Steel crisis
The steel crisis was a recession in the global steel market during the 1973–75 recession and early 1980s recession following the post–World War II economic expansion and the 1973 oil crisis, further compounded by the 1979 oil crisis, and lasted well into the 1980s.
Steel prices dropped significantly as the market became saturated with steel from previous demand, and many steel mills in the Western world were driven out of business. Some areas affected by the steel crisis were the Rust belt in North America, the English Midlands in the United Kingdom, the Ruhr area in West Germany and Bergslagen in Sweden.
United States
Steel production in the United States peaked at 111.4 million tons in 1973, and declined slightly to 97.9 million tons in 1978. By 1984, steel production collapsed to just 70 million tons. The next peak was not reached until 2000, when 100 million tons was produced, before falling to just 86 million tons in 2014. Imports played a role in this decline: from just 146,000 tons in 1946, steel imports reached 24 million tons in 1978 (for comparison, the U.S. imported 34.5 million tons in 2017); the U.S. became a net importer of steel in 1959. The federal government responded with multiple measures in an attempt to protect the steel industry, including import quotas from 1969 to 1973, trigger pricing from 1978 to 1980, and voluntary export restraints from 1983 to 1987. However, these policies had the effect of increasing prices for steel-consuming industries, which led to job losses and inflationary pressures, and the measures were quickly abandoned. [1]
The American Iron and Steel Institute finds employment in the steel industry peaked in 1953 at 650,000 employees.[2] Employment declined to just 512,000 jobs by 1974, approximately when the steel crisis began, and declined further to just 399,000 jobs in 1980 and further still to 236,000 jobs by 1984. Although the bulk of job losses occurred in the 1974-1986 period, steel employment would continue to decline for decades, reaching just 142,000 jobs in 2015. [3]
Although foreign competition played a notable role in the decline of American steel employment, productivity gains have played an even larger role. By 1980, it was estimated that nearly one-fourth of American steel manufacturing was using outdated and inefficient methods and machinery. [4] The number of man hours required to produce one ton of finished steel was 10.1 hours in 1980; this declined to just 1.5 hours by 2017, with some mini-mills requiring just 0.5 man hours. [5] In addition, the strong dollar policy of the U.S. Federal Reserve and the development of new management strategies such as just-in-time manufacturing that call for major workforce reductions also played important roles in hampering U.S. manufacturing competitiveness and reducing employment.
The U.S. city of Youngstown, Ohio was among the hardest-hit areas of the steel crisis, with the announced closure of Youngstown Sheet and Tube on September 19, 1977, still known to locals as Black Monday; which the city has never fully recovered from both economically and socially. [6] Other major steel producing cities, such as Gary, East Chicago, Cleveland, and Toledo, never recovered from the losses in industry and resulting unemployment, depopulation, poverty, and crime.[citation needed]
From 1980 to 1988, U.S. Steel shuttered the 7 least-efficient of its 12 steel mills and slashed its industrial workforce from 75,000 employees to just 20,000, and salaried employees were reduced from 30,000 to just 5,000. By 1989, the American steel industry cut operating costs by 35% and increased labor productivity by 38%. U.S. Steel exported steel profitably for the first time in a decade. [7]
Britain
In Britain, the steel crisis was also a result of controversial political decisions to a degree unlike the United States. The steel industry was nationalized in 1967 by the Labour government. Historian Alasdair Blair states that British Steel Corporation (BSC) had "serious problems" including complacency with existing obsolescent plants (plants operating under capacity and thus at low efficiency); outdated technology; price controls that reduced marketing flexibility; soaring coal and oil costs; lack of capital investment funds; and increasing competition on the world market. Blair argues that by the 1970s the government kept employment artificially high in a declining industry. This especially impacted BSC since it was a major employer in a number of depressed regions.[8] In the 1980s, Conservative Prime Minister Margaret Thatcher re-privatised BSC.
British steel employment numbered 197,000 jobs in 1974, falling to 179,000 in 1977, further still to 112,000 in 1980, and then a severe decline to less than 62,000 jobs in 1984. [9]
European Community
Many major steel producing countries and regions in Europe, such as Luxembourg, the Ruhr area in Germany, southwestern Sweden, Belgium, Italy's Industrial Triangle and the far south, and northern France also suffered immensely during the 1970s and 1980s. Total steel employment across the European Community's 9 member states declined from 795,000 in 1974 to 722,000 in 1977, further still to 598,000 in 1980, and then 446,000 in 1984.
The causes of the declines in these countries were similar to the United Kingdom's: foreign competition (primarily against each other), overcapacity resulting from construction of mills during the post-war boom and integration of markets, and productivity gains. The European Community tripled its steel production during the 1950-1970 period, and remained a net exporter of steel into the 1980s. The end of the post-World War II boom also played a role as markets matured and became saturated and demand for steel peaked in construction, appliance makers, and auto manufacturing. [10]
References
- ^ "The Steel Crisis in the United States and European Community: Causes and Adjustments" (PDF). National Bureau of Economic Research. Archived (PDF) from the original on 9 August 2017. Retrieved 19 October 2018.
- ^ "Barack Obama wrong about size of U.S. steel production, work force". Politifact. Archived from the original on 20 October 2018. Retrieved 19 October 2018.
- ^ Tarr, David G. "The Steel Crisis in the United States and the European Community: Causes and Adjustments" (PDF). National Bureau of Economic Research. Archived (PDF) from the original on 9 August 2017. Retrieved 19 October 2018.
- ^ "Great Lakes States: Trouble in America's Employment Heartland". CQ Press. CQ Researcher. Archived from the original on 31 July 2018. Retrieved 19 October 2018.
- ^ "Profile 2015" (PDF). American Steel & Iron Institute. Archived (PDF) from the original on 6 January 2018. Retrieved 19 October 2018.
- ^ Steven High | Capital and Community Reconsidered: The Politics and Meaning of Deindustrialization | Labour/Le Travail, 55 Archived 2016-11-14 at the Wayback Machine. Journal of Canadian Labour Studies. Retrieved on 2016-11-13.
- ^ Magnet, Myron. "THE RESURRECTION OF THE RUST BELT Deindustrialization? Economic violence? The heartland says humbug. When the going got tough, its industries shaped up. Now they're more competitive than ever". Fortune Archive. Fortune Magazine. Archived from the original on 6 October 2018. Retrieved 5 October 2018.
- ^ Alasdair M. Blair, "The British iron and steel industry since 1945." Journal of European Economic History 26.3 (1997): 571.
- ^ "The Steel Crisis in the United States and European Community: Causes and Adjustments" (PDF). National Bureau of Economic Research. Archived (PDF) from the original on 9 August 2017. Retrieved 19 October 2018.
- ^ "The Steel Crisis in the United States and European Community: Causes and Adjustments" (PDF). National Bureau of Economic Research. Archived (PDF) from the original on 9 August 2017. Retrieved 19 October 2018.
Bibliography
- Birch, Alan. Economic History of the British Iron and Steel Industry (Routledge, 2013).
- Blair, Alasdair M. "The British iron and steel industry since 1945." Journal of European Economic History 26#3 (1997): 571+.
- Dudley, G. F., and J. J. Richardson, eds. Politics and Steel in Britain, 1967-1988: The Life and Times of the British Steel Corporation (1990), ISBN 978-1855210721
- Evans, I. M. "Aspects of the Steel Crisis in Europe, with Particular Reference to Belgium and Luxembourg," Geographical Journal Vol. 146, No. 3 (Nov., 1980), pp. 396–407 in JSTOR
- Meny, Yves, and Vincent Wright, eds. The Politics of Steel: Western Europe and the Steel Industry in the Crisis Years (1987) excerpt and text search
- Rhodes, Martin; Wright, Vincent. "The European Steel Unions and the Steel Crisis, 1974-84: A Study in the Demise of Traditional Unionism," British Journal of Political Science, Apr 1988, Vol. 18 Issue 2, pp 171–195 in JSTOR
- Scheuerman, William. The Steel Crisis: The Economics and Politics of a Declining Industry (1986)
- Warrian, Peter. A Profile of the Steel Industry: Global Reinvention for a New Economy (Business Expert Press, 2016).
- v
- t
- e
- Crisis of the Third Century (235–284 CE)
(1000–1760)
- Great Bullion Famine (c. 1400–c. 1500)
- The Great Debasement (1544–1551)
- Dutch Republic stock market crashes (c. 1600–1760)
- Kipper und Wipper (1621–1623)
- Tulip mania crash (1637)
- South Sea bubble crash (1720)
- Mississippi bubble crash (1720)
(1760–1840)
- Amsterdam banking crisis of 1763
- Bengal bubble crash (1769–1784)
- British credit crisis of 1772–1773
- Dutch Republic financial collapse (c. 1780–1795)
- Copper Panic of 1789
- Panic of 1792
- Panic of 1796–1797
- Danish state bankruptcy of 1813
- Post-Napoleonic Irish grain price and land use shocks (1815–1816)
- Panic of 1819
- Panic of 1825
- Panic of 1837
- European potato failure (1845–1856)
- Great Irish Famine
- Highland Potato Famine
- Panic of 1847
- Panic of 1857
- Panic of 1866
- Black Friday (1869)
(1870–1914)
- Panic of 1873
- Paris Bourse crash of 1882
- Panic of 1884
- Arendal crash (1886)
- Baring crisis (1890)
- Encilhamento (1890–1893)
- Panic of 1893
- Australian banking crisis of 1893
- Black Monday (1894)
- Panic of 1896
- Panic of 1901
- Panic of 1907
- Shanghai rubber stock market crisis (1910)
- Panic of 1910–1911
- Financial crisis of 1914
(1918–1939)
- Early Soviet hyperinflation (1917–1924)
- Weimar Republic hyperinflation (1921–1923)
- Shōwa financial crisis (1927)
- Wall Street Crash of 1929
- Panic of 1930
(1945–1973)
- Kennedy Slide of 1962
- 1963–1965 Indonesian hyperinflation
(1973–1982)
- 1970s energy crisis (1973–1980)
- 1973 oil crisis
- 1973–1974 stock market crash
- Secondary banking crisis of 1973–1975
- Steel crisis (1973–1982)
- Latin American debt crisis (1975–1982)
- 1976 British currency crisis
- 1979 oil crisis
- Brazilian hyperinflation (1980–1982)
Great Regression
(1982–2007)
- Brazilian hyperinflation (1982–1994)
- Souk Al-Manakh stock market crash (1982)
- Chilean crisis of 1982
- 1983 Israel bank stock crisis
- Black Saturday (1983)
- Savings and loan crisis (1986–1995)
- Black Monday (1987)
- 1988–1992 Norwegian banking crisis
- Japanese asset price bubble crash (1990–1992)
- Rhode Island banking crisis (1990–1992)
- 1991 Indian economic crisis
- 1990s Swedish financial crisis
- 1990s Finnish banking crisis
- 1990s Armenian energy crisis
- Cuban Special Period (1991–2000)
- Black Wednesday (1992 Sterling crisis)
- Yugoslav hyperinflation (1992–1994)
- 1994 bond market crisis
- Venezuelan banking crisis of 1994
- Mexican peso crisis (1994–1996)
- 1997 Asian financial crisis
- October 1997 mini-crash
- 1998 Russian financial crisis
- 1998–1999 Ecuador economic crisis
- 1998–2002 Argentine great depression
- Samba effect (1999)
- Dot-com bubble crash (2000–2004)
- 9/11 stock market crash (2001)
- 2001 Turkish economic crisis
- South American economic crisis of 2002
- Stock market downturn of 2002
- 2002 Uruguay banking crisis
- 2003 Myanmar banking crisis
- 2000s energy crisis (2003–2008)
- 2004 Argentine energy crisis
- 2007 Chinese stock bubble crash
- Zimbabwean hyperinflation (2007–present)
(2007–2009)
- 2007–2008 financial crisis
- September 2008
- October 2008
- November 2008
- December 2008
- 2009
- Subprime mortgage crisis
- 2000s U.S. housing market correction
- U.S. bear market of 2007–2009
- 2008 Latvian financial crisis
- 2008–2009 Belgian financial crisis
- 2008–2009 Russian financial crisis
- 2008–2009 Ukrainian financial crisis
- 2008–2011 Icelandic financial crisis
- 2008–2011 Irish banking crisis
- 2008–2014 Spanish financial crisis
- Blue Monday Crash 2009
- European debt crisis
- Greek government-debt crisis
(2009–present)
- 2009 Dubai debt standstill
- Venezuelan banking crisis of 2009–2010
- 2010–2014 Portuguese financial crisis
- Energy crisis in Venezuela (2010–present)
- Syrian economic crisis (2011–present)
- August 2011 stock markets fall
- 2011 Bangladesh share market scam
- 2012–2013 Cypriot financial crisis
- 2013 Chinese banking liquidity crisis
- Venezuela economic crisis (2013–present)
- 2014–2016 Brazilian economic crisis
- Puerto Rican government-debt crisis (2014–2022)
- Russian financial crisis (2014–2016)
- 2015 Nepal blockade
- 2015–2016 Chinese stock market turbulence
- 2015–2016 stock market selloff
- Brexit stock market crash (2016)
- Venezuelan hyperinflation (2016–2022)
- 2017 Sri Lankan fuel crisis
- Ghana banking crisis (2017–2018)
- Turkish economic crisis (2018–present)
- Lebanese liquidity crisis (2019–present)
- Sri Lankan economic crisis (2019–present)
- COVID-19 pandemic
- Chinese property sector crisis (2020–present)
- 2021–2023 inflation
- 2022 Russian financial crisis
- 2022 stock market decline
- 2023 United States banking crisis