Can The Rust Belt Build Itself Into A Contender For Coastal Migrants?

Presidential candidate Walter Mondale in 1984 inadvertently popularized the term Rust Belt when, during his campaign, he used "Rust Bowl" in a speech to steelworkers at the LTV plant in Cleveland, in an attempt to criticize the policies of the Reagan administration.

Quickly modified by popular usage to mirror the Sun Belt, the term became a shorthand that is still used to describe the part of the country that has suffered from the long-term impact of deindustrialization, income and population loss and depressed property values.

The economic distress of the former industrial powerhouse metros has been real enough across the decades, but the region's economic development picture in the 21st century is more than endless economic insecurity.

Cities and other localities in the Rust Belt are pushing toward revival through economic diversification, incubating new industries and rebuilding their amenities to attract a more mobile workforce — that might be inclined to leave more expensive coastal locations and take their skills with them.

Not all of these efforts have borne fruit, but some have, meaning that parts of the region will probably participate in the post-pandemic expansion forecast for the country as a whole.

"For it to work, you have to believe that revival is possible," said Joshua Smith, city manager of Hamilton, Ohio, which has undertaken various efforts to revive itself, including a major adaptive reuse in its downtown. "As recently as 10 years ago, Hamilton was very tired. It was still an afterthought, even in its own county, but I believe it's turning around now."

Hamilton, located about 20 miles north of Cincinnati, over the next year is set to complete a transformation of a 40-acre former downtown paper mill site into a $144M mixed-use sports complex, hotel, convention center and restaurant development through a partnership with Spooky Nook Sports Inc. The project will include one of the largest indoor sports complexes in North America and the second-largest convention center space in Greater Cincinnati. The 1.2M SF Hamilton project is the latest of these community redevelopments coming to fruition in the past decade.

Myth: It Is Just The Midwest And Manufacturing Is Completely Dead

There has never been a precise geographic definition of the Rust Belt, since that kind of moniker seems to work better when it is vague. Still, states like Michigan, Ohio, Indiana and Pennsylvania are often included in the Rust Belt, as prime examples of places economically and socially impacted by industrial contraction in the late 20th century.

Yet the phenomenon of industrial decline isn't strictly Midwestern or Northeastern. Those regions have arguably suffered most, but the decline of U.S. manufacturing has been nationwide.

"The typical image of a formerly industrial Rust Belt city ... fails to fully capture the universe of places that have similarly fallen from a more prosperous past," write Daniel Newman and Kennedy O’Dell of the Economic Innovation Group in a 2020 paper, America’s Legacy Communities: The Industrial Heartland and Beyond.

The paper identified 232 U.S. legacy communities that experienced contraction as the wider national economy shifted away from manufacturing and toward services and as non-U.S. manufacturers gained the upper hand in many industries. These communities are characterized by higher unemployment, lower household incomes and declines in population beginning as long ago as the 1970s.

To be sure, more of those communities are in the Midwest than anywhere else, with the paper finding 85 legacy communities in that region, along with 62 in the Northeast. But the South has its share of them as well, with 79 — more than the Northeast. The South never had as much manufacturing as other parts of the country, but when that sector contracted, the South suffered as well.

Another misperception about the industrial heartland is that the industrial economy has forever been on a downward path since the 1970s. Manufacturing in a number of Rust Belt states actually grew, or at least didn't decline, during the latter half of the 2010s, according to Census Bureau data.

During the first quarter of 2015, for example, about 680,400 workers were employed in the manufacturing sector in Ohio. By the beginning of 2020, before the coronavirus pandemic distorted the economy, 694,000 Ohioans worked in manufacturing, a gain of about 2%.

Michigan, Indiana and Pennsylvania similarly have added manufacturing jobs between the beginning of 2015 and 2020, according to the Census Bureau. Michigan gained 43,000 (up 7.4%) and Indiana was up 23,000 (a gain of 4.4%), though Pennsylvania gained only 4,700 manufacturing jobs during that period (up less than 0.01%). Those four states are also still among the top 10 nationally for manufacturing jobs, bested in 2020 only by California, Texas and Illinois, which itself is sometimes counted as part of the Rust Belt.

By other metrics, the traditional Rust Belt is actually fairly rusty, however. Household income has stagnated or declined in a lot of legacy communities, infrastructure is crumbling, and much of the region is beset by social problems unknown to it only two generations ago.

Myth: New Industries Cannot Thrive In The Rust Belt

A number of Rust Belt cities and towns are now home to industries that have grown in recent years, in some cases at least partly replacing older, faded ones. Not all of the Rust Belt is fated to stagnation, in other words.

In Warsaw, Indiana, for example, medical device manufacturing has grown since the 1980s, and now the town is home to firms that design and make one-third of U.S. orthopedic products. In Kalamazoo, Michigan, local economic development efforts kicked into gear to help entrepreneurial scientists start new biotech firms after pharma giants Upjohn and Pfizer downsized in the 2000s, and it isn't the only place in Michigan to do so.

Perhaps the largest example of Rust Belt revitalization is Pittsburgh, which has had considerable success in bringing new industries into the city to replace some of the manufacturing might that the area lost in the last third of the 20th century. In the past 10 years, that has especially meant robotics.

Robotics Business Review in 2020 named Pittsburgh one of the top five cities for starting a robotics business, along with places that might be top of mind when it comes to tech startups, including Silicon Valley, Boston and Austin.

Among other factors for this success, the Review pointed out that Pittsburgh's existing manufacturing companies provided a ready base of customers for local robotics companies. There is also talent available locally, as professionals trained in the industry emerge from institutions like Carnegie Mellon and the University of Pittsburgh. Finally, Pittsburgh's housing costs are lower than other robotics hubs, which is a factor in attracting companies and talent from elsewhere.

The local robotics ecosystem, supported by Pittsburgh universities, grew prodigiously during the 2010s, with over 300% growth in employment since 2011, according to the Pittsburgh Robotics Network.

The Robotics Institute of Carnegie Mellon has been at the forefront of the local industry. At any point in time, the institute has 100 sponsored research projects, including government-, industry- and nonprofit-sponsored projects, according to Srinivasa Narasimhan, interim director of the institute.

"There are about 70 to 80 startups in the city of Pittsburgh doing robotics-related work, and over 30 have come out of the department," Narasimhan told Flyover Future.

The presence of the robotics industry has been spurring various kinds of real estate development in Pittsburgh as well, including — most recently, during the pandemic — a new data center and residential development near Carnegie Mellon.

Myth: Smaller Rust Belt Cities And Towns Have Given Up

Much of the damage to the Rust Belt has been to relatively small places whose lifeblood had been a single factory or industry until suddenly it wasn't. Newton, Iowa, was devastated by the closure of a Maytag factory in 2007; Monessen, Pennsylvania, lost its steel mills in the '80s and hasn't been the same since; and Flint, Michigan, was infamously abandoned by GM in the 1980s.

Though the picture is grim in many places, there are Rust Belt cities and towns making a stab at revival in one way or the other. For communities that have the political and financial capital — no sure thing — one strategy is the renewal of local amenities. The thinking is that as mobile workers look for less expensive places to live, they and their employers will turn to places that have invested in public amenities, such as schools and parks.

For example, Akron and Canton, Ohio, have ponied up more than $100M between them during the last half of the 2010s to start the process of revitalizing their downtowns with cultural and mixed-use developments. Green Bay, Wisconsin, has worked to redevelop its downtown, including the development TitletownTech, founded in 2019, which includes elements of an incubator and an accelerator adjacent to Lambeau Field.

In the case of Hamilton, Ohio, a town that is now part of metro Cincinnati and which was once a major papermaking center, the municipal effort began with the renewal of its amenities during the 2010s, and now the town is betting that a major new sports center, redeveloped from the husk of a paper mill, will spur further downtown growth.

"After I started, I said that if we aren't a city that people want to live in, we will never succeed," Smith said. "Talent goes where the amenities are, and they create the jobs. So we focused very heavily on improving our park system and our downtown area."

Improving the parks meant a reorganization of city government to give management of the parks to a conservancy in 2015, rather than having the city oversee them directly. It is a strategy that Smith said he had seen used elsewhere to good effect, and that Hamilton has been able to upgrade its park system as a result.

Hamilton has also partnered with a variety of organizations to rehabilitate abandoned properties for rent or given them to new ownership who put the buildings back into use. Downtown Hamilton has seen over 90 new small businesses open in the last 10 years.

Lately the city has been supporting in partnership with Spooky Nook Sports — especially through the sale of bonds — the redevelopment of Champion Mill, a former paper mill that occupies 40 acres of the city's downtown, into a 1.2M SF indoor sports complex along with hospitality and restaurant space. Work on the project started in 2018.

"We're within about 12 months of opening," Smith said. "All together there's over $100M of new capital just going into the downtown area, just that project and another major redevelopment. And that doesn't include many other projects that have happened the last five years. We're on a bit of a roll right now."