The economic crisis contributed to a breakdown of the postwar social compact. Faced with declining profits and rising overseas competition, corporations stepped up the trend, already under way before 1970, toward eliminating well-paid manufacturing jobs through automation and shifting production to low-wage areas of the United States and overseas. The effects on older industrial cities were devastating. By 1980, Detroit and Chicago had lost more than half the manufacturing jobs that had existed three decades earlier.
Smaller industrial cities suffered even sharper declines. As their tax bases shriveled, many found themselves unable to maintain public services. In Paterson, New Jersey, where great silk factories had arisen in the early twentieth century, deindustrialization left a landscape of abandoned manufacturing plants. The poverty rate reached 20 percent, the city sold off public library buildings to raise cash, and the schools became so run down and overcrowded that the state government took control. The accelerating flow of jobs, investment, and population to the nonunion, low-wage states of the Sunbelt increased the political influence of this conservative region.
Table 26.2 THE MISERY INDEX, 1970-1980
|
Year |
Rate of Inflation (%) |
Rate of Unemployment (%) |
Misery Index (%) |
|
1970 |
5.9 |
4.9 |
10.8 |
|
1971 |
4.3 |
5.9 |
10.2 |
|
1972 |
3.3 |
5.6 |
8.9 |
|
1973 |
6.2 |
4.9 |
11.1 |
|
1974 |
11.0 |
5.6 |
16.6 |
|
1975 |
9.0 |
8.5 |
17.6 |
|
1976 |
3.8 |
7.7 |
13.5 |
|
1977 |
6.5 |
7.1 |
13.6 |
|
1978 |
7.7 |
6.1 |
13.8 |
|
1979 |
11.3 |
5.8 |
17.1 |
|
1980 |
13.5 |
7.1 |
20.6 |
The World Trade Center under construction in New York City in the 1970s.
Of population growth in metropolitan areas, during the 1970s, 96 percent occurred in the South and West. San Jose and Phoenix, with populations around 100,000 in 1950, neared 1 million by 1990.
In some manufacturing centers, political and economic leaders welcomed the opportunity to remake their cities as finance, information, and entertainment hubs. In New York, the construction of the World Trade Center, completed in 1977, symbolized this shift in the economy. Until destroyed by terrorists twenty-four years later, the 1 ю-story “twin towers” stood as a symbol of New York’s grandeur. But to make way for the World Trade Center, the city displaced hundreds of small electronics, printing, and other firms, causing the loss of thousands of manufacturing jobs.