deindustrialization 993

service sector industries included health and
health care, education, social services, personal
services, and more recently financial, insurance,
and real estate services, and hospitality/tour
ism. The increased demand for goods was
accompanied by a push for cheaper production,
which was made possible through automation,
lower rents or land costs, and less expensive
labor. The increased demand for services
occurred during a time of increases in educa
tional attainment, increases in female labor
force participation, and increases in civil rights.
Both land and labor were cheaper in more
rural areas, so initially deindustrialization
meant a move from traditional manufacturing
centers in the Northeast and Midwest, also
known as the Frostbelt, to the South or the
Sunbelt. Geographically, land was also cheaper
outside cities, so when manufacturing plants
relocated, they did so in more rural areas.
Because of urban growth and residential pat
terns, less skilled workers were generally con
centrated in the older areas of cities and towns.
More affluent families and skilled labor lived
in the suburban fringe. In former manufactur
ing cities, when service industries did expand
and enter into urban areas, they brought jobs
that required skills urban residents lacked.
Lower skilled services and the remaining man
ufacturing jobs relocated or developed in the
suburbs. The result is often referred to as
spatial skills mismatch (Kain 1968; Kasarda
The decline in unionization is also a consid
eration in deindustrialization. As labor became
less powerful and capital more concentrated,
there was less potential for resistance when
manufacturing reduced jobs or relocated. Tra
ditional blue collar jobs, with high levels of
unionization, were slowly disappearing. The
diverse service sector, dominated by white
collar and pink collar jobs, has yet to develop
strong union representation.
As manufacturing left for cheaper markets,
the service sector expanded. Production of ser
vices had advantages not available to goods
producing industries. First, horizontal space
was less important. Skyscrapers provided an
effective way for industry to grow in space
without having to purchase large tracts of
expensive land. Office buildings rose in the
air, and large cities became centers of financial
and legal services, information processing, and
Demand for skilled labor in the service
sector was very different from traditional man
ufacturing jobs. While most management
manufacturing jobs did not require extensive
formal schooling, service sector expansion
increased the demand for more highly educated
labor and workers skilled in specific areas such
as medicine, the law, and technology. It also
provided a share of lower skilled and lower
paid positions that were often supervised by
the more educated workers.
The expansion of the service sector and the
bifurcation of skills and rewards associated with
employment in these industries contributed
to a shift in the class structure. Many blue
collar jobs that paid living wages were relocated
and the remaining options for workers with
less education were lower skilled and lower paid
service positions. The expansion of higher
skilled services also ensured employment for
the increasing number of college graduates and
persons with professional and postgraduate
training. A related outcome was increases in
low wage earners and an expanding upper wage
class, with fewer workers earning middle
income wages. This shift has implications for
class, race, and gender inequality.
In general, white men and women are more
likely to benefit from these industrial changes
than other race and ethnic groups. Workers
with more access to higher education were
initially best served by deindustrialization. As
the service sector expanded, more women,
especially white women, also entered and com
pleted college and professional schooling. Their
rise in educational levels, later age at first mar
riage and childbearing, and increasing presence
in the labor force all coincided with the increas
ing availability of jobs in areas that were long
accustomed to hiring women. Black women, a
group with a long history of labor force parti
cipation and increasing levels of education, also
stood to benefit from expansion of educational
opportunities. Black men and immigrants with
less education, a group that relied on low
skilled manufacturing jobs, were most disad
vantaged. The decline in unions that occurred
with deindustrialization was an important fac
tor explaining the wage gap between black and
white men.