American manufacturing: The two worlds of deindustrialisation

Courtesy of The Economist. BY C.W.

INDIANA is a state of economic contrasts. Indianapolis, its biggest city, is dominated by thriving high-tech industries such as aerospace and chemical manufacturing. Its third Congressional district has the highest proportion of the workforce employed in manufacturing of any district in the country. A few hours’ drive away, though, lies Gary. Since the collapse of its steel industry in the 1980s, the city’s economy has imploded. The poverty rate is extremely high. On a Sunday afternoon, Gary’s main street was nearly deserted; most of the shops were boarded up.

Indianapolis and Gary are two extremes. But such contrasts are indicative of the state of American manufacturing as a whole. The country makes some of the most advanced technologies in the world. But, contrary to reports of an American manufacturing “renaissance”, that prosperity is not spread out. Many areas still struggle. And that is very difficult to change.

Once upon a time, lots of Americans spent their lives making things. Manufacturing’s golden years were the late 1970s, when employment in the sector hit nearly 20m (see chart). From then until the millennium, though, the number of jobs dropped by around 2m. Foreign competition took its toll. Then the recession came, which for many firms turned out to be a killer blow. Since then, things have only been a little better.

Read more here.

Share this post