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Wednesday, August 06, 2008

The Death of the Industrial Heartland Continues Unabated

According to Forbes magazine, the fastest-dying cities in the United Stated are:

Buffalo, New York
Canton, Ohio
Charleston, West Virginia
Cleveland, Ohio
Dayton, Ohio
Detroit, Michigan
Flint, Michigan
Scranton, Pennsylvania
Springfield, Massachusetts
Youngstown, Ohio

How did Forbes determine just which cities are on life support? By looking at economic growth, population trends and unemployment rates. In each of these cities, the economies grew sluggishly, at far less than the national average, while the unemployment rates far exceeded those around the rest of the country. So its no surprise that all of the cities on the list are experiencing serious population declines.

Look at the list: These were steeltowns and coaltowns, auto manufacturers, the heart of blue-collar America. Only Charleston really stands outside the rust-belt. Replace it with Pittsburgh, which has seen the biggest population decline in the nation outside New Orleans, and the picture is awfully clear. And it is awful.

The real common denominator for these cities is the same problem that plagues all modern industrialized societies. Cities that were built on the strength of manufacturing and industry face inexorable decline as those industries depart for cheaper labour and big economies of scale overseas.

It isn't new, and it isn't going to stop any time soon. Before the industrial revolution was half a century old, manufacturing had begun to shift. And over time, the location of the cheapest labour sources has shifted this manufacturing base again and again. From Korea to Taiwan to India and mainland China, to Indonesia and Bangladesh.

Some politicians and media types would argue that our governments need to bolster manufacturing in North America. Others argue that unions and big government are precisely the problem (though I do wonder what those folks think life before unions was really like and if they'd like to give a job at a 19th century coal mine a go).

As for me, I don't have an answer for these cities - because I'm not convinced there is one. It would be great if they all became knowledge economies like Palo Alto and Austin. But that doesn't happen quickly and takes a great deal of commitment and political will.

One possible ray of light? There is always the chance that as we start to run out of oil, it will actually become less expensive to manufacture for the North American market close to home instead of overseas. But factor in Mexico, and things look dim indeed.


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