From the ashes of industry: the rise of the service-based economy

As the industrial economy began to experience hardships that became increasingly more difficult to overcome: less demand, unemployment, plant closures, the working class was forced to seek jobs elsewhere. This shift in the workforce led to the growth of the new service economy, which was actually supported by the number of workers who now had to rely on the welfare state and health care system. Due to the organizational structure, which combined public regulation and private administration, the healthcare industry was able to capitalize on the increased demand for its services (Winant). The change did have a number of economic, political, and social consequences, as with any broad change to the workforce structure. This can be seen especially in Pittsburg, Pennsylvania during the 1970-80s. 

Economically, the effects of deindustrialization were catastrophic in Pennsylvania, with unemployment rates at 9.7% in 1981, compared to the 7.8% of the general U.S. population (Winant). The steel industry that Pennsylvania had relied on for so long was heavily in debt to the point that the industry’s largest mill began to shut down and withdraw from the Pittsburgh area. This led to an increase in unemployment to 17.1% in 1983, while it was 10.8% nationwide. The government did not seem to be helping with any programs, and the population of Pittsburgh felt abandoned and like they had no support system. On top of this, Pittsburgh’s metropolitan population shrank by 6.7% between 1980 and 1990, and from 1980-85, “more than 70 percent of net migration was among those under 29” (Winant). With all of these young men leaving the city, the aging population had less support and many ended up having to use their savings to help their kids. The increased unemployment also led to a lot more tension within families, as domestic violence became quite a big issue in the early 1980s. However, many women felt like they couldn’t leave their husbands and break up their homes during such an unstable and financially uncertain time. There was also poorer heqlth during this time, with stress related illnesses, such as heart attacks, sick infants, cancer, and suicide all on the rise. This demand seems to have partially led way to the huge increase in employment in the health care system. 

Based on the journal article, it seems like unemployment compensation and social welfare programs were not made with the consideration that there would ever be a permanent collapse in a well-established, dominant sector of the market. Personally, I think that this unpreparedness is somewhat understandable, especially considering that the government programs had never had to face anything like this before and didn’t have a great way to predict that the downturn would be permanent and not the cyclical kind they were used to. However, I think that the increase in mass incarceration as a “social service” to deal with poverty was a terrible replacement for just investing more into real social welfare programs. I don’t understand why overcrowding the jails was seen as viable replacement for mental health care and welfare support, when they could have used the “$300 million” that went into prison construction to do more good for the community. 

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