Youngstown, Ohio: An American Tragedy

Youngstown, Ohio 1953

Youngstown, Ohio 2013



Youngstown and America

Between the 1920s and 1960s, Youngstown, Ohio was an important steel producing hub dominated by such companies as Republic Steel, U.S. Steel, and regional giant Youngstown Sheet and Tube.  Youngstown reached its’ zenith in the 1950s, with a prosperous population of 168,000.  The city’s 1951 Comprehensive Plan envisioned a city of the future between 200,000 and 250,000 people, with 1,700 acres zoned for heavy industry.

The city’s bright future was upended on September 19 1977, when Youngstown Sheet and Tube Company announced it would close the Campbell Mill. More than 5,000 jobs were lost immediately. Fifty thousand jobs soon followed, as Sheet and Tube’s Brier Hill Works closed two years later, and mill closings at U.S. Steel and Republic Steel followed.

Unemployed workers were left to fend for themselves. City leaders and the federal government, withheld support from an employee initiative to take over and run some of the defunct steel mills proposed by the Ecumenical Coalition of the Mahoning Valley. The coming of the free trade era witnessed manufacturing at major factories throughout America fall into rapid decline as corporations moved jobs overseas.

Since 1950, Youngstown’s population has fallen by two thirds and now stands at 66,000. Most industry is now gone, and many neighborhoods have more homes vacant than inhabited. The city has demolished at least 2,566 blighted structures since January 2006. There are 4,000 to 5,000 vacant houses in Youngstown awaiting demolition.  Many homes, however, fall to arson first.  Arsonists torched 158 houses in 2005 alone.

Youngstown’s issues are, in fact, American issues. A recent New York University-Harvard study provides an explanation.  Corporate profits have decoupled from corporate investment in America.  Today corporate profits account for 12 percent of Gross Domestic Product, while net investment has shrunk to 4 percent.  Investments can reduce companies’ quarterly earnings, to which most CEOs’ income is linked.  The current business paradigm holds that share price is the sole determinant of a corporation’s value and that corporate management’s primary responsibility is to shareholders, rather than balancing the interests of shareholders, employees and consumers.  The outsourcing of American jobs is another manifestation of this paradigm.  Between 2004 and 2009 American based multi-national corporations cut 2.9 million jobs in the United States, while outsourcing 2.4 million jobs to their overseas operations.

General Electric’s chief executive Jeff Immelt (former head of the Obama administration’s “jobs council”, who receives an annual compensation of approximately $15 million) acknowledges that the health and well-being of a company such as GE is now less connected to the well-being of the American economy (worker). Immelt says, “I’m a GE leader first and foremost. At the same time…I work for an American company.”

In 2000 some 54 percent of GE employees worked in the United States. In 2010 about 46 percent of General Electric’s 287,000 employees worked in the United States. GE laid off 21,000 American workers and closed 20 factories between 2007 and 2009.

The company, led by Immelt, earned $14.2 billion in profits in 2010, but paid no Federal taxes because the bulk of those profits, some $9 billion, were offshore. The year 2010 was the second year in a row that GE paid no taxes. General Electric states that it “pays what it owes under the law.”

Corporate focus on short term profits killed Youngstown, Ohio and is killing America.

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