Deindustrialization

Deindustrialization occurs when a country or region loses industrial capacity due to relocation or increased efficiency.

Learning Objective

Analyze the impact of deindustrialization on both a global and regional scale, as well as the role technology plays in deindustrialization

Key Points

The term "deindustrialization crisis" has been used to describe the decline of manufacturing in a number of countries and the flight of jobs away from cities.
Detroit and the American automobile industry are regarded as the prototypical examples of how deindustrialization can negatively impact an area and population. They are by no means the only examples of this phenomenon.
In the U.S., the population of the great manufacturing cities of the Midwest and Northeast has declined significantly due to deindustrialization. Manufacturing jobs have been eliminated or relocated to the Southeast and Southwest, where labor is cheaper.
Due to increasing efficiency and productivity, manufacturing today makes up a smaller share of the U.S. workforce than it has at any time in the past hundred years.
The population of the great manufacturing cities of the northeast has declined significantly: Detroit, Cleveland, Pittsburgh, St. Louis, and Buffalo, NY, have all lost half their population or more in the past half-century.
The widespread perception of deindustrialization in the United States is due to shifting patterns in the geography and political geography of production: from the heavily unionized Northeast and Midwest towards the right-to-work states of the Southeast and the high supply of workers willing to accept low wages in the Southwest.

Terms

deindustrialization
The loss or deprivation of industrial capacity or strength.
right-to-work states
Right-to-work states have passed laws that prohibit union security agreements, or agreements between labor unions and employers that govern the extent to which an established union can require employees' membership, payment of union dues, or fees as a condition of employment, either before or after hiring. Right-to-work laws exist in twenty-three U.S. states, mostly in the southern and western United States.
Detroit
the largest city and former capital of Michigan, a major port on the Detroit River, known as the traditional automotive center of the U.S.

Example

Before the 1980s, Detroit was a center of industrial production and a hot spot of American culture. Residents enjoyed a high standard of living and the city boasted a healthy rate of population growth. But after free-trade agreements were instituted with less developed nations in the 1980s and 1990s, Detroit-based manufacturers relocated their production facilities to countries where wages were lower. At the same time, technological innovation continued to increase the efficiency of manufacturing, which required less and less manual labor. As manufacturing jobs were eliminated, people moved away from the city, and those who stayed behind found themselves with lower paying, harder to find work. Today, Detroit is associated with a high concentration of poverty, unemployment, and noticeable racial isolation.

Full Text

Deindustrialization

Deindustrialization occurs when a country or region loses industrial capacity, especially heavy industry or manufacturing industry. This process is often attributed to off-shoring, which is itself a consequence of increased global free trade. Deindustrialization is, in a sense, the opposite of industrialization, and, like industrialization, deindustrialization may have far-reaching economic and social consequences. The term "deindustrialization crisis" has been used to describe the decline of manufacturing in a number of countries, including the U.S., which have lost large numbers of urban manufacturing jobs since the 1970s.

American Deindustrialization

The city of Detroit, and the U.S. automobile industry, are regarded as the prototypical examples of deindustrialization's negative effects, but Detroit is not an isolated example. The population of the United States has nearly doubled since the 1950s, adding approximately 150 million people. However, during this same period (1950–2007), the population of the great American manufacturing cities declined significantly. Detroit, Cleveland, Pittsburgh, St. Louis, and Buffalo have all lost half their population or more in the past half-century. Baltimore lost almost a third of its population, and Philadelphia lost nearly a quarter of its own.

Regional Deindustrialization

In the United States, the deindustrialization of Midwestern and Northeastern cities has occurred in response to shifting patterns in the geography of production. Just as many American companies have moved their manufacturing operations to developing nations, where they can hire workers for far lower wages, so too have manufacturers in the United States relocated from the heavily unionized Northeast and Midwest toward the Southeast and Southwest. In these areas, right-to-work states limit the power of unions to raise wages. Additionally, the high supply of workers forces those workers who are employed to accept low wages.

The Impact of Technology

In order to save costs, manufacturers have done more than merely relocate. They have also eliminated jobs, as technological innovation has reduced the demand for manual labor. Though total industrial employment has been relatively stable over the past forty years, the overall U.S. labor force has increased dramatically, resulting in a massive reduction in the percent of the labor force that is engaged in industry. While 35% of workers were involved in industry in the late 1960s, under 20% are today. Manufacturing is thus less prominent in American life and the American economy now than it has been at any other point for hundreds of years.

The Decline of the Manufacturing Industry

This graphic shows the decline of the manufacturing industry relative to other industries over the course of the past sixty years.

Detroit

This map depicts the economic ramifications of deindustrialization in the Detroit area. The Detroit neighborhoods closest to the city center who were the most dependent upon manufacturing jobs are the most blighted.

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