The Midwest's Big Economic Miscalculation

The rebirth of traditional industries isn't necessarily a good thing.

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Reuters

All over the Midwest, cities and towns are embracing new growth in their traditional industries with relief and delight.

In northern Minnesota, iron ore has made a comeback. In Youngstown, Ohio, a new $650 million steel plant is under construction.

The Detroit Regional Chamber of Commerce has launched a new effort called MICHauto, devoted to “promoting, retaining and growing” Michigan’s auto industry.

But I'm concerned that this “renaissance” may ultimately do more harm than good to the future of our industrial cities and states.

Let me explain. Although I grew up in Michigan, I do not come from an automotive family. My father’s family hailed from Massachusetts, and he worked on the finance staff at American Airlines, which brought him to Detroit in 1947. So, I’ve spent a lifetime as an outsider, watching what the car business has meant, and done, to Michigan.

What I’ve observed is more than just an economic impact. The automobile industry has had a psychic and a cultural impact as well, as have steel and mining on the places where they’ve dominated. That is why my alarm bells are going off at the absolute joy at these industries’ nascent revival, and the emphasis that’s being put on rebuilding them.

“They’re chasing after what once was,” says Kevin Boyle, historian at Ohio State University. “It’s understandable.”

For the better part of a century, Boyle explains, industrial production was woven into the moral fiber of states like Pennsylvania, Ohio, and Michigan and cities like Buffalo, Cleveland, and Detroit. Says Boyle: “People worked with their hands; they put in a hard day’s work; they made things.  People drew enormous pride from that fact. It defined who they were and how they felt about their place in the world.”

But pride also can be misplaced, especially if it draws from dependence on a single entity. I’ve always said Detroit is the equivalent of the Pentagon or Hollywood – large numbers of people all focused on the same thing, giving them a skewed and often defensive perspective of the outside world and what it thinks of them.

The Pure Michigan advertising campaign aside, the automobile industry has so dominated the state’s image that it obliterates anything the rest of the country knows about Michigan, such as its colleges, farms and breathtaking coastline. I went to school with young men who didn’t go to college because they made so much money working in auto plants during high school vacation, and signed on permanently after graduation.

There are people in my generation who worked loyally for a single car company (because you picked one and stayed with it for your career) and have felt bereft ever since they took buyouts or were laid off long before their careers should have been over

“It’s hard for people who’ve never experienced life in the industrial belt to understand the depth of the loss," Boyle adds. "It wasn’t just  work that disappeared. It was a way of life.”

The reliance on industry as a career is still so psychologically strong that fewer than one in five of Michigan’s young people have the preparation they need to go to college, according to its governor, Rick Snyder. Of course, in a state where the unemployment rate soared above 14 percent during the recession, I understand the natural tendency to celebrate any resurgence. And there are a number of examples where Michigan’s economy is diversifying.

In Flint, the old Fisher Body No. 1 plant where the 1936-37 sitdown strikes took place is now Diplomat Specialty Pharmacy, selling very expensive prescription drugs.

Detroit, despite its deep financial crisis, is showing signs of revival, and its biggest booster is Dan Gilbert, the founder of Quicken Loans and the third-biggest landowner in town, behind General Motors and the city.

But automotive investments still are front of mind, even though the new jobs that the auto industry is going to create now are a fraction of the 500,000 lost to the recession. Their economic value to these communities is far less than the jobs that were lost, given lower starting wages and fewer (if any) benefits.

Beyond economics, the return of such jobs raises “a false hope that the world they once lived in and still mourn will return, when it won’t,” Boyle says.

As the economy recovers, there’s a very narrow window for these cities and states to shake the impression that ‘all we are’ is autos, or steel, or mining. I’ve been hearing my entire life about the need for this region of the country to diversify, and now the opportunity is finally here. Rather than seizing the moment, I fear my state is poised to wake up five years from now and somehow be surprised to find that auto sales haven’t rebounded to the levels of the 2000s. Or for that matter, that crucial infrastructure repairs still aren’t funded because of continued of budget cuts.

Then, perhaps, someone will say, “Maybe we should have tried” this or that, instead of re-embracing the same old, same old.

My advice to these industrial cities and states: don’t give in to the temptation to build your future based on your past. Keep focusing on what you can create anew, not recreating what was once there.

Photo credit: Rebecca Cook/Reuters

About the Author

  • Micheline Maynard is journalist living in Ann Arbor, Michigan. She most recently led Changing Gears, a public radio project exploring the reinvention of the industrial Midwest, and was previously Detroit bureau chief for The New York Times.