Joel Kotkin Debunks the Myth of Deindustrialization

Bill Steigerwald
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Posted: Sep 04, 2007 12:01 AM
Joel Kotkin Debunks the Myth of Deindustrialization

Hail the working man. Another Labor Day is upon us/has come and gone. But are we still celebrating a blue-collar, industrial work force that barely exists anymore? Lots of people think so, but not city guru Joel Kotkin. As he wrote earlier this month in The Wall Street Journal, the death of manufacturing in America is a myth. In fact, in parts of the South, the Great Plains and Pacific Northwest, high-skilled workers are fueling vibrant local economies and helping America make $1.6 trillion worth of industrial stuff -- 42 percent more than in 1982. I talked to Kotkin (joelkotkin.com) Aug. 29 by phone from his home in the Los Angeles area.

Q: So America’s manufacturing work force is not gone?

A: No. It’s still there. But it’s getting smaller. A lot of it isn’t unionized. And it’s increasingly not located in what we would call the key industrial belt.

Q: And America’s manufacturing sector is not in a long-term decline?

A: Not if you take a look at what’s being produced -- and particularly the skilled-job numbers are quite impressive. I have to tell you, almost every place I go in this country, particularly where the economy is growing, if you ask business people what is it that would really help them, they say “skills.” Machinists. Welders. It’s not like there’s a Ph. D. shortage, generally speaking. But there is a welder shortage, there’s a plumber shortage, there’s a machinist shortage. But nobody wants to talk about this. Cities that have lost their industrial base don’t want to talk about it, and many cities that still have it are almost ashamed of it. In one of the great historical ironies, the places where they are not ashamed of manufacturing are places like Houston and Charleston and Charlotte. But the places with the great industrial traditions, it’s almost as if they are ashamed of their lineage.

Q: Why is manufacturing prospering in places like Dubuque, Houston and Seattle?

A: Sometimes it’s just historical circumstances -- the right industry at the right time. But I think the reason that manufacturing -- particularly at the higher end, which is more and more what is there -- is so important is that -- going back to Jane Jacobs -- it is a classic export industry. If you are in Seattle and you are assembling planes, or if you are in Dubuque and you are assembling and building systems for building roads around the world, you are taking money from other parts of the country or the world and you're bringing that money in to your town. Most of the stuff that has been growing isn’t doing that -- it’s retail; it’s health care, which is basically serving your own people. ... It doesn’t have to be manufacturing, but manufacturing is one part of what you have to offer. Manufacturing also has an important sociological impact, which is it provides jobs and opportunities for people who otherwise would be stuck in a job with no upward future. One of the women I interviewed in Charleston had been working in retail making under $10 an hour. Now she’s working in manufacturing and she’s gone up to $15 or $16 an hour. She’s got some health care benefits. She’s got a skill. She feels she’s got a future.

Q: The U.S. has lost about 5 million industrial jobs since 1970 -- most of them low-skill.

A: What you have today -- at least what that Federal Reserve report showed -- is that a higher percentage are high-skilled workers and high-skilled jobs have increased significantly. We have to look at manufacturing in a somewhat different way than we have. Even somebody who’s going to work in, let's say, an auto plant today, going forward is going to be more skilled because you’re going to have more robots; it’s going to be more computerized. So it’s kind of misleading to look at manufacturing as a low-skilled industry. There are pockets of that. But those are the industries that are either being automated or they are really having a hard time holding on. They’re holding on to some extent in parts of the garment industry, parts of the textile industry and some food processing, though over time I think a lot of that will get more automated. That’s where you’ve seen a lot of job losses. But fundamentally, this is part of what an economy should be looking to promote. When I look at a place like Pittsburgh, which has this magnificent history, it seems to be -- maybe I’m wrong -- ashamed of it.

Q: What is going on in manufacturing is what happened to farming over the last 220 years -- we're producing more with fewer and fewer people.

A: That’s exactly right. And the geography of that change is very interesting because it’s moved increasingly to the South and West. But there are pockets in the Great Plains that also are doing very well, which is very interesting. It’s much more the Dakotas, Iowa, out toward the Great Plains, than a great revival taking place in Michigan. Some of that may be because of politics. Some of that may be because of culture. States in the Upper Plains have basically fairly high education levels. A high school graduate in Iowa or the Dakotas is generally much more literate than a high school graduate in the Northeast or California.

Q: Is there a secret to attracting new manufacturing or nurturing the old manufacturing bases?

A: I think what you are talking about is nurturing new manufacturing that may be growing out of the old manufacturing. What I hear over and over again is the need for skills, the need for a reliable work force. That has probably more to do with companies’ decisions to move than almost anything else. They can’t find the skilled workers they want. I remember talking to a guy whose company was just going gangbusters up in Bellingham, Washington, and he couldn’t find welders. In Bellingham, Washington, you ride into town and “Welders wanted” is the first thing you see. Everyone talks about how we’re becoming a society of low-end service workers and high-end information workers. But here’s something in between -- basically the logistics and manufacturing industry -- and nobody seems to be focused on it.

Q: What can governments do?

A: I would say infrastructure and training are the two big things -- and if you think of the training as part of the infrastructure, it’s really one thing. You need roads that go in and out. You need modern industrial space. You need reliable electricity. You need shipping facilities. You need workers who are relatively skilled, trainable and reliable. It’s really not rocket science that you can do that and that would promote the manufacturing sector of the economy. Oddly enough, I find that one of the great ironies -- and I think of myself as a old Pat Brown-Harry Truman Democrat -- is that Democrats seem to be much less interested in this than occasionally a conservative Republican is interested in it. This sort of gentry liberalism we have now, they don’t really want any of these jobs because, you know what, there is going to be pollution from these industries.

I would argue that if something is going to be manufactured in the United States, it’s going to have much less negative effect on the environment than if it’s manufactured in China. It’s almost like people want to shunt aside all the hard things and have the hard things done by somebody else so they can have their pristine environment. A, that has a sociological effect, since there is no upward mobility for a large portion of the population, and B, you have the stuff built in places that have much worse regulation. In California, they’ll put this regulation in and kick the guy out of California; so the guy goes to Texas, where he can pollute twice as much.

Q: Is a city like Pittsburgh doomed, in the sense that there is nothing we can do to regenerate manufacturing?

A: I’m always reluctant to say what a place can do. It’s like asking a shrink what your problems are after the first session. But I would try to find out if there are companies that are expanding. Are there companies that would like to expand? Are there companies that want to stay? Ask them what they want. We live in this dream world where we say, “Well, if we have a fancy stadium with sky boxes, that will keep businesses here.” Well, what do you mean by businesses? Do you mean the gauleiters who represent multinational corporations, so they can hang out at a fancy football game? Or are we talking about somebody who’s got 15 people working for him in a shop somewhere in the suburbs and would like to get to 30? What are his issues? Are they tax issues? Are they training issues? Are they regulatory issues? You’ve got to go ask! I don’t see anyone interested in that anymore. It’s all “What does some 23-year-old, footloose student want? Does he have enough jazz clubs to go to?” Or some footloose 50-year-old corporate henchman. “Does he have enough arts facilities?"

As a country, we’re kind of delusional about our economies. I’ve found a few places in the country where they focus on this stuff, but I’m kind of becoming a persona non grata for raising these issues. I’m not raising them as a conservative, saying we shouldn’t have taxes or shouldn’t have regulations. I’m just saying, “How do you provide for a broad-based economic opportunity for your people? Isn’t that what’s it about?” Unfortunately, for most mayors in America, that’s not what’s it’s about. What it’s about is, “How do I keep the public employees happy? How do I keep the people at the very top of society happy? And how do I put on a good enough show so that everybody thinks I have a hip, cool city.”

Q: You mentioned earlier you were a Pat Brown-Harry Truman Democrat. What's that?

A: In other words, meat and potatoes; get the job done; that you understand that a Democrat is first and foremost a representative of a middle-class party that has middle class values and is the party of upward mobility and is willing to use the public sector where necessary to lead that charge -- that’s why I’m not a Republican. But I find that Republicans at least are willing to be occasionally skeptical about some of these boondoggles, where most Democrats are in some sort of “dogmatic slumber,” as Kant talked about. You can’t say a bad word about light rail – or that maybe a bus rapid transit can get the job done for a third the price, which means the inner-city Pittsburgh person can actually get to a job in the outer areas. Instead we want to build a cute little light-rail line, so that maybe we can convince a couple yuppies to take the train to work for a couple weeks. It’s demented. Meanwhile, then they wonder why people keep moving farther out into the suburbs or other cities. They’ve expended so much money. Take the $1.5 billion they’ve spent in Pittsburgh (for stadiums, etc.) -- include your stupid ($450 million) light-rail tunnel under the river. What if you had had a tax reduction for businesses? Or if you had built the best bus and toll way system, so that Pittsburgh became a great place to ship goods in and out of? Or if you built a wonderful park system, so that people would say, “I want to come live in Pittsburgh because they have the best park system”? There are a lot of ways that you could have spent or not spent that money.

Q: Instead what we have are two stadiums, a gigantic convention center that’s empty half of the time or giving away its space and a $450 million light-rail tunnel.

A: I’ll tell you the truth, a lot of the blame comes to the journalists. The journalists never ask the tough questions. They basically follow the scripts that they are given. And also part of the problem, and we’ve talked about this in general about journalism these days, you have got a bunch of young kids who are there for two or three years. They don’t understand what crap this is. To them it’s all, “Well, there’s an art museum downtown. That’ll be good for me.” If there is some “starkitect” -designed building, they say, “Wow, that’s sort of fun for me.” They don’t care.

Q: I’ve always said the newspapers of America should be indicted en masse for having countenanced 50 or 60 years of the destruction of cities. I bet 95 percent of newspapers have applauded and cheered every boondoggle, every urban-renewal project back in the 1950s, every new light-rail project -- no matter what it was, newspapers cheered them on.

A: And what happens if you have the temerity to suggest that this may not be the way to go? You’re “anti-city,” you’re “pro-suburbs,” you’re a “neoconservative” -- like I’m Dick Cheney or something. You get name-called. And all you’re saying is, “Look, are we sure that what we are putting our money into is really what matters, given the tremendous pressing needs that every city has?”