Economic Scars Remain in the Mon Valley
February 18, 2010
The southeast region of Pittsburgh, Pennsylvania, called the Mon Valley, was once a bustling metropolis filed with shops, stores, and full employment, largely due to a thriving steel industry.
This is where the Monongahela River snakes through dozens of tiny little towns, where thousands of locals once worked in the steel mills, located along the banks of the river.
The area now is a shell of its former self, but it has recovered.
Steel collapsed during the great recession of the 1980s, and with it, 50,000 local jobs were lost, and thousands more in related industries. Only recently has this area found new companies and retail development, to replace vacant steel mill lots located along the river.
We are now in the grip of another great recession, and other industries are going through hardships, too. Unemployed workers are hopeful, but the reality is that few companies are actually hiring to any great extent, so fear and frustration continue to mount.
The steel industry eventually did come back from the 1980 recession, but it survived as a streamlined and modernized industry, that does not require the number of employees it once did.
Over 8 million jobs have been lost during this current recession, which started in December, 2007, and weekly jobless claims are continuing to rise. Just today, the U.S. Department of Labor reported an increase of 34,000 weekly jobless claims over one week ago. The nation’s unemployment rate is 9.7%, yet it is 15% or better in some areas of the country.
The Obama administration is working to unveil a jobs stimulus package, this time targeting tax credits to employers who hire workers, and additional cash for state governments, and another extension of unemployment compensation benefits, probably through the end of the year.
Still, jobs in many industries will struggle to come back to full employment levels, namely manufacturing, construction, retail, and finance (mortgage, securities, credit).
Thousands of construction projects have been halted or scrapped, the housing and credit markets are still devastated, and the retail industry has seen some stunning bankruptcies, including that of electronics and personal computer retailer Circuit City.
The tough economic news is also troubling to the Obama administration from a political standpoint, as the 2010 mid-term congressional elections are just nine months away. The Republicans are poised to pick up seats in both the House and Senate if the current economic trend continues.
Voters see Congress and the Obama administration as struggling to find solutions to jumpstart hiring, and although the administration takes credit for halting the depth of the recession, an increase in monthly hiring is what voters want to see.
Consumers are also continuing to cut their spending, and that will make it difficult for a quick recovery in the retail sector.
There is a valuable lesson to be learned from the experiences of a little known region outside Pittsburgh called the Mon Valley. The economic rebuilding process is a long and difficult one, and no one should expect things to turn around anytime soon.
The situation will get better, and eventually the hardest hit industries, such as construction, manufacturing, retail, and banking will thrive again.
We can only hope the economic recovery happens quickly as no one wants a repeat of the long drawn out process in the Mon Valley during the 1980s.