Economy of Youngstown, Ohio
The economy of Youngstown, Ohio has been impacted by a loss of the steel industry jobs which started on September 19, 1977 (on what became known to locals as Black Monday) and continued into the mid-1980s. While the loss of steel industry jobs 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 have been well documented.
The loss of industrial jobs 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.
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.
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.
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 Worker Adjustment and Retraining Notification Act was still eleven years from going into 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.
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.
Youngstown after the steel mills
A number of products and enterprises other than steel introduced in Youngstown during the manufacturing era became national household names. Among these is Youngstown-based Schwebel's Bakery, which was established in neighboring Campbell in the 20th century. The company now distributes bread products nationally. In the 1920s, Youngstown was the birthplace of the Good Humor brand of ice cream novelties, and the popular franchise of Handel's Homemade Ice Cream & Yogurt was established there in the 1940s. In the 1950s, the suburb of Boardman became the site of one of the country's first modern shopping plazas, which was established by Youngstown-born developer Edward J. DeBartolo, Sr. The fast-food chain, Arby's, opened the first of its restaurants in Boardman in 1964, and Arthur Treacher's Fish & Chips was headquartered in Youngstown in the late 1970s. More recently, the city's downtown hosted the corporate headquarters of the now-defunct pharmacy chain store Phar-Mor, which was established by Youngstown native Mickey Monus.
Downtown Youngstown has seen modest levels of new construction. Recent additions include the George Voinovich Government Center and state and federal courthouses: the Seventh District Court of Appeals and the Nathaniel R. Jones Federal Building and U.S. Courthouse. The latter features an award-winning design by the architectural firm, Robert A. M. Stern Architects.
Currently, Youngstown's downtown is a site of new business growth. The Youngstown Business Incubator, located in the heart of the downtown, houses several start-up technology companies, which have received office space, furnishings, and access to utilities. Some companies supported by the incubator have earned recognition, and a few are starting to outgrow their current space. One such company–Turning Technologies–has been rated by Inc. Magazine as the fastest-growing privately held software company in the United States and 18th fastest-growing privately held company overall. In an effort to retain companies downtown, the incubator secured approval to demolish a row of vacant buildings nearby to clear space for expansion. The project will be funded by a $2 million federal grant awarded in 2006.
In 2005, Federal Street, a major downtown thoroughfare that was closed off to create a pedestrian-oriented plaza, was reopened to through traffic. The downtown area has seen the razing of structurally unsound buildings and the expansion or restoration of others.
New construction has dovetailed with efforts to cultivate business growth. One of the area's more successful business ventures in recent years has been the Youngstown Business Incubator. This nonprofit organization, based in a former downtown department store building, fosters the growth of fledgling technology-based companies. The incubator, which boasts more than a dozen business tenants, has recently completed construction on the Taft Technology Center, where some of its largest tenants will locate their offices.
Reversing the trend, in 2010, Vallourec & Mannesman broke ground for a $620 million-dollar pipe mill north of its existing business V&M Star. Production of steel pipes began in October 2012.The facility is 1 million square feet in area and produces tube goods to service natural gas exploration in the Marcellus Formation, which is the largest gas field discovered in the past decade, estimated to provide enough natural gas to supply the United States for 100 years.
Crime has been a lingering problem in many Rust Belt's big and small urban communities, hampering economic recovery. For decades, Youngstown was a safe haven for organized crime and related, ingrained into the fabric of a society, corruption. A 2000 publication in The New Republic listed a "chief of police, the outgoing prosecutor, the sheriff, the county engineer, members of the local police force, a city law director, several defense attorneys, politicians, judges, and a former assistant U.S. attorney" as controlled by the Mob. The charges against the local nine-term United States Congressman, the Ohio Democrat and a former sheriff James Traficant, on which he was indicted in 2002, included racketeering among others. Although this has since been cleaned up somewhat, in 2006, Youngstown was ranked by Morgan Quitno Press, a Kansas-based publishing and research company, as the 9th most dangerous city in the United States.
In the first decade of the 21st Century residents and city planners became motivated to change the city's course, eventually producing the "Youngstown 2010" project. This project is also colloquially referred to as "The Greening of Youngstown" due to the large scale demolition of dilapidated structures in favor of green space and the expansion of public parks.
"The City of Youngstown is operating under a comprehensive plan that was formulated over a four year period in the early 1950s. The plan was reviewed and updated with two additional volumes in 1974. These plans were for a different era that anticipated a population of between 200,000 and 250,000. The Youngstown 2010 Plan is based on a new vision for the new reality that accepts we are a smaller city that will stabilize at 80,000 people."
Major Vision Principles of Youngstown 2010
- 1. Accepting that Youngstown is a smaller city.
- The dramatic collapse of the steel industry led to the loss of tens of thousands of jobs and a precipitous decline in population. Having lost more than half its population and almost its entire industrial base in the last 30 years, the city is now left with an oversized urban structure. (It has been described as a size 40 man wearing a size 60 suit.) There are too many abandoned properties and too many underutilized sites. Many difficult choices will have to be made as Youngstown recreates itself as a sustainable mid-sized city. A strategic program is required to rationalize and consolidate the urban infrastructure in a socially responsible and financially sustainable manner.
- 2. Defining Youngstown's role in the new regional economy.
- The steel industry no longer dominates Youngstown’s economy. Most people work in different industries today. The city must align itself with the present realities of the regional economy. This new positioning means support for a more diverse and vibrant economy founded on the current strengths within the city and region, such as the university, the health care sector, and the arts community.
- 3. Improving Youngstown's image and enhancing quality of life.
- Youngstown must become a healthier and better place to live and work. Over time people have grown accustomed to seeing rundown buildings and streets. Urban decay is a constant and demoralizing reminder of Youngstown’s decline. It is important that Youngstown begin to "fix its broken windows" and support initiatives to improve neighborhoods, the downtown, the river, and the education system. The city must also begin dealing with difficult issues such as public safety and racism.
- 4. A call to action
- The people of Youngstown are ready for change. The city already has a large number of local leaders who want to involve others and make a contribution. The citywide plan must ensure that the excitement and optimism fostered through the planning process is maintained and advanced. To that end, the city needs a practical, action-oriented plan and a process through which local leaders can continue to be empowered and the city’s successes constantly celebrated.
Besides embracing downsizing and green space expansion, the plan focuses strongly on attracting more diverse businesses. This has resulted in the city gaining international recognition for addressing the negative consequences of deindustrialization, which are common across the world.
- Decline of Detroit
- Rust Belt
- Steel crisis
- Steel Valley (Ohio-Pennsylvania)
- Urban decay
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