Black Monday and the Betrayal of the American Worker

Submitted by Jackson Andrews, @liftoffstocks

Over the last 50 years, the United States has gone through a dramatic change, both demographically and economically. Every society experiences some degree of change, but the economic realignment that the United States has endured is unlike anything any society in history had ever inflicted on itself. 

Today there is an area dubbed the “Rust Belt”, an area stretching from Ohio to Upstate New York, and includes many states in that radius. A little over half-century ago, this region produced many goods, the companies of which proudly exclaimed said goods were “Made in America”. It was a time of almost universal patriotism, regardless of whether it genuine or merely a façade. But this region didn’t only produce goods, it produced jobs for blue collar workers, in turn allowing stable families to form which helped to form a stable community

Youngstown, Ohio is a city in the Rust Belt that best exemplifies this type of economic change. Up until the dawn of the Revolutionary 1960’s, Youngstown was seen as an industrial hub and something that all cities could aspire to. It could provide good paying jobs to blue collar workers and maintained a civic atmosphere in which residents felt a part of a genuine community.

The main industry in town was Steel, with Youngstown Sheet and Tube being one of the most prominent of these companies. One of the first instances of the animus of the company toward its workers occurred in 1952. Negotiations had broken down between the union and the company, and the workers had decided to strike. Due to the Korean War, which was ongoing at the time, President Truman intervened and attempted to nationalize the company. The Steelworkers were gracious as the government was going to meet all of their demands in order to keep production going to bolster the war effort. 

Rather than simply meet the demands of the workers, the company filed legal action against the Federal Government, taking the case all the way to the Supreme Court where it would emerge victorious. By suing the government, they put both their workers and the war effort in jeopardy just to please their shareholders. This attitude is prescient and is a precursor for what would become the dominant view espoused by American corporations. 

In 1969, 17 years after the company was victorious against both its workers and the government, it would merge with the Lykes Corporation in a move that would largely seal the fate of its thousands of workers in Youngstown. In comparison to Youngstown S&T, the Lykes Corporation held a very large amount of debt and did not provide a clear benefit to Sheet and Tube. In the press release announcing the merger, S&T says,“We believe the merger offers significant benefits to shareholders and the company”. Nowhere in the release is the city of Youngstown or the thousands of workers employed by S&T mentioned, only shareholders who largely lived out of town. We would see the effects on both the workers and the city a mere 8 years later

​For most workers waking up to go to the mill, the morning of September 19, 1977 seemed like a normal day. They had breakfast, saw the kids off to school and gave the wife a kiss before heading off for another hard day’s work. Not long after arriving, however, all workers realized that this would be a day unlike any other they had experienced. That morning the company abruptly announced that they were laying off a staggering 5,000 workers, a day that would be dubbed “Black Monday” by those living in Youngstown. Within five years, that number would climb to 50,000 in a city which at the time had a population just over 160,000. US Steel would leave two years later, essentially putting the city to the sword in order to please shareholders. What most people do not understand are the auxiliary effects of these actions. The restaurants, stores, and malls which serviced these workers would also go out of business. Those who worked at those places were also now out of work, creating a vicious cycle that would destroy the city and turn it into a wasteland. 

​The cause for this specific instance was a combination of the things that plague the country today. The merger from 8 years earlier that brought a lot of debt on the company had begun to take its toll. The company needed to cut costs in order to pay its large debt which it only acquired to give a short-term gain to shareholders. There was also an influx of cheap Chinese and Japanese Steel. Though lower quality than American Steel, the massive dumping nevertheless caused the price of steel to drop. The price drop combined with a company mired in debt creating a death spiral for the company and the city.

​If one wants to really take note of the carnage, just view two photos of the city side-by-side, one from the 1950’s and another from present day. The photo from the 1950’s will show a civic spirit and streets filled with people who are living the American Dream. The present photo shows what looks like the apocalypse or a city that has been bombed out, abandoned and hollowed out buildings with few descendant’s remaining of the citizens that populated the successful city of the 1950’s. 

This city is emblematic of what has occurred to many areas across the US, there are hundreds of Youngstown’s. The question is how did this happen? It is really quite simple, a lack of tariffs, the financialization of economy, and rootless elites who do not care about the communities they destroy in the pursuit of an extra dollar of profit. If there were tariffs on steel, of say 20%, companies would ideally be much more incentivized to buy American rather than purchase foreign but lower quality steel. Naturally, there were many people who did not want tariffs. Companies manufacturing products which use steel as an input would rather lobby against tariffs than support their fellow Americans by purchasing goods that were made in the United States. Through the years the method of betraying the worker would progress, from buying foreign to outsourcing to hiring illegal immigrants. It boils down to the fact that our ruling class does not consider themselves “one of us”, but rather are largely rootless and owe their loyalty to the almighty dollar alone, no matter how many lives they destroy in the process.

One Comment Add yours

  1. jrebwestex says:

    Agreed. People of the ruling class are not “one of us.” They call themselves an international people. Instead of the dollar, however, I believe it is more accurate to say it is the shekel that they are loyal to.

    Like

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