1980-2000 - Industrial Decline
America’s industrial history begins in the 1790s with home and craftshop production and a fascinating debate on manufacture. Two hundred years later with the rapid erosion of the nation’s industrial base, that history appears to be coming to an end. Plant closings have occurred in such a flurry in the last two decades that it is difficult to gain a proper perspective on developments.
Contemporary analysts focus on specific events in the 1970s and 1980s to explain industrial decline. The oil embargo crises of the era, hyperinflation, high interest rates, and foreign competition are cited as chief reasons for the recent loss of millions of manufacturing jobs.
A 1999 study by the AFL-CIO revealed that union membership was concentrated in declining industries and there were few new members in expanding industries. Over a 14- year period (1984–97), union members held 80 percent of the jobs lost in major declining industries, but gained only 5 percent of the new jobs in the fastest growing industries. In other words, where jobs were lost on net they were disproportionately union members’ jobs, and where jobs were gained they were disproportionately no-nunion jobs. Employment shifts were not adding to the unions’ membership rolls, but rather decreasing them significantly.
Unions must “run fast” to simply remain in place — that is, unions need to acquire new members through organizing efforts to offset the outflow of members. For example, Richard B. Freeman calculated the annual loss in private union membership and concluded that “unions, like the Red Queen in Through the Looking Glass for whom ‘it takes all the running you can do, to keep in the same place,’ must organize large numbers of workers each year to maintain private sector density.”
Marick C. Masters estimated that for unions to have no change in density in 1995, they would have to gain 315,000 members; but if they wanted to raise density by just 1 percentage point, they would have to add more than a million new members. In 2004, Freeman concluded that in order “to balance off the loss of members due to the normal birth and death of firms and changes in employment in union and nonunion workplaces and maintain their 9-percent share of the private sector workforce in 2001, unions must add about 500,000 new members annually. To add a single percentage point to density unions must add close to 1 million new members."
Only a few scholars have attempted to cast the current situation in a longer historical framework. Historians can point to the last decades of the 19th century for the first instances of de-industrialization. Entrepreneurial failures in family-owned businesses, shifting consumer tastes and technologies, and the early search for low wage labor contributed to the disappearance of manufacturing firms from cities. The 1920s mark another period of decline.
Capital flight to low wage areas continued, but the coming of a mass consumer culture proved the death knell to specialty firms throughout the nation’s existing industrial heartland. The 1920s saw a renewed merger movement and decisions by national corporate leaders to liquidate certain facilities. They aimed to close older inefficient plants and curb overproduction. Such decisions left communities without companies that supplied manufacturing jobs for generations. The evolving nature and purview of the corporation are key elements.
In more recent times for example, telecommunications and transportation improvements have allowed for global operations. As foreign competition has pushed companies to take advantage of low wage labor outside the boundaries of the country, corporations have shifted production not from one community to another in the US as in the past, but to overseas locations. The move from a national to a global corporate capitalist system has successively contributed to manufacturing job loss.
One important impact of industrial job loss is related to a group outside the larger story of American manufacture — African Americans. With the exception of the South, blacks through the 1920s and 1930s do not figure significantly in the nation’s industrial history for one reason: exclusion. Hiring practices of employers and informal and organized opposition from white workers left few positions for blacks in northern manufacture. Pressure from black organizations and the hiring decisions of individuals such as Henry Ford opened some doors in the 1920s, but the greater employment of blacks awaited World War II and federal anti-discrimination edicts.
African Americans began to occupy a growing place in northeastern and midwestern industry in the 1940s, but at the same time those regions experienced long-term industrial decay. Blacks (and Latinos) were newcomers to the northern industrial scene when industry there was not expanding, when manufacturing jobs were shifting overseas, and they would inherit districts of abandoned factories. Past de-industrialization has played a role in the nation’s current urban problems.
Thomas Jefferson worried that industrialization would generate inequalities that would destroy all possibilities for a true democratic republic. But he did not foresee that manufacturing jobs would provide a foothold for many generations of newcomers to the U.S., and that American industrial workers would collectively make their jobs better compensated, more secure, and dignified. Today new jobs are being created in the service and white-collar sectors, but do not provide the same material and personal rewards and enhancements of the lost manufacturing positions. Whether economic prosperity is sustainable with permanent losses in manufacturing employment remains to be seen.
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