Notes on Post-Industrial Space: Global Processes, Local Effects
Updated: Jun 6, 2022
Fig. 1. Budd Railcar Factory, Philadelphia. Photograph by Jimmy O'Donnell.
If you stand under the cathedral ceiling of the Budd Railcar Factory in Philadelphia, you could be forgiven for thinking that an entire world and way of life has disappeared forever. We often use the term 'post-industrial' to capture this sense of loss, referring to cities that have experienced substantial decline in manufacturing employment and industrial tax base. Some of these cities have managed to shift their aggregate economies to finance, insurance, and real estate development--the so-called FIRE sector; however, many former industrial cities have nothing that can begin to replace the broad prosperity once afforded by the manufacturing economy. Indeed, the scale of destruction wrought by capital flight from U.S. cities in the late twentieth and early twenty-first centuries has few precedents outside of wartime.
And yet, we do not live in a post-industrial world. Far from it. More industrial goods are manufactured today than at any time in history (Fig. 2). Worldwide growth in the manufacturing sector has been nearly inexorable since the Organization for European Economic Co-operation (OEEC) began keeping reliable statistics in 1948, a role assumed by the Organization for Economic Co-operation and Development (OECD) in 1961. Each recovery from recession pushed manufacturing output higher than before. For example, the crash of the housing market created a global contraction in the rate of growth of industrial output between 2007 and 2009, which rebounded dramatically after 2010, only to fall and rebound again with the onslaught of the Covid-19 pandemic. Between 1998 and 2020, worldwide manufacturing output nearly tripled from $5 trillion to $14 trillion, even as the industrial sector continued its decline as a share of overall GDP from a peak of 17% in 2004 to 14.5% in 2019 (World Bank 2022). Even in the United States, the manufacturing sector experienced its most rapid growth in the 1990s, and its highest peak of output in 2019 (Fig. 3).
Fig. 2. Global Industrial Output, 1920-2020. This is an indexical graph, with 2015 =100. Based on available data from the OECD.
Fig. 3. United States Industrial Production, 1940-2010. Source: U.S. Federal Reserve.
In this sense, then, the term 'post-industrial' only begins to make sense as we consider the impact of these broad forces on particular places, rather than as an aggregate condition. What changed for places like Philadelphia, then? Two things. First, even as industrial output grew over the last century, manufacturing as a share of the economy declined precipitously in the Unites States, and indeed globally. While the number of industrial jobs peaked at 19 million as late as 1979, manufacturing as a share of GDP fell from 32% to 14% between 1950 and 2016 (Houseman 2018, 3–4). From 1980 to 2017, the U.S. posted a net loss of 7.5 million manufacturing jobs. Perhaps even more acute has been the impact of the sustained attack on organized labor over the last century. The decline of manufacturing's share of the economy has been accompanied by the decline in organized labor, which had long formed around fixed capital investment at the point of production. As a percentage of total employment in the U.S. economy, union membership peaked at 28.3% in 1954, amid a period of broadly shared prosperity (mostly for White workers, though also for Black workers to some extent). Over the next several decades, union rates fell, bottoming out at 10.7% in 2016, with the sharpest drop occurring after 1983 (Mayer 2004, 11–12; Bureau of Labor Statistics 2019). Globally, millions of men, women, and children have been absorbed into the industrial economy producing electronics, clothes, plastics, and every conceivable good, but these are nearly all non-union jobs. Workers often earn the bare minimum for survival in toxic and abusive working conditions. Within the U.S. and abroad, the result has been a massive redistribution of wealth upward within an expanding global economy.
Fig. 4. The relatively shared prosperity of the period from World War Two to the mid-1970s stands out in this graph.
The second key change is in the location of manufacturing. As early as the 1920s, manufacturers began the search for regions with lower wages and looser regulations to relocate their operations (Walker and Lewis 2004). In the 1920s, for example, the Northeast experienced a wave of textile factory closings, which left behind workers in places such as Lowell and North Adams in Massachusetts, Paterson in New Jersey, and the mill towns of the Connecticut River Valley. Many of these operations relocated to North Carolina, West Virginia, and other locations in the Southeast to take advantage of cheap labor and general anti-union sentiment, although White and Black workers alike resisted such sentiments -- a topic that we will examine in a future post (Simon 1998; Kelley 2015). In the automobile industry, while the main assembly lines remained in big cities like Detroit, parts manufacturers increasingly located in peripheral locations to take advantage of lower land costs to build new factories. And even as plants expanded and retooled for the war effort in the 1940s, many large new facilities opened in suburban greenfield regions where land was cheap and abundant, and civilian casualties would be lower in case of bombing raids (Hise 1999; Hyde 2013). This pattern of expansion of certain industries or individual factories within cities along with the dispersal of others to more open sites characterizes much of the period from the 1920s through the 1940s.
In the decades following World War II, this quest for cheaper industrial locations with lower wages, space for expansion, compliant local states, and more relaxed environmental regulations not only accelerated, it took on a global scope. Emerging sectors such as the aerospace, electronics, and software industries, for example, would inevitably locate in these regions (Markusen et al. 1991; Schulman 1994; Bernard and Rice 1984). Several key developments accelerated this quest, including: the increasing power of large-scale banking and financial institutions; international trade agreements that lowered cost barriers for the movement of capital across borders; the emergence of robotic technologies, computer-driven assembly processes, and modular factory architecture; and the rationalization of container ports for deep ocean shipping (Harvey 2006; Koistinen 2016). During the Cold War, the U.S. government and the World Bank provided loans and incentive programs to spread "free enterprise" as a way to defeat Soviet influence while creating lucrative export and investment platforms for large corporations (Fig. 5). These developments stretched out supply chains and greatly facilitated the movement of previously fixed capital investments from the old industrial urban centers of Europe and North America to the Caribbean, Central America, Southeast Asia, and eventually China (O’Rourke and Williamson 2017).
Fig. 5. Stills from a 1973 trade film "Progress Island, USA." It was produced by the Puerto Rican Economic Development Administration with funding from the U.S. State Department as a way to promote investment by U.S. manufacturers.
Meanwhile, the continual effort by manufacturers to break the power of organized labor incentivized their movement away from heavily unionized regions, reshaping the geography of the manufacturing economy both within the U.S. and beyond. Thousands of factories relocated first to the Sunbelt of the Southeast and West, then to non-union regions and special manufacturing zones such as the maquilladores in Mexico and the free trade and industrial zones of Puerto Rico, Malaysia, Indonesia, the Philippines, and Bangladesh. For those cities left behind by capital flight, the shuttering of factories and withdraw of capital has every appearance of deindustrialization. Workers in Detroit, St. Louis, and Philadelphia bear witness to an urban conditions characterized by shuttered factories, crumbling infrastructure, environmental degradation, vacant and abandoned properties, and rising rates of poverty--the classic 'post-industrial' landscape (Linkon and Russo 2002; Wuthnow 2019; High and Lewis 2007).
As manufacturing began its march out of the very cities it created, the engine that had long powered rapid urban growth sputtered and wheezed. The relatively high wages for entry level industrial work had been a key to the economic health of cities, creating significant multiplier effects. Working class families spent their share of income to rent or purchase housing, support churches and civic clubs, procure groceries and clothes and other household goods from shops, and pay municipal taxes for schools, libraries, road construction, water and sewer installation, and other services. By the 1970s and 1980s, however, this economy began to unravel as the more highly paid and mobile workers took their earnings elsewhere, manufacturing wages grew stagnant, and entry level factory jobs disappeared. Industrial production was grinding to a halt in the U.S. Northeast and Midwest, the Ruhr Valley in Germany, the automobile belt of Northern Italy, Belgium's Wallonia region, the mines and docklands of the United Kingdom, the steel mills of Alsace-Lorraine (Martin and Rowthorn 1986; Chant and Goodman 2000; Annesley 2004; Raggi 2019).
Fig. 6. Women protesting mine closures in Barnsely, UK, 1984. From the iTV archives.
Local governments could only watch in anguish as their cities bled jobs, wages, and taxes. Factories shuttered and warehouses emptied. Terminals and docks idled. If the will and ambition survived, the capital and resources fled elsewhere. From St. Louis to Sheffield, from Youngstown to Flint, Lyon, Cleveland, Gdansk, Turin, Gary, Düsseldorf, Scranton, and Liège, the old industrial cores grew dormant. Ways of life that had grown thick and resonant with attachment to place over time faced dissolution and collapse.
This large-scale flight of capital and manufacturing created a shared post-industrial culture between Europe and the United States, where cities both learned from and competed against one another in their bid for economic regeneration (Savitch 1989; Chant and Goodman 2000; Breitbart 2013; Loures 2015). However, post-industrial regeneration of U.S. cities proved far less even than in Europe. This has to do with two key factors in American policy and political culture: long-standing ambivalence toward cities, and racial discrimination. Cities in the U.S., for example, have to raise most of their revenues through property taxation; they receive relatively small amounts of funding from the federal government, compared to France, Germany, the Netherlands, or Japan (Powell and Hendricks 2009). Cities in the U.S. are creatures of State governments, with a firewall between municipalities and the federal level. Thus, there has never been a national or regional economic planning system in the U.S. that might mitigate the worst impacts of deindustrialization. The result of this structure of governance is that U.S. cities are left largely to their own devices in their struggles to chart a future amid rapid decline in tax revenues from fixed capital investment, often leading to a 'race to the bottom' of intercity competition over resources.
The unimpeded growth of neoliberal policies in the U.S. since the 1980s has meant that reinvestment largely follow the pattern of 'public-private partnerships,' where private corporate interests assume the lead role and reap the lion's share of benefits (CITE). Regeneration efforts undertaken within this regime of governance have generally excluded inner city neighborhoods decimated by capital flight, favoring central place locations and large-scale construction schemes with guaranteed returns on investment. Desperate for investment from the loss of tax base, most cities have had little choice but to accept the dubious claim of 'trickle-down economics,' where allowing developers carte blanche and the rich to accumulate more wealth will somehow create jobs that improve the lives of working-class people and thus the economic health of what we call 'post-industrial cities' (Smith 1986; Squires 1994; Hackworth 2014).
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