For a cautionary tale, communities hard-hit by the current recession don’t have to look much further than Youngstown, Ohio.
Like many other manufacturing-dependent cities struggling in this recession, Youngstown’s economy was once booming mainly because of the success of one dominant industry. And also like those cities, Youngstown saw its fortunes fall fast and hard when that industry suddenly bottomed out, leaving many of its residents jobless and unsure what to do next.
More than three decades later, Youngstown is still struggling to recover from a severe contraction in the steel industry, which cost the area tens of thousands of jobs beginning in the late 1970s. The metropolitan area is in many ways a shadow of its former self; between 2000 and 2008 alone, the population dropped by around 37,000 people, or 6.1 percent. The city itself has seen its population decline by nearly half, from about 140,000 in 1970 to about 74,000 in 2007, according to the U.S. Census Bureau.
"We waited far too long to establish a vision for Youngstown," said Youngstown Mayor Jay Williams.
Williams is a major proponent of an aggressive plan, called Youngstown 2010, to shrink the city to fit its current demographics, reduce crime and attract new businesses. "Up until I'd say 10 years ago, we were holding on to the notion that somehow steel was going to return," he said.
Other cities around the country, including Elkhart, Ind., are feverishly hoping to avoid Youngstown's fate.
The Elkhart area, about 300 miles west of Youngstown, has suffered from a severe downturn in the recreational vehicle industry, which provided as many as one in four jobs before the recession. As the recession has taken hold, the industry has been hit hard by high gas prices, the credit crunch and a drop in consumer spending.
Already, there are early concerns about how that might affect Elkhart County's population base, currently at around 200,000. Elkhart County, which was once projected to be among the fastest-growing areas in Indiana, saw a net total of 1,200 people leave for other U.S. cities between 2007 and 2008. Still, the population has continued to grow because of new births and international migration.
The ripple effect of losing a major industry can be substantial and hard to reverse. When people lose their jobs and leave, they leave behind abandoned homes, a declining tax base and a drop in charitable giving and community support — all of which can make it harder to recruit the kind of businesses that could revive the growth of an economy and population.
“It’s a concern to the people of Elkhart County,” said Matt Kinghorn, economic research analyst with the Indiana Business Research Center. “A constant flow of people, in terms of population growth, is a symptom of economic opportunity.”
From Steeltown to what?
Other onetime manufacturing hubs, including Buffalo, N.Y.; Muncie, Ind.; Cleveland and Pittsburgh, have seen their populations shrink as local industry has declined. A few cities, such as Allentown, Pa., have bucked the trend in part because they were able to establish a diverse group of other industries to fuel economic and population growth.
Such diversification is not easy. Experts say communities that successfully recover from the loss of a major industry often spend years, if not decades, finding employers to replace an industry in severe decline. They also must successfully navigate the more elusive issue of redefining their identity without that signature employer.
“Youngstown’s nickname was Steeltown, and it had been for 75 years, so that’s how people defined what this place was,” said Sherry Linkon, co-director of the Center for Working-Class Studies at Youngstown State University and co-author of “Steeltown USA: Work and Memory in Youngstown.”
“The week that Youngstown Sheet and Tube announced it was closing, in September 1977, (there were) people saying, ‘What is Youngstown now? If we’re not a steel town, what are we?’ And that has continued to be a struggle in this community.”
Elkhart, long dubbed the RV Capital of the World, has relished its identity as a hub for RV manufacturers and a vast array of small suppliers. Although Elkhart also has been associated with the manufacturing of other products, including musical instruments, the RV industry has in recent years emerged as the dominant player because other companies have shrunk or moved away.
As the RV industry has declined, community leaders have scrambled to find new tenants for the vacant, low-slung manufacturing facilities, and new jobs for the approximately 17.8 percent of the population that is unemployed. Everything from green jobs to fish farming has been considered.
The people of Youngstown know that state of flux only too well. In the years following the devastating 1977 steel mill announcement, the city lost thousands of well-paying manufacturing jobs. Community leaders struggled to come up with a plan to save the city, with some at one point advocating for community members to pool their money and buy a mill themselves.
Sean Safford, an assistant professor at the Booth School of Business at the University of Chicago, and author of “Why the Garden Club Couldn’t Save Youngstown,” believes Youngstown failed in its early recovery efforts in part because civic and business leaders were not able to work together on a cohesive plan.
“This kind of a crisis can kind of bring together … the political and business leaders of a community, or it can drive them apart,” Safford said. “The difference between surviving and not really comes down to that.”
Linkon said another major hurdle for Youngstown was that the city had for so long been dependent on one industry that it was hard to shake the mentality of looking for that next big employer, be it a race track, a jail system or even a blimp factory, all of which were floated.
“It leads to the expectation that a single industry is going to be your savior,” Linkon said.
Williams, the city's 37-year-old mayor, witnessed firsthand the missteps of his predecessors and the city's decline as he grew up in Youngstown in the 1970s and 1980s.
“There was just this void that existed, and people were saying, ‘Well, if it’s not steel there’s going to be some other silver bullet,’” Williams said. “While other cities recognized it and moved on. … In Youngstown we waited, and in that void a lot of bad things came in.”
Now Youngstown has finally faced the stark reality that the city, designed to accommodate as many as 250,000 people, must shrink to fit about 80,000 people, Williams said.
A key premise of the plan is that the city is taking its destiny into its own hands, rather than waiting for an employer or the government to offer funding or solutions.
“Nobody is going to do this for us. We’re going to have to do this,” said Bill D’Avignon, Youngstown’s director of community development and planning.
One major effort involves helping shift people who live in areas of the city that are largely run-down and abandoned to areas that are more robust, so the city can focus its resources on the better neighborhoods. So far, D’Avignon concedes, that effort hasn’t been too successful.
The city also has torn down nearly 1,000 homes in the last few years, and hopes to remove another 400 using federal money.
Youngstown has celebrated some successes, including establishing a successful downtown business incubator. But it has had some setbacks, including the delay of several economic development projects because of the recession.
“It is a long, difficult, tedious, but very necessary process,” said Williams, the mayor.
On the plus side, Williams said the years of economic woes have left the city well-prepared to handle the impact of the recession.
“I’ve been telling my fellow mayors, ‘Welcome to a day in the life of Youngstown,’” Williams said. “We’ve become sort of adroit at managing crisis.”
‘A perfect opportunity’
In Elkhart, some community leaders did try to bring in other businesses long before the RV industry began its downturn, but they found it difficult precisely because the RV industry was doing so well. That meant that other potential employers worried they wouldn’t find the facilities and workers they needed.
Now, experts say Elkhart can look at the recession as an opportunity to make the necessary changes that cities like Youngstown didn’t, and avoid the devastating population declines that have hurt Youngstown so badly.
“Assuming that the RV industry will rebound, it probably won’t rebound to its previous levels,” said Kinghorn of the Indiana Business Research Center. “This is a perfect opportunity for leaders to look for diversification.”
Still, even cities that have successfully diversified concede it can take years, or even decades, for those efforts to pay off. The residents of the Lehigh Valley, which includes Allentown, Pa., realized that their fate was too closely tied to the steel mills as far back as 1959, when a major steel strike served as a sobering wake-up call, said longtime resident Bruce E. Davis.
Davis, an attorney who worked for Bethlehem Steel for 22 years before going into private practice in the 1980s, said the strike led some in the area to form the Lehigh Valley Industrial Park, an economic development effort centered on creating jobs not related to the manufacturing industry.
While such efforts allowed Allentown to weather the decline of the steel industry better than some other cities, it was still a long and sometimes painful process. Nevertheless, Davis said he hopes the residents of Elkhart can see this recession as the same type of wake-up call as that 1959 strike.
“Perhaps 50 years from now they can look back at this economic recession and say, ‘This is when we really began to create a new economy for Elkhart,’” Davis said.