Culture War, Economy

Deindustrialization Isn’t (Just) a White Working-Class Problem

Support for struggling communities can transcend our racial divide.
November 12, 2019
Featured Image
CHICAGO, ILLINOIS - JUNE 24: Workers assemble Ford vehicles at the Chicago Assembly Plant on June 24, 2019 in Chicago, Illinois. Ford recently invested $1 billion to upgrade the facility where they build the Ford Explorer, Police Interceptor Utility and the Lincoln Aviator. (Photo by Scott Olson/Getty Images)

The 2016 presidential election brought renewed attention to the plight of rural communities grappling with the decline of American manufacturing. Trump’s attacks on “globalists” struck a chord with voters who lost their jobs to off-shoring, not to mention those who had lost loved ones in the ensuing opioid epidemic. But the media’s portrayal of the struggles of rural Americans as a white working-class problem is deeply misleading. Indeed, African Americans were in a sense the original and most severe victims of deindustrialization. This fact suggests that working-class people of all stripes have more in common than our political discourse tends to recognize.

Manufacturing has historically provided good jobs for workers without higher education. In the early 20th century, for instance, manufacturing work helped lift less educated Irish and Italian immigrants into the middle class. The same was beginning to be true for African Americans following the civil rights movement. Black high school graduation rates were finally converging with whites by the early 1970. Yet tragically, the 1970s also marked the peak of U.S. manufacturing employment and the end of socio-economic convergence between blacks and whites.

While it’s easy to see the impact of a small town factory that moves overseas, it’s much harder to imagine the counterfactual in which the same jobs never existed in the first place. Yet this was the reality for many African Americans, whose educational attainment caught up at precisely the time when the demands of the global economy pulled away.

Deindustrialization has negatively impacted black and white workers alike, but white Americans have historically recovered more easily from displacement thanks to existing social networks and status. Economists Patrick Bayer and Kerwin Kofi Charles have found that the earnings gap between black and white workers shrank between 1940-1970, but widened again after that. Other researchers have reached similar conclusions. The shocking fact is that no progress has been made in reducing income and wealth inequalities between black and white households over the past 50 years.

The end of convergence between white and black households also coincided with slowing convergence between Northern and Southern states. Indeed, contrary to popular belief, the most severe effects of the China Shock — the sudden collapse in manufacturing employment in the early 2000s — occurred not in the Rust Belt, but in South Atlantic states. As MIT economist David Autor has shown, deindustrialization began in the North decades earlier, when manufacturing moved south to take advantage of lower labor costs. The labor-intensity of Southern manufacturers left their workers particularly vulnerable to import competition, helping to explain why the China Shock was so shocking.

The economist Eric Gould explains that the “disappearance of manufacturing work may not have only lowered socio-economic outcomes within each racial group, but increased inequality within each group as well.” His research finds that the loss of manufacturing jobs is associated with increasing rates of poverty and single motherhood for both black and white women, but with stronger effects for black women in both cases. Gould also finds that declining manufacturing employment increases the rates of black and white children in poverty, the percent of children raised in single-parent households, and child mortality rates before the age of 10. But here too, the effects are stronger for black children.

If these studies reveal anything, it is that the effects of deindustrialization aren’t uniform across race, gender, and location. And yet some common themes emerge. White or black, North or South, deindustrialization has hurt the economic prospects of men without a college education, reduced family formation and household stability, and undermined predictors of mental health.

In retrospect, even the legacy of slavery can be understood through the lens of deindustrialization. Plantations in the Cotton Belt treated human beings as literal machines, reducing the need for the South to industrialize as fast as the North. This “specialization” in labor-intensive production persisted long after the official end of slavery. Emancipation was, in a deeper sense, incomplete absent major catch-up investments in productivity-enhancing technology and infrastructure.

Alexander Hamilton worked for a West Indian import-export firm in his youth, where the limitations of a slave economy based on sugar cane exports were self-evident. This may have been the inspiration for his strong belief in federal programs to promote and develop America’s nascent manufacturing base. Unfortunately, the loss of particular American industries can’t be easily reversed. Nonetheless, in the spirit of Hamilton, we could do much more to identify and foster the emancipating technologies of the future.

While the economic distress connected to deindustrialization in white communities can be used to reinforce racial resentments, as the Trump presidency demonstrates, it also holds the potential for a new kind of cross-racial, working-class consciousness. The notions that the crack epidemic or high rates of black single motherhood were the results of personal failings or a backwards culture become less tenable when parallel phenomena manifest in deindustrializing white communities, too.

This doesn’t eliminate culture as a factor of social health. But it does point to a way out of the most divisive versions of our contemporary culture war. Indeed, policies that tackle deindustrialization head-on have the potential to unite working-class people of all racial, cultural, and regional backgrounds. And by jump-starting convergence in regional productivity, convergence on the  interests working people hold in common — spiritual and material — may follow closely behind.

Anuska Jain and Samuel Hammond

Samuel Hammond (@hamandcheese) is the director of Poverty and Welfare Policy at the Niskanen Center.  Anuska Jain is a graduate of Smith College and intern with the Niskanen Center.