Author Topic: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)  (Read 661 times)

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Offline Jeffrey

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The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« on: August 31, 2008, 10:14:40 AM »
Sort of a Labor Day thread:

KJPs excellent photo-essay inspired this statistical look at the economic structure of the Youngstown area, AKA the Mahoning Valley.   Here , as with my looks at Dayton, I use County Business Patterns database to look at the economic sectors of Trumbull and Mahoning Counties, grouping employment by NAICS economic sector and subsector, using the most recent CBP data, from 2006.

As you all know, though the large scale integrated steel industry has disappeared, the Youngstown area is still a metro area of well over 100,000 people, so there is still employment there.  This quick look aims to see what that is, but will also take an in –depth as to what’s happened with manufacturing, since this was such a great economic force for that area.

I’ll look at the area as a whole: Mahoning & Trumbull counties, then at Mahoning County in some detail, as that is the primary city of Youngstown.

Here is the area from space,  Ohio’s Green and Pleasant Land.   I note the Youngstown(Mahoning County), Warren (Trumbull County), and the Lordstown GM plant, which is important beyond its size on the map.



First a discussion of NAICS coding.  This is a coding system that was developed after NAFTA, to provide a way of classifying business establishments.  It goes back to 1998.  Before that there was the Standard Industrial Classification, or SIC, which is not directly comparable to NAICS.

This is a hierarchy of codes, breaking business establishments (and their employees) into various sectors and subsectors..  If there is a limited amount of firms, or the sector is small, data will be suppressed for that sector., yet the total for a county remains, so one can come up with an indirect measure for “other” industries, including suppressed data. CBP provides groupings and numbers by NAICS for employees, payroll, and number and size of business establishments. How accurate this is I don't know.

Also, this data is for private sector employment, not including local, state, and federal government, nor the staff at Youngstown State University.  This isn’t a big deal if one is interested in the performance or structure of the private sector economy, but note that large public institutions like YSU could have an economic impact on things like restaurants, retail , and so forth, by pumping income into the area.

So, for the two counties, employment & annual payroll by sector:



Mahoning Valley Employment.



As one can see manufacturing, though still large, is a small % of overall employment.  Other large sectors are health care & social services (as in Dayton), but things are pretty much diversified beyond that.   

Note that within manufacturing the large role played by “Transportation Equipment”, which probably is the Lordstown GM plant plus auto parts makers.  Primary Metals, which would include iron and steel production, apparently still is a player in the valley as of 2006.

Mahoning Valley Annual Payroll



Looking at payroll, one can see manufacturing is still on top, and the share of the auto parts and assembly is quite large within this sector.  Primary metals is also a large subsector, but its equivalent to other economic sectors,  with  a payroll less than health care, accommodation and food service, and retail trade.

“We’re Still Here”:  a look at Mahoning County/Youngstown.

Springsteens’ “Youngstown” is the most famous song about the economic plight of this area.  Yet, for modern Mahoning county I sort of like Si Kahn’s’ “We’re Still Here ”,(2004) with this chorus

We’re still here/
We’re still here/
The mills have gone away/
But we’re still here/
With our neighbors and our kin/
Right here where we’ve always been/
The mills have gone away/
But we’re still here.


…because, after the shutdowns and demolitions, there still are people left in this county, and they are still working. 

As with the previous charts, the employment and annual payroll by sector:





In this case  manufacturing has dropped to fourth place as an employer and second place in payroll.  In both cases the Health Care and Social Services is the top sector.  And note the relative insignificance of primary metals

Yet, one can’t help but pay closer look at manufacturing given the history of the Youngstown steel district, a history for which this region is famous, perhaps as famous in the USA as the Ruhr is in Germany & Europe.

KJP’s photo essay tells the story, but here are the modern numbers:

Mahoning County manufacturing by subsector:



Steel production is “Primary Metals”, There is still some primary metals production going on as of 2006, mostly in aluminum, and some foundries, and such.  If there is large employment in steel production it’s in Trumbull county, not here.

Beyond that is fabricated metals  (which would include machine shops and other fabrication of metals, (like forging, stamping, heat treating, architectural, ornamental, and structural metal items) and machinery manufacturing

Since health care is such a player in the Mahoning County economy here is a quick look on how that sector breaks out, for employment:



I grouped subsectors that might be more oriented to geriatric care (shades of gray), to see how an aging population would impact health care employment.  But it looks like ambulatory care (doctors and specialists offices and walk in clinics, blood donor centers. medical labs, etc.) has a big share of this sector. 

Hospitals are not as big an employer here, though, as they are in Montgomery County.

@@@

So I guess this is what things look like after you lose your major industry.   Since the big shutdowns happened over 20 years ago I’d guess the economy has adjusted by now, so maybe we’re seeing a steady-state situation (just a guess, without running the numbers back to ’98)

Next up a look at Trumbull County and some past trends.
« Last Edit: September 28, 2009, 11:35:56 PM by DanB »

Online KJP

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #1 on: August 31, 2008, 04:46:56 PM »
Glad to be an inspriation!

One correction:  the metro area's population is more than 500,000.
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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #2 on: August 31, 2008, 04:56:14 PM »
This data might also be of interest, and a surprise for many.....


SOURCE: "Steeltown USA -- Work & Memory in Youngstown" by Sherry Lee Linkon & John Russo; University Press of Kansas; 2002.
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Offline MayDay

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #3 on: August 31, 2008, 05:25:16 PM »
"a surprise for many....."

Or a reality for a few - 1980-1984, those years the only cheese in my family's refrigerator was marked "U.S. Government" and came in 5-pound blocks. :-(

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #4 on: August 31, 2008, 05:29:32 PM »
Ouch, sorry to hear.

But what surprised me is that the employment data from later years shows the employment situation improved dramatically, both in terms of total additional jobs and reduced unemployment. But I'd like to see what the per-capita income and per-household income was for the same time frame and how they compared to national statistics.

BTW, it's pretty apparent there is a missing digit in the 1994 labor force figure.
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Offline mrnyc

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #5 on: August 31, 2008, 06:06:33 PM »
great job on pulling this thread together.

the rustbelt posterchild economy takes two steps forward and three back. definately more diverse. unfortunately most likely for less pay.

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #6 on: August 31, 2008, 08:14:50 PM »
BTW, I added some pictures to the Youngstown Steel 1977-Today photo gallery which show the fight to save the steel mills. I also provided links to pictures (and posted an awesome panorama shot of US Steel's Ohio Works) in the Part One (1844-1977) photo thread.
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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #7 on: September 01, 2008, 12:00:00 AM »
http://www.burghamfamilytree.com/Places%20pages/youngstown.htm

The end of a steel dynasty

The closing of the steel mills has had a profound impact on the city. The number of people living in the city has dwindled to about half its peak in 1930 to less than one hundred thousand today. Neighborhoods that once were alive with people are now nearly empty.

See:

Ethics of a Plant Shutdown in Youngstown: by Don Burgham

We're "Steel" Running: by Robert Moss

An economic report compiled by the Pace Associates of Chicago, dated June 1951, gave several reasons why the "high cost of producing steel in the Youngstown area makes the district a marginal producer". Youngstown is landlocked. Iron ore being shipped from Michigan had to be off-loaded at Ashtubula and sent by rail, while the facilities at Gary, Indiana and Buffalo, New York received their shipments by barge. Another problem was the lack of cooling water. Re-circulation of the cooling water raised its temperature to one hundred thirty degrees, making it more difficult to cool the steel. It cost an additional three to five dollars per ton to produce in Youngstown. At ten million tons per year, this cost was a significant thirty to fifty million dollars annually. In the 1950's, the Youngstown Sheet and Tube Company invested $100 million in the expansion of their mills in the Indiana Harbor while other producers increased capacity in areas other than Youngstown. Capacity in Pittsburgh increased from 22,385,461 to 26,145,000 tons between 1951 and 1953 while capacity in Youngstown went from 10,065,800 to 10,205,800 tons in the same period.

 In January of 1975 the Northern Ohio Urban System (NOUS), an urban planning firm from Cleveland, produced a document entitled A Look At Youngstown's Future. In the summary of that report the authors noted that in 1969 "nearly 37,000 persons of a manufacturing labor force of 81,000 in the Mahoning and Trumbull Counties worked in blast furnaces, rolling mills, and closely aligned metal industries." The fate of Youngstown in the year 2000 was dependent to a large degree on what was done to revitalize the steel industry in the valley.

The report quoted another study of industry analysis in Ohio, noting that at least 44 percent of plants and equipment in Ohio were obsolete. It further noted that "the landlocked firms in Youngstown were being allowed to deteriorate. The decision to close them down permanently or completely modernize them must be made by 1975." Youngstown and Warren had the highest rate of obsolescence. Eighty percent of their plants and equipment were over 10 years old. Predicting the future, the report sounded a sharp warning that "if existing commitments to modernize the facilities are not carried out and if additional commitments are not forthcoming, Youngstown will find it difficult to maintain its position as a major industrial center."

This analysis led NOUS to the conclusion that even if the investments that were necessary to maintain the level of employment in the steel industry were met, Youngstown would not create any additional employment in the future. Furthermore, the outlook for expansion of the steel industry was not expected to keep up with the rest of the economy's growth. Thirdly, firms involved with supplying the steel industry were not going to expand even if the necessary investments were made in the steel industry. The study said that if everything went right for Youngstown the most that was to be expected was a no growth economy.

Without investments forthcoming, vultures were soon circling the city. In 1969, Lykes, a ship building and real estate firm out of New Orleans, leveraged a buy out of the Youngstown Sheet and Tube Company. Not only did Lykes not make the necessary investments, they took the profits from the company and invested them in their non-steel subsidiaries. In 1977, Lykes lost control. Losses piled up; the nation was in a recession; the alternative was to shut down the Campbell Works. Approximately 4,100 workers were told they were out of work overnight.

The closing sent shock waves through the community. For whatever reason, Lykes gave no warning to the community. On Monday September 19,1977, the announcement was made and by the end of the week the gates were closed. There were no programs in place to ease the burden of unemployment. Health and human service agencies were not permitted access to the company records or even the names of the laid off workers. Furthermore, any communication by company officials with outside agencies would be punished by "blacklisting". The officials that were making the decisions were not in the community and there was no communication of their intentions Terry Buss explains:

The effect of this policy by the Lykes Corporation is that a company, which had dominated the area economy for 77 years, closed its largest facility in a matter of weeks. It left behind unemployed workers, empty buildings, and rust coated, antiquated, useless facilities (Buss, 22).

After the closing, Lykes remained in financial trouble and sought to merge with LTV which owned Jones and Laughlin Steel Corporation. On June 21, 1978, Attorney General Griffin Bell approved the merger over the objections of his staff. As soon as the merger was approved LTV closed down the Briar Hill works putting an additional 1,400 out of work.  (Note: December 29, 2000, the LTV Corporation, along with 48 subsidiaries, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code.)

The closings continued. Youngstown was devastated by a wave of plant closing that wiped out three-quarters of its steel jobs and slashed manufacturing employment from 93,000 to below 50,000 (Buss, 3). Unemployment reached a staggering 30 percent. The carcass of the steel industry had been picked clean.

In the mean time, the downtown was in the midst of an urban renewal project known as "the Central Business District Urban Renewal Area No. 1, Project Ohio R-81". It had the best of intentions. Its aim was to "eliminate structurally substandard commercial and industrial uses . . . Construct and reconstruct streets . . . to enhance the area as the focal point of the Youngstown Central Business District . . . Provide an adequate supply of off street parking facilities . . . and provide Architectural and financial advice to property owners and tenants" (Project R-81).

Most of the Central Business District on the East End was demolished in the Urban renewal project. The renewal did result in a new office structure and a new parking facility. Federal Plaza was created as a pedestrian walk way. To accomplish this, the major east-west traffic axis was eliminated and the north-south axis allowed the only flow of traffic through the central square. Given what was happening to the industrial base of the community a quarter of a mile away, investment potential dried up and the central business district was left with an abundance of vacant land. Much of the development that has occurred is more suburban in character due to the changes in zoning laws that respond to the need for on-site vehicular parking.

The problems of the downtown grew in the 1950's when the movement of people from the inner-cities to the suburbs began. Movement in Youngstown was even more dramatic than many other cities of its size. In 1960, for example, retail sales in the Standard Metropolitan Statistical Area increased 16.6 percent while the sales in the Central Business District fell by 27.1 percent. Cities of similar size were off by 14.9 percent.

The largest mall developer in the country, Edward J. DeBartolo, is headquartered in Boardman. The Boardman plaza, one of the DeBartolo Corporation's early developments, was built in the 1950s. The company took advantage of the demographic shifts that were occurring. The problems associated with living in a city that was environmentally polluted from the emissions of the mills precipitated a shift to the suburbs even before it occurred in other cities. This shift was eased by the automobile that became the dominant and the preferred mode of transportation.

Youngstown's population peaked in the 1930 census with 170,002 residents, while the county population stood at 236,142. From that point on a trend of steady decline in the city population continued while the county population grew. By 1980 the city population was 115,436, while the county stood at 304,545. The 1990 census reported 95,732 city residents and 264,806 within the county. Between 1970 and 1990 the population of Youngstown and the county lost 40,000 residents.

The decision of the steel companies not to modernize their operations here was, in the final analysis, the reason for the collapse of the steel industry. Reliance on outdated technology, e.g. open hearth furnaces, meant that it was only a matter of time before the operations would become obsolete. The transportation of raw materials remained a problem. However, if the mills had installed the Basic Oxygen Process (BOP), a process that reduced the time to "cook" the molten metal from nine hours to less than one hour, they could have remained competitive.

Even more advanced than the BOP is that of the Electric Furnace. This technology does not rely on the costly transportation of raw materials. The basic steel making ingredient is scrap steel, which is in abundant supply in the region. Decisions made in the board rooms miles away from the affected people determined what happened in towns like Youngstown.

North Star Steel, which operates in the old Briar Hill plant, uses the Electric Furnace. The steel pipe that is produced here is made from scrap metal that was once a part of the steel buildings, where thousands were employed. North Star employs 250 people.

Today the city is digging its way out of the ashes. As many as 10,000 new jobs have been created since 1983. New industrial parks in the Salts Spring area and on the LTV property east of the downtown are home to new smokeless industries and distribution centers. Youngstown must build its future not on what has passed but on what is ahead.

 

References:

Buss, T. & Redburn, F. (1983). Shutdown at Youngstown: Public policy for mass unemployment. Albany: State University of New York Press.

Youngstown Sesquicentennial Committee, (1953). Youngstown grows with Ohio.
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Online KJP

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #8 on: September 01, 2008, 12:59:48 AM »
Here's an excellent report. Pay particular attention to Chapter 5 (starts Page 52), which has some ideas for Youngstown and other cities regardless of size to follow........

https://idea.iupui.edu/dspace/bitstream/1805/1635/1/Thesis_with_changes_accepted_050308.pdf
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Offline Jeffrey

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #9 on: September 01, 2008, 12:11:11 PM »
^
Great information up there!  I might want to chart out that employment stats at post # 2, at least prior to 1990, as that seies starts to add Columbiana county, and I just look at Trumbull and Mahoning.  Also, an interesting state...80,000 in manufacturing, and 37,000 in primary metals, or basic steel.  Compare that to today.


Offline Jeffrey

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #10 on: September 01, 2008, 12:11:38 PM »
Finishing up that Mahoning Valley economics look, here is Trumbull County, both employment and annual payroll





The story here is the big impact of auto assembly and auto parts, as this is a big part of employment and a real big part of the annual payroll, pumping a lot of money into the economy.  This subsector just dominates manufacturing, but also is a major slice of the economic pie.

Also, I note that within the primary metals sector, iron and steel production is sill active in this county, compared to next door Mahoning.  Is anyone familiar enough with this area to say whether there are mills still in operation (my hunch something more advanced than basic steel, like mini-mills using electric furnaces).

1990s-2000sTrends

SIC and NAICS can be used to track generalized numbers for overall employment, manufacturing, and primary metals, as they are somewhat comparable, for 1993 on.

This will miss the big shift between 1997-1988, based on the chart provided by KJP, but gives a good picture of what was happening in the recent past.

Looking and Primary Metals, which would include what’s left of the steel industry.  Employment is pretty stable, slightly dropping, for Mahoning, but more volatile for Trumbull with a big drop during the recession.  Maybe another mill shut down?



For the counties as a whole, looking and manufacturing and overall employment, but also inserting Primary Metals, to show relative employment.

For Trumbull



For Mahoning



What’s noticeable is how flat these lines are, with the exception of the early 2000s recession.  Perhaps this indicates that this area really has achieved a steady state economy, not adding jobs, but not failing, either.  But note that there is a sort of phase shift after the recession:  employment is a t a flat line before, then drops, but stays at a flat line within a lower range.  One wonders if recessions sort of cull employment, and these counties sort of stairstep down after each recession.

Given this steady-state employment situation, one can see why there would be net out-migration if there are more people entering the labor force than there are positions open.  One can speculate on the demographic implications of this.


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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #11 on: September 01, 2008, 12:21:41 PM »
Quote
Is anyone familiar enough with this area to say whether there are mills still in operation (my hunch something more advanced than basic steel, like mini-mills using electric furnaces).

A former Republic Steel mill on the south side of Warren is still in operation. It was then part of LTV's empire and then became Warren Consolidated Industries until Mittal took it over.

Unlike most other steel mills in the Mahoning Valley, this complex is still largely intact due to numerous investments at modernizing the plant. Shows what could have happened at one or more of the mills farther down the Mahoning River. Copperweld on Warren's north side has been in operation to varying degrees but is now mostly shut down, and that's likely responsibile for the blips in your trendlines.

P.S. Your pie charts for Trumbull County are revealing but not surprising. Despite there being more jobs in retail, hospitality and health care compared to manufacturing (39 percent to 27 percent), the fewer manufacturing jobs create almost double the payroll and economic impacts as retail/hospitality/health care (46 percent to 25 percent).

THAT'S WHY the Mahoning Valley has never recovered from the collapse of the steel industry even though there are 50,000 more people employed today than when the mills were still active in the 1970s. And until we start paying people what they're worth, people in the region (and indeed this entire country) never will enjoy a quality of life that their parents and grandparents had.
« Last Edit: September 01, 2008, 12:35:11 PM by KJP »
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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #12 on: September 01, 2008, 12:38:08 PM »
Very nice series of analysis.  I never realized that Youngstown didn't have the steel mills.  That goes to show the parochial nature of politics in Ohio, not that Youngstown could've done much.  It would seem that world economics were at work here.  It probably saved Cleveland and Pittsburgh from losing steel jobs during that period of time. 

 Another thought I had is the ecological factor.  So these steel plants in Mahoning county were using ancient technology and needed to upgrade anyways.  It would appear that Pittsburgh would be downwind of Youngstown.  My family is from Pittsburgh and we constantly were driving most weekends to visit through the 70s and 80s and I recall as soon as we got into Pennsylvania we could smell the sulfur.  Sometime in the early 80s it became barely noticeable and in the 90s really having to take a whiff in to even smell any sulfur.
« Last Edit: September 01, 2008, 12:53:43 PM by audidave »

Offline Jeffrey

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #13 on: September 01, 2008, 12:39:59 PM »
^
Yeah, I thought it was a good contrast too, the impact of automaking combined with whats left of primary metals is a big slice out of the payroll pie. 

Like you've said, it would be interesting to do some annual payroll comparisons adjusted for inflation. I would have no idea how to find this info out, as my source (CBP) goes back only to 1993, and I dont know a good way to ajdust for inflation.

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #14 on: September 01, 2008, 02:21:53 PM »
It probably saved Cleveland and Pittsburgh from losing steel jobs during that period of time. 

Naw, it didn't. There are no more steel mills in the city of Pittsburgh although there are some south of town along the Monongahela River (yet many facilities are gone there, too). Cleveland, meanwhile, has lost perhaps half of its steelmaking facilities and 90 percent of its steel jobs. So being on a navigable waterway wasn't a difference maker as former Congressman Kirwan would have had us believe. But foreign trade practices, lack of capital reinvestment, high labor and environmental costs and, yes, even transportation costs were all factors.
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Offline ColDayMan

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Re: The Mahoning Valley Economy in 2006 (Youngstown) (Pie Charts)
« Reply #15 on: September 02, 2008, 05:45:36 PM »
Fantastic!
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