Shop Talk

A History of the Rust Belt and Why it’s Important

The term Rust Belt can be traced back to the 1960s and 1970s as industry in the Midwest stretching from New York to Wisconsin began to face population and economic declines.

Some see the term as derogatory, a sign that the best years in the region are behind us. Others are trying to rebrand the region as pushes for innovation and job creation remain at the forefront of the Midwestern conversation. The region’s access to the Great Lakes, canals, and rivers, allowed for convenient shipping of completed product and entry of raw materials. This access enabled companies that were household names to grow in prominence, making the region a manufacturing stronghold. Industries including Automotive, Coal, and Steel dominated the region and employed much of the population. As these industries began to see a decline, companies started to send jobs overseas and moved south in search of lower costs and cheaper labor. The decline continued and factories began to sit vacant. Meanwhile, the term ‘Rust Belt’ became more common as the elements caused abandoned facilities to rust over time.

In the 1950s, almost half of the manufacturing jobs in America were located in the Rust Belt.

With such a dominant position in the market, companies faced limited competitive pressures, which incited organizations to maintain the status quo rather than push the boundaries of innovation and growth. When the United States opened trade from overseas and imports began to flood the market, the manufacturing industry as a whole began to struggle. This was even more prominent in the Rust Belt because aging factories and machines couldn’t keep up with the more efficient processes of updated technology. All of these factors coincided with the U.S. economy shifting to more service-oriented industries. Facing this new competition, wages began to drop before jobs were eventually cut as companies saw profits disappear. Between 1950 and 1980, the Rust Belt saw a decline of about 28% of total jobs. In the same time period, the region saw its share of manufacturing jobs fall by 34%.

While the jobs of the 1950s and 60s aren’t returning, the Rust Belt remains an incredibly important region for the country.

Here in Ohio, manufacturing accounts for over 650,000 jobs and is the leading contributor to Ohio’s Gross Domestic Product (GDP). The average annual earnings of Ohio workers on manufacturing payrolls in 2020 were $65,000. Additionally, Ohio recently announced the approval of assistance for eight projects that will create over 1,800 jobs connected to manufacturing and ensure that over 800 jobs remain in the Buckeye state. More than $2.3B in venture capital funding was secured in 2021 showing continued investment in the region.

As demand for space and living costs have increased over time, the Rust Belt is now offering a landing spot for companies and workers looking for a new home. In January of this year, Intel announced they would be making a $20 billion investment in Ohio signaling a new opportunity for the Rust Belt to once again become a region of strength for the U.S. economy. With existing infrastructure that continues to grow in time, the Rust Belt can now become known as the new home to high-tech manufacturing operations. With investments like Intel’s, the region can now expect strategic partners throughout the surrounding area to help support production and begin to build a new reputation highlighted by innovation and job creation.

At Rust Belt Recruiting, we are proud to call this area home.

We are excited to work with clients who oftentimes have seen companies passed through multiple generations. We take pride in helping not just fill jobs, but create futures for those who are looking for a new career. We do not see the term ‘rust belt’ as a negative, but instead see proud companies and employees who are motivated to work hard and excited to contribute to major growth in the years ahead.  We look forward to partnering with more clients in the Rust Belt and continuing to Renew Our Region!

Written by Rust Belt Recruiting’s Recruiter, Weston Strayer.
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