Rust Belt
Encyclopedia
The Rust Belt is a term that gained currency in the 1980s as the informal description of an area straddling the Midwestern
and Northeastern United States
, in which local economies traditionally garnered an increased manufacturing
sector to add jobs and corporate profits. After several "boom" periods from the late-19th
to the mid-20th century, cities in this area struggled to adapt to a variety of adverse economic conditions later in the 20th century, such as the movement of manufacturing facilities to the southeastern states
with their lower labor costs, the rise of automation
in industrial processes, a decreased need for labor in making steel products, and the liberalization
of foreign trade policies. Places that struggled the most with these conditions soon encountered several difficulties in common, including population loss
, depletion of local tax revenues, and chronic high unemployment.
A partial deindustrialization
effect on the industrial North has been uneven in terms of geography and social class. Some regions, particularly along the Eastern Seaboard
, saw an offset from an increased service sector. Problems associated with the Rust Belt persist elsewhere, particularly around the eastern Great Lakes
, and many once-booming cities slowed economically on average in the latter half of the 20th century. Together with the neighboring Golden Horseshoe
of Southern Ontario, Canada, cities in this area still compose one of the world's three pre-eminent manufacturing regions. Manufacturing recovered faster from the late-2000s recession than other sectors of the economy, and a number of initiatives, both public and private, are encouraging the development of alternative fuel technologies.
may have been described as a Rust Belt city depends at least as much on how great a role industrial manufacturing has played in its local economy—and, moreover, on how well it has adapted to the decline of manufacturing—as it does on geography alone.
A patchwork of cities across the northern United States, because of their vibrant industrial economies, were referred to collectively as "the Foundry of the Nation". These are also referred to as the Manufacturing Belt or the Factory Belt. This includes most of the cities of the Midwest out to the Mississippi River
, and many of those in the New England
and Mid-Atlantic states
, particularly those away from the Eastern Seaboard
. After World War II
, the cities in the area among the nation's 100 largest in the middle-20th century had population that had fallen most by the century's end.
At the center lies an area stretching from northern Indiana
and southern Michigan
in the west to Upstate New York
in the east, where local tax revenues still rely more heavily on manufacturing than on any other sector (by far the largest contiguous area of the U.S. where this is the case). At or near the periphery are four of the nation's largest metropolitan areas—New York
, Boston
, Philadelphia, and Chicago
—parts of which fall squarely within the Rust Belt while their core cities are not always considered as such.
In The Nine Nations of North America
(1981), journalist and law professor Joel Garreau included both the industrial northern U.S. and southern Ontario in a region named "The Foundry".
with the once-rapidly industrializing East Coast was effected through several large-scale infrastructural works
, most notably the Erie Canal
in 1825, the Baltimore and Ohio Railroad
in 1830, the Allegheny Portage Railroad
in 1834, and the consolidation of the New York Central
after the American Civil War
. A gate was thereby opened between a variety of burgeoning industries on the interior North American continent
and the markets not only of the large Eastern cities, but of Western Europe
as well. Coal, iron ore and other raw materials are shipped in from surrounding regions which emerged as major ports on the Great Lakes and served as transportation hubs for the region with a proximity to railroad lines. Coming in the other direction were millions of European immigrants, who populated the cities along the Great Lakes shores with then-unprecedented speed: Chicago, famously, was a rural trading post in the 1840s but grew to be as big as Paris
by the time of the 1893 Colombian Exposition.
Early signs of the difficulty in the northern states were evident early in the 20th century, before the "boom years" were even over. Lowell, Massachusetts
, once the center of textile production in the United States, was described in the magazine Harper's as "a depressed industrial desert" as early as 1931, as its textile concerns were being uprooted and sent southward, primarily to the Carolinas. After the Great Depression
, American entry into the Second World War
effected a rapid return to economic growth, during which much of the industrial North reached its peak in population and industrial output.
The northern cities experienced changes that followed the end of the war, with the onset of: the outward migration of residents to newer suburban communities.), and the declining role of manufacturing in the American economy
.
Outsourcing of manufacturing jobs in tradeable goods is an important issue in the region. One source has been globalization
and the expansion of worldwide free trade
agreements. Anti-globalization groups argue that trade with developing countries has resulted in stiff competition from countries such as China
which pegs its currency to the dollar and has much lower prevailing wages, forcing domestic wages to drift downward. Some economists are concerned that long-run effects of high trade deficits and outsourcing are a cause of economic problems in the U.S. with high external debt
(amount owed to foreign lenders) and a serious deterioration in the United States net international investment position
(NIIP) (-24% of GDP). Some economists contend that the U.S. is borrowing to fund consumption of imports while accumulating unsustainable amounts of debt. On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the United States to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much in some areas and can no longer rely on the financial sector and consumer spending to drive demand.
Since the 1960s
, the expansion of worldwide free trade
agreements have been less favorable to U.S. workers. Imported goods such as steel
cost much less to produce in third world
countries with cheap foreign labor (see steel crisis
). Beginning with the recession of 1970-71, a pattern emerged. Competitive devaluation combined with each successive downturn saw traditional U.S. manufacturing
workers experience lay-offs. Wealth-producing primary and secondary sector jobs such as those in manufacturing and computer software were often replaced by much-lower-paying wealth-consuming jobs such those in retail and government in the service sector when the economy recovered. A gradual expansion of the U.S. trade deficit with China began in 1985. In the ensuing years the U.S. developed a massive trade deficit with the Asian nations of China, Japan, Taiwan, and South Korea. As a result, the traditional manufacturing workers in the region have experienced economic upheaval. This effect has devastated government budgets across the U.S and increased corporate borrowing to fund retiree benefits. Some economists believe that GDP and employment can be dragged down by large long-run trade deficits.
A February 2009 report by the Economic Policy Institute
shows that unionization does not hinder international competitiveness, and may in fact encourage it A March 3, 2008 Wall Street Journal
editorial claimed that, while Ohio lost 10,000 jobs in the past decade, Texas created 1.6 million new jobs. The editorial stated, "Ohio's most crippling handicap may be that its politicians – and thus its employers – are still in the grip of such industrial unions as the United Auto Workers
. Ohio is a 'closed shop
' state, which means workers can be forced to join a union whether they wish to or not. Many companies – especially foreign-owned – say they will not even consider such locations for new sites. States with 'right to work
' laws that make union organizing more difficult had twice the job growth of Ohio and other closed shop states from 1995–2005, according to the National Institute for Labor Relations. Texas, for example, is a right to work
state and has been adding jobs by the tens of thousands. Nearly 1,000 new plants have been built in Texas since 2005, from the likes of Microsoft
, Samsung
and Fujitsu
. Foreign-owned companies supplied the state with 345,000 jobs." A September 13, 2008 opinion column by Phil Gramm
and Mike Solon stated, "Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas." Unfortunately, the jobs created in Texas are low paying. The state had a per capita income of $24, 318 as of 2009.
, and nanotech. Automation has led to other types of manufacturing output which require fewer workers with varying skills. Moreover, job gains in these areas have not been nearly enough to keep pace. As a result, middle class incomes and savings in the United States have been negatively impacted.
States in the Midwest have had to keep their tax structures competitive. A May 16, 2006 opinion column by Lawrence J. McQuillan and Hovannes Abramyan of the Pacific Research Institute
stated, "Jobs are flocking to low-tax states for a reason... The Pacific Research Institute has crunched the tax numbers in all 50 states and published the 'U.S. Economic Freedom Index' ranking all states according to how friendly or unfriendly their policies were toward free enterprise and consumer choice in 2004... In 2005, per capita personal income grew 31% faster in the 15 most economically free states than it did in the 15 states at the bottom of the list. And employment growth was a staggering 216% higher in the most free states."
Since the 1980s, presidential candidates have devoted much of their time to the economic concerns of the region, which contains the populous swing states
of Ohio
, Pennsylvania
, Michigan
and Wisconsin
.
Midwestern United States
The Midwestern United States is one of the four U.S. geographic regions defined by the United States Census Bureau, providing an official definition of the American Midwest....
and Northeastern United States
Northeastern United States
The Northeastern United States is a region of the United States as defined by the United States Census Bureau.-Composition:The region comprises nine states: the New England states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont; and the Mid-Atlantic states of New...
, in which local economies traditionally garnered an increased manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
sector to add jobs and corporate profits. After several "boom" periods from the late-19th
Gilded Age
In United States history, the Gilded Age refers to the era of rapid economic and population growth in the United States during the post–Civil War and post-Reconstruction eras of the late 19th century. The term "Gilded Age" was coined by Mark Twain and Charles Dudley Warner in their book The Gilded...
to the mid-20th century, cities in this area struggled to adapt to a variety of adverse economic conditions later in the 20th century, such as the movement of manufacturing facilities to the southeastern states
Southern United States
The Southern United States—commonly referred to as the American South, Dixie, or simply the South—constitutes a large distinctive area in the southeastern and south-central United States...
with their lower labor costs, the rise of automation
Automation
Automation is the use of control systems and information technologies to reduce the need for human work in the production of goods and services. In the scope of industrialization, automation is a step beyond mechanization...
in industrial processes, a decreased need for labor in making steel products, and the liberalization
Liberalization
In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...
of foreign trade policies. Places that struggled the most with these conditions soon encountered several difficulties in common, including population loss
Shrinking cities
Shrinking cities are cities that are experiencing acute population loss. Deindustrialisation and out-migration are some of the common reasons that cities shrink. In the United States, this problem is most commonly associated with the Rust Belt, while parts of Eastern Europe also experience similar...
, depletion of local tax revenues, and chronic high unemployment.
A partial deindustrialization
Deindustrialization
Deindustrialization is a process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially heavy industry or manufacturing industry. It is an opposite of industrialization.- Multiple interpretations :There are multiple...
effect on the industrial North has been uneven in terms of geography and social class. Some regions, particularly along the Eastern Seaboard
East Coast of the United States
The East Coast of the United States, also known as the Eastern Seaboard, refers to the easternmost coastal states in the United States, which touch the Atlantic Ocean and stretch up to Canada. The term includes the U.S...
, saw an offset from an increased service sector. Problems associated with the Rust Belt persist elsewhere, particularly around the eastern Great Lakes
Great Lakes region (North America)
The Great Lakes region of North America, occasionally known as the Third Coast or the Fresh Coast , includes the eight U.S. states of Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania and Wisconsin as well as the Canadian province of Ontario...
, and many once-booming cities slowed economically on average in the latter half of the 20th century. Together with the neighboring Golden Horseshoe
Golden Horseshoe
The Golden Horseshoe is a densely populated and industrialized region centred around the Greater Toronto Area at the western end of Lake Ontario in Southern Ontario, Canada, with outer boundaries stretching south to Lake Erie and north to Georgian Bay. Most of it is also part of the Quebec City...
of Southern Ontario, Canada, cities in this area still compose one of the world's three pre-eminent manufacturing regions. Manufacturing recovered faster from the late-2000s recession than other sectors of the economy, and a number of initiatives, both public and private, are encouraging the development of alternative fuel technologies.
Geography
Since the term described a set of economic and social conditions rather than denote a region of the United States per se, the Rust Belt has no precise boundaries. The extent to which a community within the northern United StatesNorthern United States
Northern United States, also sometimes the North, may refer to:* A particular grouping of states or regions of the United States of America. The United States Census Bureau divides some of the northernmost United States into the Midwest Region and the Northeast Region...
may have been described as a Rust Belt city depends at least as much on how great a role industrial manufacturing has played in its local economy—and, moreover, on how well it has adapted to the decline of manufacturing—as it does on geography alone.
A patchwork of cities across the northern United States, because of their vibrant industrial economies, were referred to collectively as "the Foundry of the Nation". These are also referred to as the Manufacturing Belt or the Factory Belt. This includes most of the cities of the Midwest out to the Mississippi River
Mississippi River
The Mississippi River is the largest river system in North America. Flowing entirely in the United States, this river rises in western Minnesota and meanders slowly southwards for to the Mississippi River Delta at the Gulf of Mexico. With its many tributaries, the Mississippi's watershed drains...
, and many of those in the New England
New England
New England is a region in the northeastern corner of the United States consisting of the six states of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut...
and Mid-Atlantic states
Mid-Atlantic States
The Mid-Atlantic states, also called middle Atlantic states or simply the mid Atlantic, form a region of the United States generally located between New England and the South...
, particularly those away from the Eastern Seaboard
East Coast of the United States
The East Coast of the United States, also known as the Eastern Seaboard, refers to the easternmost coastal states in the United States, which touch the Atlantic Ocean and stretch up to Canada. The term includes the U.S...
. After World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, the cities in the area among the nation's 100 largest in the middle-20th century had population that had fallen most by the century's end.
At the center lies an area stretching from northern Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
and southern Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
in the west to Upstate New York
Upstate New York
Upstate New York is the region of the U.S. state of New York that is located north of the core of the New York metropolitan area.-Definition:There is no clear or official boundary between Upstate New York and Downstate New York...
in the east, where local tax revenues still rely more heavily on manufacturing than on any other sector (by far the largest contiguous area of the U.S. where this is the case). At or near the periphery are four of the nation's largest metropolitan areas—New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
, Philadelphia, and Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
—parts of which fall squarely within the Rust Belt while their core cities are not always considered as such.
In The Nine Nations of North America
The Nine Nations of North America
The Nine Nations of North America is a book written in 1981 by Joel Garreau. In it, Garreau suggests that North America can be divided into nine regions, or "nations", which have distinctive economic and cultural features...
(1981), journalist and law professor Joel Garreau included both the industrial northern U.S. and southern Ontario in a region named "The Foundry".
History
The linking of the former Northwest TerritoryNorthwest Territory
The Territory Northwest of the River Ohio, more commonly known as the Northwest Territory, was an organized incorporated territory of the United States that existed from July 13, 1787, until March 1, 1803, when the southeastern portion of the territory was admitted to the Union as the state of Ohio...
with the once-rapidly industrializing East Coast was effected through several large-scale infrastructural works
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
, most notably the Erie Canal
Erie Canal
The Erie Canal is a waterway in New York that runs about from Albany, New York, on the Hudson River to Buffalo, New York, at Lake Erie, completing a navigable water route from the Atlantic Ocean to the Great Lakes. The canal contains 36 locks and encompasses a total elevation differential of...
in 1825, the Baltimore and Ohio Railroad
Baltimore and Ohio Railroad
The Baltimore and Ohio Railroad was one of the oldest railroads in the United States and the first common carrier railroad. It came into being mostly because the city of Baltimore wanted to compete with the newly constructed Erie Canal and another canal being proposed by Pennsylvania, which...
in 1830, the Allegheny Portage Railroad
Allegheny Portage Railroad
The Allegheny Portage Railroad was the first railroad constructed through the Allegheny Mountains in central Pennsylvania, United States. It was a series of 10 inclines, approximately long, and operated from 1834 to 1854...
in 1834, and the consolidation of the New York Central
New York Central Railroad
The New York Central Railroad , known simply as the New York Central in its publicity, was a railroad operating in the Northeastern United States...
after the American Civil War
American Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
. A gate was thereby opened between a variety of burgeoning industries on the interior North American continent
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
and the markets not only of the large Eastern cities, but of Western Europe
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
as well. Coal, iron ore and other raw materials are shipped in from surrounding regions which emerged as major ports on the Great Lakes and served as transportation hubs for the region with a proximity to railroad lines. Coming in the other direction were millions of European immigrants, who populated the cities along the Great Lakes shores with then-unprecedented speed: Chicago, famously, was a rural trading post in the 1840s but grew to be as big as Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
by the time of the 1893 Colombian Exposition.
Early signs of the difficulty in the northern states were evident early in the 20th century, before the "boom years" were even over. Lowell, Massachusetts
Lowell, Massachusetts
Lowell is a city in Middlesex County, Massachusetts, USA. According to the 2010 census, the city's population was 106,519. It is the fourth largest city in the state. Lowell and Cambridge are the county seats of Middlesex County...
, once the center of textile production in the United States, was described in the magazine Harper's as "a depressed industrial desert" as early as 1931, as its textile concerns were being uprooted and sent southward, primarily to the Carolinas. After the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, American entry into the Second World War
Military history of the United States during World War II
The military history of the United States during World War II covers the involvement of the United States during World War II. The Empire of Japan declared war on the United States of America on 7 December 1941, immediately after the attack on Pearl Harbor on the same day. On 11 December 1941,...
effected a rapid return to economic growth, during which much of the industrial North reached its peak in population and industrial output.
The northern cities experienced changes that followed the end of the war, with the onset of: the outward migration of residents to newer suburban communities.), and the declining role of manufacturing in the American economy
Economy of the United States
The economy of the United States is the world's largest national economy. Its nominal GDP was estimated to be nearly $14.5 trillion in 2010, approximately a quarter of nominal global GDP. The European Union has a larger collective economy, but is not a single nation...
.
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
and the expansion of worldwide free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
agreements. Anti-globalization groups argue that trade with developing countries has resulted in stiff competition from countries such as China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
which pegs its currency to the dollar and has much lower prevailing wages, forcing domestic wages to drift downward. Some economists are concerned that long-run effects of high trade deficits and outsourcing are a cause of economic problems in the U.S. with high external debt
External debt
External debt is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such...
(amount owed to foreign lenders) and a serious deterioration in the United States net international investment position
Net international investment position
The difference between a country's external financial assets and its liabilities is the net international investment position . Both public and private held external assets and liabilities by legal residents of the respective country are hereby taken into account...
(NIIP) (-24% of GDP). Some economists contend that the U.S. is borrowing to fund consumption of imports while accumulating unsustainable amounts of debt. On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the United States to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much in some areas and can no longer rely on the financial sector and consumer spending to drive demand.
Since the 1960s
1960s
The 1960s was the decade that started on January 1, 1960, and ended on December 31, 1969. It was the seventh decade of the 20th century.The 1960s term also refers to an era more often called The Sixties, denoting the complex of inter-related cultural and political trends across the globe...
, the expansion of worldwide free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
agreements have been less favorable to U.S. workers. Imported goods such as steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
cost much less to produce in third world
Third World
The term Third World arose during the Cold War to define countries that remained non-aligned with either capitalism and NATO , or communism and the Soviet Union...
countries with cheap foreign labor (see steel crisis
Steel crisis
The steel crisis was a recession in the global steel market during the 1970s recession, following the end of the post-World War II economic boom and the 1973 oil crisis....
). Beginning with the recession of 1970-71, a pattern emerged. Competitive devaluation combined with each successive downturn saw traditional U.S. manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
workers experience lay-offs. Wealth-producing primary and secondary sector jobs such as those in manufacturing and computer software were often replaced by much-lower-paying wealth-consuming jobs such those in retail and government in the service sector when the economy recovered. A gradual expansion of the U.S. trade deficit with China began in 1985. In the ensuing years the U.S. developed a massive trade deficit with the Asian nations of China, Japan, Taiwan, and South Korea. As a result, the traditional manufacturing workers in the region have experienced economic upheaval. This effect has devastated government budgets across the U.S and increased corporate borrowing to fund retiree benefits. Some economists believe that GDP and employment can be dragged down by large long-run trade deficits.
A February 2009 report by the Economic Policy Institute
Economic Policy Institute
The Economic Policy Institute is a 501 non-profit, liberal, nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy...
shows that unionization does not hinder international competitiveness, and may in fact encourage it A March 3, 2008 Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
editorial claimed that, while Ohio lost 10,000 jobs in the past decade, Texas created 1.6 million new jobs. The editorial stated, "Ohio's most crippling handicap may be that its politicians – and thus its employers – are still in the grip of such industrial unions as the United Auto Workers
United Auto Workers
The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, better known as the United Auto Workers , is a labor union which represents workers in the United States and Puerto Rico, and formerly in Canada. Founded as part of the Congress of Industrial...
. Ohio is a 'closed shop
Closed shop
A closed shop is a form of union security agreement under which the employer agrees to hire union members only, and employees must remain members of the union at all times in order to remain employed....
' state, which means workers can be forced to join a union whether they wish to or not. Many companies – especially foreign-owned – say they will not even consider such locations for new sites. States with 'right to work
Right-to-work law
Right-to-work laws are statutes enforced in twenty-two U.S. states, mostly in the southern or western U.S., allowed under provisions of the federal Taft–Hartley Act, which prohibit agreements between labor unions and employers that make membership, payment of union dues, or fees a condition of...
' laws that make union organizing more difficult had twice the job growth of Ohio and other closed shop states from 1995–2005, according to the National Institute for Labor Relations. Texas, for example, is a right to work
Right-to-work law
Right-to-work laws are statutes enforced in twenty-two U.S. states, mostly in the southern or western U.S., allowed under provisions of the federal Taft–Hartley Act, which prohibit agreements between labor unions and employers that make membership, payment of union dues, or fees a condition of...
state and has been adding jobs by the tens of thousands. Nearly 1,000 new plants have been built in Texas since 2005, from the likes of Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, Samsung
Samsung
The Samsung Group is a South Korean multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea...
and Fujitsu
Fujitsu
is a Japanese multinational information technology equipment and services company headquartered in Tokyo, Japan. It is the world's third-largest IT services provider measured by revenues....
. Foreign-owned companies supplied the state with 345,000 jobs." A September 13, 2008 opinion column by Phil Gramm
Phil Gramm
William Philip "Phil" Gramm is an American economist and politician, who has served as a Democratic Congressman , a Republican Congressman and a Republican Senator from Texas...
and Mike Solon stated, "Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas." Unfortunately, the jobs created in Texas are low paying. The state had a per capita income of $24, 318 as of 2009.
Transformation
Other types of advanced manufacturing have emerged in these states such as biotech, infotechInformation technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
, and nanotech. Automation has led to other types of manufacturing output which require fewer workers with varying skills. Moreover, job gains in these areas have not been nearly enough to keep pace. As a result, middle class incomes and savings in the United States have been negatively impacted.
States in the Midwest have had to keep their tax structures competitive. A May 16, 2006 opinion column by Lawrence J. McQuillan and Hovannes Abramyan of the Pacific Research Institute
Pacific Research Institute
The Pacific Research Institute , or officially the Pacific Research Institute for Public Policy, is a California-based free-market think tank founded in 1979 whose stated vision is the promotion of "the principles of individual freedom and personal responsibility"...
stated, "Jobs are flocking to low-tax states for a reason... The Pacific Research Institute has crunched the tax numbers in all 50 states and published the 'U.S. Economic Freedom Index' ranking all states according to how friendly or unfriendly their policies were toward free enterprise and consumer choice in 2004... In 2005, per capita personal income grew 31% faster in the 15 most economically free states than it did in the 15 states at the bottom of the list. And employment growth was a staggering 216% higher in the most free states."
Since the 1980s, presidential candidates have devoted much of their time to the economic concerns of the region, which contains the populous swing states
Swing state
In United States presidential politics, a swing state is a state in which no single candidate or party has overwhelming support in securing that state's electoral college votes...
of Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
, Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
, Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
and Wisconsin
Wisconsin
Wisconsin is a U.S. state located in the north-central United States and is part of the Midwest. It is bordered by Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michigan to the northeast, and Lake Superior to the north. Wisconsin's capital is...
.