As global competition increased in the manufacturing industry and reduction in employees was required to keep up, around 150,000 manufacturing jobs were lost between the late 1970s and early 1980s (Winant 180-181). Since the number of jobs in the manufacturing industry was greatly reduced and many people had been laid off, the people who previously depended on these jobs had the option to either be unemployed, or take a lower-paying, service industry job. Due to this, the working class was “recycled,” in a way, for a new service-based economy.

Especially in Pennsylvania, home of U.S. Steel, there were many wide reaching consequences. Notably, there were many social consequences in terms of race. In the steel industry, there was a significant bias towards staffing the “hottest, dirties department” with Black workers (Winant 183). As such, when blast furnaces were being shut down early on, for example, Black workers were laid off, while white workers were not necessarily as much. These practices resulted in a series of lawsuits that brought affirmative action hiring into the steel industry, employing Black workers in other departments as well. There were also changes to the economic landscape, specifically in the steel unions. The ENA, an agreement between unions and steel companies which traded the right to strike for higher wages, was facing major backlash, as nothing was stopping the steel companies from simply laying people off to cut costs (183). As a result, unions began to condemn the agreement.

Eventually, near the end of the 1970s, the steel industry began falling even faster, laying off more and more workers (Winant 186). This resulted in stagflation and inflation, and, once seeing the the steel industry was the center of the economic decline, the Federal Reserve pushed harsh monetary policies onto the industry to try to end it. As a result, massive unemployment and recession ensued. Due to the racial biases discussed earlier, as well as the biases against female employment, many Black women began to enter the labor market in order to bring in money that the men could not, specifically in the service industry (Winant 180). As unemployment soared, the limits of the welfare state were heavily tested, and many of its institutions didn’t fare well (Winant 181, 190). Realizing the inadequacy of the current institutions, many people began protesting against the poorly equipped social systems, resulting in increased efforts to fix the crisis by policymakers, such as Act 75 which tried to employ those who were relying on the existing systems.

Social welfare programs could have been under-equipped to deal with this for a couple of reasons. Winant writes that industrial employment had provided a “net of economic security” (180), so I wouldn’t be surprised if these programs simply didn’t need to be as powerful before the economic transition. Industrial employment had been present in America for a long while at that point, and many people likely didn’t think it was necessary to expend resources where they weren’t currently needed. Especially considering the magnitude of the situation and how little time there was to adapt, these programs may have only appeared under-equipped because of the sheer number of people who were unemployed.