Rust Belt
The Rust Belt, formerly the Steel Belt or Factory Belt, is an area of the United States that underwent substantial industrial decline in the late 20th century. The region is centered in the Great Lakes and Mid Atlantic regions of the United States. Common definitions of the Rust Belt include Ohio, Indiana, Northern Illinois, southeastern Wisconsin, Michigan, Pennsylvania, and Upstate New York. Some broader geographic definitions of the region include parts of Central Illinois, Iowa, Kentucky, Maryland, Minnesota, Missouri, New Jersey, and West Virginia. The term "Rust Belt" is considered to be a pejorative by some people in the region.
Between the late 19th century and late 20th century, the Rust Belt formed the industrial heartland of the country, and its economies were largely based on iron and steel, automobile manufacturing, coal mining, and the processing of raw materials. The term "Rust Belt", derived from the substance rust, refers to the socially corrosive effects of economic decline, population loss, and urban decay attributable to deindustrialization. The term gained popularity in the U.S. beginning in the 1980s, when it was commonly contrasted with the Sun Belt, whose economy was then thriving.
The Rust Belt experienced industrial decline beginning in the 1950s and 1960s, with manufacturing peaking as a percentage of U.S. GDP in 1953 and declining incrementally in subsequent years and especially in the late 1970s and early 1980s. Demand for coal declined as industry turned to oil and natural gas, and U.S. steel was undercut by competition from Germany and Japan. High labor costs in the Rust Belt were also a factor in encouraging the region's heavy manufacturing companies to relocate to the Sun Belt or overseas or to discontinue entirely. The U.S. automotive industry also declined as consumers turned to fuel-efficient foreign-manufactured vehicles after the 1973 oil crisis raised the cost of gasoline and foreign auto manufacturers began opening factories in the U.S., which were largely not strongly unionized like the U.S. auto manufacturers in the Rust Belt. Families moved away from Rust Belt communities, leaving cities with falling tax revenues, declining infrastructure, and abandoned buildings. Major Rust Belt cities include Baltimore, Buffalo, Chicago, Cincinnati, Cleveland, Detroit, Milwaukee, Philadelphia, Pittsburgh, Rochester, and St. Louis. New England was also hit hard by industrial decline, but cities closer to the East Coast, including in the metropolitan areas of Boston, New York, and Washington, D.C. were able to quickly adapt by diversifying or transforming their economies, shifting to services, advanced manufacturing, and high-tech industries. Similarly, parts of cities otherwise unaffected by the Rust Belt declined as a result of industrial dependence; such as Gert Town in New Orleans and South Los Angeles.
Since the 1980s, presidential candidates have devoted much of their time to the economic concerns of the Rust Belt region, which includes several populous swing states, including Michigan, Ohio, Pennsylvania, and Wisconsin. These states were crucial to Republican Donald Trump's victories in the 2016 and 2024 presidential elections.
Background
In the 20th century, local economies in these states specialized in large-scale manufacturing of finished medium to heavy industrial and consumer products, and the transportation and processing of the raw materials required for heavy industry. The area was referred to as the Manufacturing Belt, Factory Belt, or Steel Belt as distinct from the agricultural Midwestern states forming the so-called Corn Belt and Great Plains states that are often called the "breadbasket of America".The flourishing industrial manufacturing in the region was caused in part by the proximity to the Great Lakes waterways, and abundance of paved roads, water canals, and railroads. After the transportation infrastructure linked the iron ore found in the so-called Iron Range of northern Minnesota, Wisconsin and Upper Michigan with the coking coal mined from the Appalachian Basin in Western Pennsylvania and Western Virginia, the Steel Belt was born. Soon it developed into the Factory Belt with its manufacturing cities: Chicago, Buffalo, Detroit, Milwaukee, Cincinnati, Toledo, Cleveland, St. Louis, Youngstown, and Pittsburgh, among others. This region for decades served as a magnet for immigrants from Austria-Hungary, Poland, and Russia, as well as Yugoslavia, Italy, and the Levant in some areas, who provided the industrial facilities with inexpensive labor. These migrants drawn by labor were also accompanied by African Americans during the Great Migration who were drawn by jobs and better economic opportunity.
Following 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 and social conditions. From 1979 to 1982, known as the Volcker shock, the U.S. Federal Reserve decided to raise the base interest rate in the United States to 19%. High-interest rates attracted wealthy foreign "hot money" into U.S. banks and caused the U.S. dollar to appreciate. This made U.S. products more expensive for foreigners to buy and also made imports much cheaper for Americans to purchase. The misaligned exchange rate was not rectified until 1986, by which time Japanese imports, in particular, had made rapid inroads into U.S. markets.
From 1987 to 1999, the U.S. stock market went into a stratospheric rise, and this continued to pull wealthy foreign money into U.S. banks, which biased the exchange rate against manufactured goods. Related issues include the decline of the iron and steel industry, the movement of manufacturing to the southeastern states with their lower labor costs, the layoffs due to the rise of automation in industrial processes, the decreased need for labor in making steel products, new organizational methods such as just-in-time manufacturing which allowed factories to maintain production with fewer workers, the internationalization of American business, and the liberalization of foreign trade policies due to globalization. Cities struggling with these conditions shared several difficulties, including population loss, lack of education, declining tax revenues, high unemployment and crime, drugs, swelling welfare rolls, deficit spending, and poor municipal credit ratings.
Geography
Since the term "Rust Belt" is used to refer to a set of economic and social conditions rather than to an overall geographical region of the U.S., the Rust Belt has no precise boundaries. The extent to which a community may have been described as a "Rust Belt city" depends on how great a role industrial manufacturing played in its local economy in the past and how it does now, as well as on perceptions of the economic viability and living standards of the present day.News media occasionally refer to a patchwork of defunct centers of heavy industry and manufacturing across the Great Lakes and Midwestern United States as the snow belt, the manufacturing belt, or the factory belt because of their vibrant industrial economies in the past. This includes most of the cities of the Midwest as far west as the Mississippi River, including St. Louis, and many of those in the Great Lakes and Northern New York. At the center of this expanse lies an area stretching from northern Indiana and southern Michigan in the west to Upstate New York in the east, where local tax revenues relied more heavily on manufacturing than on any other sector.
Prior to World War II, cities in the Rust Belt region were among the largest in the U.S. However, by the end of the 20th century, their population had fallen the most in the country.
History
The linking of the former Northwest Territory with the once-rapidly industrializing East Coast was effected through several large-scale infrastructural projects, 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 Railroad following the end of the American Civil War in 1875. A gate was opened between a variety of burgeoning industries on the interior North American continent and the markets of large East Coast cities and Western Europe.Coal, iron ore, and other raw materials were shipped in from surrounding regions which emerged as major ports on the Great Lakes and served as transportation hubs for the region with 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 was a rural trading post in the 1840s but grew to be as big as Paris by the time of the 1893 Columbian 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 U.S., 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.
In the first half of the 20th century, the Great Depression followed by American entry into World War II was followed by a rapid return to economic growth, during which much of the industrial North reached its peak population and industrial output.
The northern cities experienced changes that followed the end of World War II, with the onset of the outward migration of residents to newer suburban communities, and the declining role of manufacturing in the American economy.
Between 1969 and 1996 manufacturing employment declined by 32.9% in the Rust Belt, leading to severe dislocations in cities specialized in manufacturing. Imported goods such as steel cost much less to produce in Third World countries with cheap foreign labor. The introduction of pollution regulation in the late 1960's, combined with rapidly increasing U.S. energy costs caused much U.S. heavy industry to begin moving to other countries. Beginning with the recession of 1970–71, a new pattern of deindustrializing economy emerged. Competitive devaluation combined with each successive downturn saw traditional U.S. manufacturing workers experiencing lay-offs. In general, in the Factory Belt employment in the manufacturing sector declined by 32.9% between 1969 and 1996.
In 1984, an incremental expansion of the U.S. trade deficit with China began combined with growing trade deficits with Japan, South Korea, and Taiwan. 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.