The term "Rust Belt" refers to an economic region in the northeast United States, roughly covering the states of Michigan, Wisconsin, Indiana, Illinois, Ohio, and Pennsylvania, a region known as the manufacturing heartland of the nation. Many of the factories and steel mills that produced the "American economic miracle" during and after World War II (1939–1945) were padlocking their gates by the 1970s. This was more than a downward phase in the business cycle. It was a structural crisis brought about by the aging of a generation of factories, the relative decline of the manufacturing sector, and increased global competition. The crisis brought unemployment to workers, and increased police and welfare costs to cities at the same time that it signaled a decline in tax revenues. When the factories shut down, the cities lost corporate and property tax revenues as workers followed jobs to the suburbs or to other parts of the country.
The term "Rust Belt" thus refers to a social crisis mostly affecting the cities. During the 1970s and 1980s, rust belt cities experienced deepening unemployment, out-migration of population, loss of electoral votes, and an overall decline in industry and the economy. Smaller industrial plants relocated to Mexico or to low-wage American Sun Belt states. Big steel companies dating from the nineteenth century, like Bethlehem Steel and U.S. Steel Co., became industrial dinosaurs in the mid-twentieth century, made obsolete by technological advances and competition from Japan and Germany (whose plants mostly dated from the post-World War II period).
One typical Rust Belt story is the Dodge Main plant in Hamtramck, Michigan, an older industrial suburb of Detroit. Built in 1910, Dodge Main for decades was the "flag ship" factory of Chrysler Motors Corporation. Because land was at a premium when the plant was built, it was six stories tall—a problem for assembly line production as the partially assembled units had to go from floor to floor. By the 1960s, as single story factories were being built in the suburbs or rural areas, the Dodge Main plant was obsolete. The plant was also the site of racial and union militancy, as African American workers formed the "Dodge Revolutionary Union Movement" (DRUM) to counter racial discrimination in the workplace and in the union.
By the early 1970s scores of factories that had once made up the Detroit skyline during the automotive boom were either razed or slated for destruction. The Chrysler Corporation in 1979 had to be bailed out of bankruptcy by the federal government and by concessions from its employees. The company revived, but Dodge Main went under the wrecker's ball in 1981.
By the mid-1980s, the Rust Belt began to recharge. Steel mills and factories retooled, making the transition from outdated, inefficient, and often unsafe facilities to innovative and progressive ones. This transformation was accompanied by downsizing and deregulation, which contributed to job insecurity for workers. Nevertheless, with these changes the name "Rust Belt" began to drop from common usage. By 1996, the double-digit unemployment rates of the 1970s had fallen to 4.4 percent. Some former Rust Belt states like Michigan began to experience lower average unemployment than the rest of the country. Part of this was due to low energy prices that favored energy-intensive manufacturing.
Several cities of the Rust Belt, such as Pittsburgh, Detroit, and Cleveland, have attempted to diversify their economies to escape the heavy dependence on manufacturing and have successfully made a transition to the "service and information economy." The region must still avoid complacency and guard against a shortage in skilled labor. The Federal Reserve Bank of Chicago reported in 1997 that improved access to education and skills was required for continued growth in the region. Educational reforms and an increase in the market base of their products are only part of the measures planned by the former rust belt states to maintain a competitive edge. The economic fortunes of the Midwest—as is clear from the experience in the automobile and steel industries—is tied to a competitive global market. The rusting experience of the 1970s provided the region with the opportunity to retool for world competition.
See also: Chrysler Motors Corporation, Sun Belt
RUST BELT refers to an economic region of the United States concentrated in the formerly dominant industrial states of Illinois, Indiana, Michigan, Ohio, and Pennsylvania. By the 1980s, the Rust Belt became what the Dust Bowl had been to an earlier generation—a symbolic name for a devastating economic change. The 1984 Democratic presidential candidate, Walter Mondale, is generally credited with coining the term. During the campaign, Mondale, the former vice president from Minnesota, attacked the economic policies of incumbent Republican president, Ronald Regan, stating that the president was "turning our great industrial Midwest and the industrial base of this country into a rust bowl." The media, however, repeated and reported the notion as "Rust Belt," and the phrase stuck as a good description of the declining industrial heartland, especially the steel-and automobile-producing regions in the Northeast and Midwest. The phrase became synonymous with industrial decline in the once-dominant U.S. heavy manufacturing and steel industries.
The Rust Belt has indefinite boundaries, although in 1979 Joel Garreau dubbed the same general region the "Foundry." Both terms aptly characterized the region's economic history and underpinnings. Readily available coal, labor, and inland waterways made the region ideal for steel manufacturing. Moreover, the automotive industry—a major buyer of steel—developed nearby. In the 1970s and 1980s, however, the U.S. steel industry rapidly fell from world dominance. The U.S. worldwide market share of manufactured steel went from 20 percent in 1970 to 12 percent by 1990, and American employment in the industry dropped from 400,000 to 140,000 over the same period. Starting in the late 1970s, steel factories began closing. Among the hardest hit of the communities was Youngstown, Ohio, where the closure of three steel mills starting in 1977 eliminated nearly 10,000 high-paying jobs. Also hurt were foundries in Buffalo, New York; and Johnstown and Pittsburgh, Pennsylvania, where the last outmoded steel plant closed in the late 1980s.
Although thirty-five states produce steel, the large steel plants in the Rust Belt faced particularly hard times because they relied upon large, unprofitable, and outdated open-hearth furnaces. Many were sulfur-burning, coal-fired plants, which had difficulty meeting stringent environmental regulations on smokestack emissions. Layoffs occurred even as worldwide demand for steel grew. Other countries, in particular Japan, met this demand with lower-cost and sometimes higher-quality steel. The American steel industry rebounded by developing low-cost, highly automated minimills, which used electric arc furnaces to turn scrap metal into wire rod and bar products, but the minimills employed fewer workers.
The region had been the nation's industrial heartland and contained many large, densely populated urban areas. These cities, which began showing signs of decline, initially had served as a destination for early European immigrants and tremendous numbers of African Americans who migrated north to join the industrial workforce following World War II. Industrial decline, however, permanently eliminated thousands of well-paid, benefit-laden, blue-collar jobs. Many families left the Rust Belt and relocated to the Sun Belt and the West, seeking jobs and better living conditions. The black populations in the Chicago and Pittsburgh metropolitan areas declined, reversing earlier patterns of northward migration from the Deep South. The population shift meant fewer congressional representatives from the region following the 1990 reapportionment.
Cooke, Philip, ed. The Rise of the Rustbelt. London: UCL Press, 1995.
Florida, Richard, and Martin Kenney. The Breakthrough Illusion: Corporate America's Failure to Move from Innovation to Mass Production. New York: Basic Books, 1990.
Garreau, Joel. The Nine Nations of North America. Boston: Houghton Mifflin, 1981.
See also better to wear out than rust out.