Saturday, August 20, 2005

The Benefits of Big City Deindustrialization

Between 1969 and 2000, the number of manufacturing jobs in New York county, which includes New York City, declined from 451,330 to 146,291. Big city manufacturing job loss is not unique to the United States. Over the last thirty years, London has lost 600,000 manufacturing jobs--and gained 600,000 jobs in business services, as well as 180,000 jobs in entertainment, leisure, hotels, and catering.

The popular media has done a good job documenting how this sectoral transition affects land use in big cities. Today's New York Times discusses land use changes near the United Nations in an article titled "Developers Find Newest Frontier on the East Side. "Long ago, the area's breweries, slaughterhouses, coal yards and warehouses began yielding ground to the United Nations and other residential and commercial buildings."

The popular media has not done a good job investigating what are the "Green City" benefits from deindustrialization. Scholars such as William Julius Wilson have pointed out that manufacturing jobs paid high wages and that many minorities held these jobs in big cities. But, manufacturing imposed serious environmental costs for cities. Look at Chicago and Pittsburgh's air and water quality in the past relative to today. In many industrial cities such as these, the "death of manufacturing" has been a good thing for the environment.

This dynamic has played out to an even larger extent in Eastern Europe's ex-communist cities. It took me a fair amount of work but I was able to build data sets in the 1990s for major cities in Hungary, Poland the Czech Republic to document this fact. To see this paper; read

I recognize that sectoral shifts (such as the death of steel plants) disrupts people's lives. It is difficult for a 55 year old home owner in Pittsburgh who worked in a steel plant to reinvent himself as a computer programmer when the steel industry declines. Despite the short run costs imposed by the decline of big city manufacturing, the public health benefits from these large cities making a transition to clean services must be huge.


Abe said...

Recently stumbled on your blog and have been enjoying it. But as native New Yorker I feel compelled to point out a minor error in your "The Benefits of Big City Deindustrialization" piece. New York county is not something that "includes New York City", but rather New York City is a political entity that whole includes New York county. There are at total of four counties in the city (the others are Queens, Kings and Richmond) and New York county includes only Manhattan and the Bronx in its borders.

While I suspect New York City and the New York metropolitan areas urban cores have both lost some degree of manufacturing jobs, I also suspect that drop is not nearly as extreme as the New York county numbers. Manhattan is a pretty extreme case study, and I would not be surprised if a sizable percentages of those manufacturing jobs simply moved to Brooklyn or the urban industrial areas of New Jersey directly across the Hudson and Inner New York Harbor from New York City. But still, there almost certainly have been a net loss of manufacturing jobs from the area over that time frame, so its really a matter of degrees.

Anonymous said...

I come from Hong Kong and I would like to share with you on the current situation here. Hong Kong has transited from an industrialized city (mainly light industry) to a city engaging in business services in recent decades. The rapid growth of Hong Kong during 60’s to 70’s was basically the outcome of the industrialization coupled with successful export of goods. With its tiny geographical area and rapidly growing population, the drawback of industrial pollution was made more apparent. But with the transition, factories in Hong Kong have either closed or moved to Mainland China (mainly to the Guangdong Province of China). Geographically (and even politically), Hong Kong is very closely related to Guangdong. As factories have moved to Guangdong and Hong Kong is no longer an industrialized city; one may imagine that Hong Kong people should be less suffering from the factory-causing pollution, in spite of job losing in the industry at the same time.

But the full picture is not as good as we imagine. A decade ago the Hong Kong government decided to implement “new town planning” in the Tung Chung (at the west of Hong Kong, where the new airport locates). The proximity of this region to the Pearl River Delta lying within Guangdong Province causes serious air pollution to the people in Tung Chung, because a lot of pollutant is brought to this region via air as well as water current. People here are suffering from the poor air quality and the Victoria Harbour in Hong Kong is also suffering from the poor water quality; thus the direct cost in the form of medical cost and the hedonic cost in the form of declining property value in the region are uncovered. After all, workers lost jobs and residents in the Tung Chung also suffered Deindustrialization seems not to improve the air pollution problems much as we expect in the territory, not to say the terrible pollution problem in Guangdong (due to the relocation of the Hong Kong factories). It is partly attributable to the poor urban planning by the Hong Kong government, but what the main reason is the uncontrolled industrialization in the Mainland China - the pollution cost is externalized. In fact, pollution problems still exist in another place (i.e. Guangdong instead of Hong Kong). So, the problems in developed countries or cities (e.g. Hong Kong) get improvement at the expense of some other less developed countries or cities, and sometimes the improvement may not be as perfect as we expect.

Hong Kong is a politically different region from the Guangdong Province with different political system, although the sovereignty of the two are both belong to China. At first glance, Hong Kong can take more effective actions to solve the problems since they are under the same “boss”, however, the fact is Hong Kong can do nothing other than tedious negotiation.

Anonymous said...

^^ nice blog!! ^@^

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