Economy of Youngstown, Ohio

Youngstown is in the center of the Rust Belt.

The deindustrialization of Youngstown, Ohio was the deindustrialization of the city of Youngstown, Ohio and surrounding areas, starting on September 19, 1977 (on what became known to locals as Black Monday) and continuing into the mid 1980s. While the collapse of the steel industry in the region coincided with the general deindustrialization of Rust Belt cities such as Youngstown as well as the United States as a whole, Youngstown's economic struggles related to deindustrialization have been well documented.

Deindustrialization has had a lasting impact in the Mahoning Valley region of Youngstown, as the city's population was cut in half as a result, while non-industrial businesses were forced to close or relocate due to the ripple effect of the loss of the steel industry. Although some other Rust Belt cities such as Pittsburgh have since successfully been able to diversify their economic base, as of December 2010, more than a generation after deindustrialization, Youngstown has not recovered.

History of steel

Founded by John Young in 1797 in the Connecticut Western Reserve section of the Northwest Territory, Youngstown spent the first half of the 19th century as a small village, dependent on mostly agricultural needs, until the beginning of the Second Industrial Revolution. The discovery of iron ore along the Mahoning River, however, would make the city a viable and logical place to manufacture steel. The city sits roughly in between Cleveland and Pittsburgh--steel manufacturers in their own right—and halfway between New York City and Chicago. Youngstown Sheet and Tube and Republic Steel were among the region's largest locally owned steel companies, while U.S. Steel also had major operations in the region.

The steel boom led to an influx of immigrants to the area looking for work, as well as construction of skyscrapers in the area. (Though small by today's standards.) The city's population peaked at 170,002 in 1930, just at the onset of the Great Depression. World War II also brought a great demand for steel.

Decline

After World War II, demand for steel dropped off dramatically, and industrial base of Youngstown began to see a decline. Though population levels remained flat for a few more decades, population had not grown since the Great Depression. General Motors opened Lordstown Assembly in 1966 to help offset some losses, but would only prove to be a bandaid.

In 1969, Youngstown Sheet and Tube merged with the New Orleans-based Lykes Corporation, and in 1979 the combined Lykes-Youngstown was bought by the conglomerate LTV. This brought decisions to the local economy out of the hands of the Youngstown area for the first time, although Republic Steel had moved to nearby Cleveland years earlier.

LTV had discovered that the numerous mills in the area had not been upgraded in literally decades, and would not meet pollution regulations set forth by the United States government without an expensive upgrade. In addition, many steel manufacturers were outsourcing steel to developing nations, where the costs would be cheaper and with fewer pollution regulations.

Black Monday

An abandoned facility of the Youngstown Sheet and Tube Company, owner of the Jeanette Blast Furnace, "Jenny" in the 1995 Bruce Springsteen song Youngstown. The song is about the decline of Youngstown as an industrial city.

Due to the continuing struggles of the local steel industry, Youngstown Sheet and Tube announced on September 19, 1977 that it would shut down most of its Youngstown area operations by the end of the week. Although federal laws now require employers to give 60 days notice to its employees if they plan on doing mass layoffs, the laws were not in effect at the time, and Youngstown Sheet and Tube instantly put 5,000 workers out of work. The day is still known locally as "Black Monday".

Youngstown Sheet and Tube's announcement would have a ripple effect in the area. Within two years, U.S. Steel pulled out of the Youngstown area and started scaling back its operations in Pittsburgh before eventually merging with Marathon Oil. (The two companies have since split.) Republic Steel held on into the 1980s but eventually filed for bankruptcy. The resulting layoffs led to an immediate diaspora from the region due to economic plight.

The move would have an effect on non-industrial businesses as well. Fast food chain Arby's, which at the time was beginning to make a national push, moved its corporate headquarters out of the Youngstown area. Idora Park, an amusement park in the area, suffered several fires before closing its doors in 1984. The Strouss department store would be consolidated into Kaufmann's by its parent company, May Department Stores, before its own consolidation into Macy's.

Aftermath

The city made attempts to attract another steel manufacturer, and even re-open Youngstown Sheet and Tube as a community-owned steel mill, but all these attempts failed. There have also been several instances of General Motors threatening to close Lordstown Assembly, especially after its 2009 bankruptcy. However, GM Lordstown remains open and is the area's largest industrial employer. Currently, Youngstown State University is the area's largest overall employer, a far cry from the city's industrial past. Even though the area was embarrassed by the collapse of the Phar-Mor chain, Entrepreneur named Youngstown one of the top 10 cities to start a business in 2009.

Crime became a major problem for years, with Youngstown being a major haven for crime. Although this has since been cleaned up somewhat, as recent as 2006 the city was ranked as the 9th most dangerous city in the United States.

Current city leaders have admitted that Youngstown isn't going to regain its previous population highs and has since launched the Youngstown 2010 plan. The plan includes tearing down houses and turning it into greenspace, as well as attracting more diverse businesses. This has resulted in the city gaining international recognition, and a similar plan is being considered for the city of Detroit as a result of Youngstown's success.