The culprit killing steel jobs
The steel industry, shedding workers, shutting plants and bleeding red ink, pleaded with the federal government for tariffs on imports. As the government obliged, a young reporter on the steel beat for the Wall Street Journal cautioned that tariffs could “ultimately do the industry more harm than good” because the real threat to big steel wasn’t foreign competition but changing technology.
That was 1992. The administration that imposed the trade barriers was George H.W. Bush’s. And the young steel reporter was me.
Twenty-six years later, what’s old is new again. The industry’s fortunes have waxed and waned with the economy and the price of steel. Trade protections came and went. But steel jobs continue to vanish. That’s because the job loss has almost nothing to do with imports.
President Trump, playing the charlatan, is telling steelworkers he’ll protect their jobs with his 25 percent tariff, made official Thursday, on all imports but those from Canada and Mexico. “We’re going to have a lot of great jobs … coming back into our country,” Trump promised.
He’s also dooming the dreams of another generation of steelworkers.
The United States has been a net importer of steel for six decades. It imported more than 20 percent of steel through much of the 1980s, and imports of finished steel today remain in that ballpark, about 25 percent of the market. Imports in 2017, $29.1 billion, were nearly identical to 2011’s $30.5 billion..
What has changed is that Americans consume far less steel — little more than half as much per capita compared with in the 1970s — as improved technology means automobiles and other applications require less of it. At the same time, improved steelmaking productivity means the industry requires dramatically less labor. Steel production is down by a third since the 1970s, but employment is down by about three-quarters.
These changes were well underway when I arrived in Pittsburgh in 1990 for my first job after college. At other newspapers, cub reporters might be assigned the cops beat; at the Journal, the joke went, they put you on the copper beat. I was assigned nonferrous metals and worked my way up to steel by way of machine tools and rubber.
There was still enough steel production in the area back then that when I left the windows open in my apartment, a film of black soot coated the sill. I toured the hulking industrial remains of the Monongahela Valley, and I still have over my desk a framed panorama, circa 1910, of mighty Homestead Steel Works, its furnaces blackening the sky. I visited steelworkers’ bars and wrote about the plight of a lost generation of industrial workers.
I also wrote about what was displacing them: “Minimills,” with their electric-arc furnaces that melted scrap steel, used only a third as many workers to produce a ton of steel as the old “integrated” producers, with their iron ore and coke blast furnaces.
“Big steelmakers everywhere are finding that the economies of scale that helped them prevail since Andrew Carnegie’s day no longer favor them,” I wrote in February 1993, noting that some expected Nucor, the leading minimill, to replace U.S. Steel as the nation’s largest producer by the year 2000.
Nucor did become the largest U.S. steelmaker, and the entire industry has become less laborintensive. The Associated Press reported that U.S. steel producers require only 1.5 person-hours to make a ton of steel, down from more than 10 in the 1980s. Electric furnaces make about 70 percent of this country’s steel, up from less than 30 percent when I covered the industry.
As a result, the radical shrinking of the steel labor force has continued despite the various attempts to restrict imports: voluntary agreements in the 1980s, duties in the 1990s, more tariffs in 2002. None was effective, because imports weren’t the problem.
The better answer, all along, has been for government to help steelworkers (and coal miners and other industrial workers who face a similar situation) to retrain and otherwise adapt to the inevitable.
Instead, 26 years after I first walked among the ruins of the Mon Valley, Trump continues to lie to steelworkers by telling them their jobs are coming back.