge, innovations, and cutting edge technologies or a light, flexible manufacturer. Service based roles for cities include producer services hubs, tourist destinations, and centers for healthcare services.

The aforementioned findings have important policy implications. Hobor suggests that policymakers should find ways to develop the workforce by better linking workforce needs to community colleges and trade schools, actively examining state-level business tax systems and devising job retention tax credits to keep employers, maintaining friendly tax policies that will aid in attracting investment, and facilitating networks that exist between existing employers. Corporate community involvement and investment in the social sphere can also be a driver of local growth. While the negative impact of deindustrialization on the rust belt is hard to deny, stable cases provide evidence of cities’ ability to adapt to economic restructuring. It is vital for policymakers to take note of the above findings when deriving policies to fuel economic growth in the rust belt cities.

Feature Photo: cc/(contemplative imaging)