Op-Ed: Rust Belt Redux?

February 20, 2018

by Mark Franke

Growing up in Fort Wayne in the 1950s, even a youngster like me realized that this was an industrial town. The east end industries employed tens of thousands of workers, General Electric (where my father worked) had three large plants, and there was a strip of heavy industry along Taylor Street on the west side.

By the time I was raising my own family, all this had changed. The dreaded announcement by International Harvester that it was shutting down its Fort Wayne assembly plant in 1983 was simply an exclamation point on an already dismal story of decline. Drive around the Pontiac Street-New Haven Avenue-Meyer Road quadrant today to get a feel for what East Berlin must have looked like after World War II.

Fort Wayne was not alone in Indiana. Gary’s steel mill story is even more sobering. The Kokomo-Anderson region suffered with the decline of the American automakers. Terre Haute’s nemesis was mine closings.

But now Indiana is ranked number one in the U.S. for percentage of manufacturing employment at 18 percent.  According to Congressman Jim Banks’ office, our Third Congressional District is at the top of 435 congressional districts across the nation for manufacturing jobs.

How did we fall so low and rebound so well?

Start with our centrality in the nation’s transportation network. It was the rivers, then the canals, followed by the railroads, and now the highway network that made and makes Northeast Indiana attractive to manufacturers. There is also an innovative and entrepreneurial spirit alive in our region as our two-hundred-year history proclaims. Perhaps most importantly there is a natural economic trend to diversity in products, technology, workers and markets. (These points were emphasized at recent panel discussion on labor history at the Fort Wayne History Center and sponsored by designated;s University Community Conversation program.)

Most recent data show that only two of Allen County’s top ten employers are manufacturers. Tellingly, the top two are the local health systems. More tellingly, four are governmental or quasi-governmental organizations. Of the 12 employers with a full-time equivalent workforce of at least 1,000, only three are manufacturers.

So where are all these manufacturing jobs? Driving around the region would confirm that they are widely disbursed, along interstates and railroads and only sometimes in desginated industrial parks. Nearly all these businesses are what economists would classify as small employers with fewer than 500 workers.

Take for example DeKalb County, just north of Fort Wayne. According to the federal Bureau of Labor Statistics, fully 43 percent of DeKalb jobs are in the manufacturing sector. (The reference point for Allen County is 15 percent, still a high number comparatively.) DeKalb’s manufacturing employment rate is five times the national average. The county has about 120 reported manufacturers with an average workforce of just under 80 employees, well within the economic definition of “small.”

Some would be quick to argue that this is due to low wages in a right-to-work state. Yet the average weekly manufacturing wage last year in both counties was over $1,200. You would have had to work in the banking sector or for the federal government in Allen County to beat that. You couldn’t beat the average wage in any DeKalb employment sector.

So have we reestablished the old Rust Belt mentality here? That answer must be no, for many of the reasons that historically have made us strong in manufacturing. Our Hoosier values and Midwestern work ethic will continue to serve us well in a changing economy because of our most important human capital asset: adaptability.

Perhaps the economic development officials in our region ought to focus more attention on the small employers, manufacturing and other, who are actually creating the jobs for our residents and less on expensive whiz-bang downtown venues financed by the public fisc.

Mark Franke, an adjunct scholar of the foundation, is formerly an associate vice chancellor at Indiana University-Purdue University Fort Wayne.


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