Rise and Shine, Akron! Can Economic Inclusion Help the Rubber Capital Bounce Back?

Bianca Neumann

University of Münster

Bianca Derya Neumann is an undergraduate student of politics and economics. In her career she has specialized in Raw Materials and Energy Politics by working as a consultant for organizations like the European Federation of Geologists (EFG), Sachtleben Bergbau GmbH and interning at the United Nations Economic Commission for Europe (UNECE). During her studies she engaged in several youth organizations by coordinating the delegation of Münster at the 2019 National Model United Nations New York (NMUN) and by being an active member of student network “sneep”, which deals with ethical questions in economy. Since 2012 she has volunteered as an integration assistant for refugee families in the city of Lennestadt. Due to her Turkish roots and international experience in several exchanges she is fluent in German, Turkish, English, and Spanish. By taking part in the project she hopes to become a part of a team of people with different backgrounds and interesting ideas to be able to contribute to the goal of Social Cohesion especially in Akron and Chemnitz.

Katharina Kiefel

Amerika Haus North Rhine-Westphalia

Ever since her time in Atlanta, GA (2009-2011), Katharina Kiefel has been dedicated to fostering and promoting transatlantic relations both personally and professionally. Her first such endeavor was through her Master’s degree in North American Studies, with focuses in International Relations and Economics, from the Friedrich-Wilhelm University of Bonn. Ms. Kiefel then became Program Manager of Amerika Haus North Rhine-Westphalia in Cologne, which was formerly part of the U.S. Mission to Germany’s Public Affairs section. Today, Amerika Haus North Rhine-Westphalia is an independent, not-for-profit organization with 50+ transatlantic events and projects annually, exploring the intersection of politics, culture, business, and education.
Ms. Kiefel is part of the Aspen Institute Next Generation Network on Artificial Intelligence (AI) and she is Co-Founder of the Transatlantic Female Forum. Before her professional engagement, she volunteered extensively in a transatlantic context, e. g., working with an organization of students and Prof. Dr. Sielke, Chair of North American Studies, a transatlantic conference.

Matthias Diermeier

German Economic Institute

Matthias Diermeier is the personal scientific assistant to the director of the German Economic Institute (IW), Prof. Dr. Michael Hüther. His research focus is in political economy and voting behaviour. The goal of his research is to provide solutions to bridge gaps within societies and to answer the rising threat to liberal democracy from the populist right. Mr. Diermeier is a PhD Student at the University of Duisburg-Essen in Political Science. He holds a Master’s degree in economics from the University of Zurich, with specialization in Political Economics, and a Bachelor's degree in Economics from the University of St. Gallen. He has also studied at the Sciences Po Paris and Universidad de San Andrés, Buenos Aires. Mr. Diermeier is fluent in four European languages.

Terron Ferguson

YANCY, Inc.

Terron Ferguson is an entrepreneur from Miami, Florida. He runs YANCY, Inc., a network-based firm that offers a variety of services and produces projects on important topics. His background consists primarily of public service roles, including but not limited to: special education teacher, political organizer, and human rights attorney. Mr. Ferguson moved to Leipzig, Germany as a German Chancellor Fellow with the Alexander von Humboldt Foundation, where he researches the Holocaust, World War II, denazification, and memory culture. He plans to open a multimedia exhibition to present his findings. This project will offer insights on how a country heals and moves past a difficult era in its history.

Akron, Ohio, went from being the “Rubber Capital of the World” to one of the “losers of globalization.” This journey is as paradigmatic of the industrial heartland of the Midwest as our group’s meeting with Akron’s Mayor Daniel Horrigan was symbolic of a moral imperative facing the country. On the eve of his November reelection, flanked by members of his team, Horrigan outlined a strategy to attract high-skilled workers, capital, investment, and corporate interest to the city. Their plan is to utilize economic growth to create a more inclusive Akron society. A return to prosperity might help, but social cohesion is not an inevitable outcome. Development must include all stakeholders, accompanying a firm understanding of the city’s complicated history with race and other important questions of identity.

Ever since the construction of the Ohio and Erie Canal, which connected Lake Erie and the Ohio River, Akron has benefitted from its location and accessibility. At the end of the nineteenth century, the clay, sewer pipe, and match industries provided production facilities that helped the city become a trading hub. In 1825, when the city was founded, the institution of slavery was being hotly debated as a national issue. Although Ohioans did not support slavery, they were sharply divided in their acceptance of freemen in the state. Since it had a strong abolitionist presence, Akron treated Black people residing in the city more humanely despite excluding them from the spoils of a burgeoning economy.

The Rubber Boom: Akron’s Growth Period

At the beginning of the twentieth century, the rubber industry conquered the city of Akron. Good infrastructure, an excellent rail and sewer network, the supply of fresh water, and inexpensive coal were regarded as essential locational advantages. The city also offered cheap labor, space, and several abandoned factories, attracting growing enterprises during the rise of the automotive industry. Tire firms like Goodrich, Goodyear, and Firestone grew into dominant companies by the end of 1912 after basing themselves in Akron. In the ten-year span from 1910 to 1920, the booming manufacturing sector hired scores of production workers and the population soared from 69,067 to 208,435. During that time, Akron’s Black population rose from 525 to 5,580, as African Americans were actively recruited from the racially-terrorized South by the prospects of greater economic opportunity and dignified lives.

Notwithstanding a forward-thinking private industry that was willing to band together to solve existential crises, Akron—like the rest of the nation—remained racially segregated along economic, political, and social lines. In fact, the Great Depression of the 1930s impacted Black people more than any other group in the city, as statistics released by the Federal Relief Administration indicate that African Americans constituted 20 percent of the total population on relief while comprising only 4 percent of the city’s population. Blacks were the first to be laid off and the last to be hired.

Early in the 1950s, patterns of overt discrimination were evident in housing, employment, medical services, and public accommodations. Although the Black population had nearly doubled from 1940 to 1950 (26,510 in 1950), leading to an increase of 13 percent of the population in the 1960s, available rental properties were minimal. Prohibitive factors of stiff credit restrictions, limited listings, and redlining posed barriers that prevented Black people from buying in particular areas of the city. There were no opportunities for Black people in utility companies, trucking firms, or mass transportation. In the vaunted rubber industries, Black people had not yet attained white collar Jobs, but they were beginning to be elevated to a few positions outside of typical janitorial and menial roles.

High Noon in Rubber City: Globalization’s Backlash

From the 1970s onward, globalization finally took over most of Akron’s large tire industry. Economic success came to an end when French, German, and Japanese tire manufacturers gained a competitive advantage through their own technical and process innovations. Between 1980 and the start of the global financial and economic crisis in 2007, the economic performance (gross metropolitan product) crashed by 70 percent from $2.2 billion to $600 million, including the respective layoffs of industry workers, according to a study published by the Brookings Institution. With local, regional, and federal authorities unable or unwilling to slow down this structural change, deindustrialization quickly led to massive depopulation. “White flight,” migration of the predominantly white higher social strata in times of economic hardship, is a common trend for urban areas undergoing economic transformation. Akron is not unique for experiencing this phenomenon, but the city was left behind by one-third of its former population. As most of the white population moved to wealthier parts of the country, the proportion of Black people rose to almost 30 percent. As a result, from 2005 to 2015, Akron ranked among the ten worst metro areas in the nation in Black unemployment rates and among the five worst metro areas for a decline in Black earnings.

Deindustrialization not only led to depopulation and a huge loss of jobs in the city of Akron, but it also exacerbated violence, death rates, and drug abuse. According to the Summit County Public Health report, the numbers of deaths caused by homicides, suicides, and overdoses are increasing. Homicides by firearm have steadily risen since 2003 and there are glaring differences in the rates between white and Black communities. Between 2013 and 2017, the age-adjusted firearm-related homicide rate was 1.4 deaths per 100,000 for white people, and 22.2 per 100,000 for Black people; the latter rate is more than 15 times higher than the former. Deaths due to overdoses and poisoning by narcotics began rising sharply starting in 2002. Summit County Public Health also compares the years between 2002 and 2012, and 2012 and 2016, where the overall drug abuse rose by 71 percent in the former and by an additional 230 percent in the latter period.

Over the past years, Akron has struggled with the revival of vacant residential and office buildings both in downtown and suburban areas, with government debt rising steadily to around $3,000 per capita. Additionally, the city suffers from a long period of insufficient public infrastructure investments. Until 2028, the city is forced to renew its 100-year-old sewage infrastructure for environmental reasons by a federal bill. The current price tag is around for $1.2 billion and will put a strain on the municipal budget for decades, if not generations. The economic distress leaves the municipal government with little room to maneuver to address the city’s social issues.

Designing Structural Change: What Can Be Learned from Akron?

Labor markets are a defining source of self-respect and social identity, as work is a key aspect of many people’s lives. In addition to enabling a thriving economy, work has the potential to connect people, create bonds, and bring purpose and structure to their lives. A malfunctioning labor economy can aggravate tensions within society and foster political instability, as the jobless are more likely to feel excluded. High levels of youth unemployment can lead to reduced life chances, greater likelihood of mental health issues, and violent and criminal activity.

All of these risks are exacerbated in contexts that have longstanding, complicated histories with race and other examples of evolving population plurality. Politics needs to design inclusive institutions that particularly improve the labor market situation for the “leftbehinds,” the group of workers from formerly booming industries that disappeared throughout the period of globalization. A cohesive economic policy addresses both high-tech future industries for the high-skilled but also keeps in mind that not everyone is capable to participate in these jobs and sectors.

A political approach oriented around economic growth assumes that establishing a welcoming environment will entice new people, money, and ideas to migrate to the city without triggering a backlash from the autochthonous population. Migration has a number of effects on the fabric of society. People—even in the form of executives and employees of companies—bring with them their cultures, values, traditions, lifestyles, and consumer behaviors. Social cohesion is present when individuals and groups with different cultures, values, beliefs, lifestyles, and socio-economic resources have equal access to all domains of societal life and live together without conflict. After all, conflicting identities need to be intermediated in public spaces that allow exchange and interaction between the society’s different groups.

In the course of economic globalization, Akron for example, which was already fraught with problems of cohesion, lost its source of identity, anchors for its cultural norms, and many of the institutional arrangements that orient its residents. Now it enjoys greater plurality, growing from a primarily white and Black city to one with 4.3 percent of its population self-reporting as mixed race and 3.97 percent of Asian heritage. If well managed, economic growth can create a triple-win: for individuals, cities, and regions. However, repeating the same exclusionary growth process of the twentieth century will only enable parallel societies to persist while facilitating temporal success before yet another eventual decline.

The views expressed are those of the author(s) alone. They do not necessarily reflect the views of the American Institute for Contemporary German Studies.